The Smell of Victory

IMG_1039Not to condone the breaking of the ninth commandment, but one of the things that can make journalism fun to read is that the people who participate in its creation are not under oath. It’s no surprise that a reporter’s subject may misspeak for any number of reasons: guilt, ego, money, or, in the notable case of Richard Nixon, because his lips moved. Outright lies are scattered throughout every one of these “he said, she said” newspaper stories, hiding in plain sight, often within quotation marks, like the telltale clues in a well-plotted murder mystery. The fun resides in spotting them out.

Sometimes you need a couple of different angles. Especially when the story unfolds over fifteen years and has a cast of characters that includes Ahmed Zayat, the owner of Triple Crown contender (and scourge of spellcheck) American Pharoah; a convicted felon named Howard Rubinsky; two wayward brothers from New Jersey; offshore bookmakers; and agents from the FBI and the Department of Homeland Security.

Zayat declined comment and lawyered up when Joe Drape of the Times was breaking this story last week. Zayat is the defendant in a breach of contract suit brought by Rubinsky, a former recruiter for offshore bookmakers. Rubinsky claims to have fronted for Zayat, advancing him two million dollars in credit that Zayat subsequently lost to the bookmaker, leaving Rubinsky to suffer the actual loss. Zayat was deposed in the case last November and has denied owing Rubinsky anything. At least one of them is lying.

One of the rare facts on which both Zayat and Rubinsky agree is that they were introduced by two brothers, Michael and Jeffrey Jelinsky, sometime in the early 2000s. The brothers arranged for Rubinsky to be a surprise guest at a breakfast meeting at Zayat’s home in Teaneck, New Jersey. Zayat testified that he thought of himself as a mentor to the two enterprising young lads (whom he had known since the early nineties when they were still in high school), and that the meeting was an investment pitch on which he took a pass. Rubinsky claims that this meeting was the genesis of an eventual contractual relationship regarding lines of credit with the offshore bookmakers whom Zayat subsequently stiffed.

Regardless of which side you believe, there is little doubt that fortune has favored Zayat since this foursome sat down to breakfast more than twelve years ago. His Zayat Stables has been one of the leading North American stables since 2007 with horses like Pioneerof The Nile and Nehro and Bodemeister (all Kentucky Derby bridesmaids) and now the Triple Crown aspirant with the misspelled name. Rubinsky has seen financial ruin and pleaded guilty for his role in the operation, leaving him a convicted felon. Michael and Jeffrey Jelinsky were convicted of illegal bookmaking in 2009 and sentenced to 15 and 21 months in prison, respectively, along with a combined forfeiture of nearly $5 million.

But while Ahmed Zayat has seemingly flourished, he is apparently the talk of the offshore betting set for having left bad markers in and around the Caribbean. Three days after Drape’s bombshell dropped on, Ken Kurson reported in the Observer (he is its editor) that two men presumed to have a working knowledge of the publicity-shy offshore betting industry contend that Zayat “still owes quite a few sports books quite a bit of money”  and has “a lot of debts”. While you may be skeptical about someone who loves being called “The Gambling Globetrotter” (and who, despite all that globetrotting, still finds the time to publish a website dedicated to cataloging Zayat’s less-favorable press), the fact that there are others who support Rubinsky’s assertions suggests there may well be some pale fire here and not just smoke.

It seems Kurson did a great job of getting under Zayat’s skin, because rather than say “no comment” and refer to counsel, the defendant opened up his yap and proceeded to protest just a bit too much. Maybe it was Kurson’s sources with inside information about the offshore books. Maybe it was the odd bit that Kurson related firsthand from his previous stint in politics, where Zayat apparently did not vet out sufficiently to be cleared for hosting a 2007 fundraiser for the presidential campaign of Rudy Giuliani. Whatever the reason, Zayat did himself no favors with this interview.

Kurson quotes Zayat as saying “He’s talking about me betting overseas in Costa Rica. I’ve never in my life been in Costa Rica.” Whom is Zayat trying to fool with such inanity? Even a piker of a punter such as your correspondent knows the advantage to having an offshore account is that it allows you to bet beyond the reach of the US government while keeping yourself safely onshore.

Zayat told Kurson “He’s talking 2003. I was in Egypt, as CEO of a beverages company. I was working 18 hours a day. It’s an insanity.” Back then Zayat was spending roughly three workweeks out of every month in Egypt. But he was also spending weekends and down time with his family at his home in Teaneck, which is where he acknowledges meeting with the Jelinskys, who were by then based in Las Vegas and becoming well acquainted with high-stakes offshore bookmakers.

Zayat’s testimony suggests that the Jelinsky brothers reconnected with him after reading a glowing article about his business triumphs in Egypt in the Christmas Day 1999 edition of the New York Times. [Zayat was born in Egypt and came to the US as a teenager. After college he worked in New York real estate and on Wall Street before making his fortune in 1997 by arranging the purchase of a monopoly beer and beverage company from the Egyptian government and then taking it public. The company was subsequently sold in 2002 to Heineken for $280 million – roughly four times greater than what Zayat’s group paid for it.]

In 2013 Zayat suffered the embarrassment of having an untruth detected in his official biography. Even after all of his success in business, and despite actual degrees from Yeshiva and Boston University, Zayat continued to list a nonexistent MBA from Harvard on his CV. It was only when the Record of New Jersey raised the fact that Harvard had no record of his ever having attended that Zayat had the bogus degree scrubbed from his stable’s website. But old habits are hard to quit. About 18 months after the Record revealed his ivy-covered untruth, Zayat found himself in an east side law office, under oath, being deposed by Rubinsky’s lawyer.

Q: Where did you attend (college)?

A: Yeshiva University, Harvard University and Boston University.

If Zayat cannot bring himself to be truthful about his classroom achievements while under oath, how can you believe anything he might say to a newspaper reporter about millions of dollars in illegal offshore betting?

In his sworn deposition, Zayat stated that he handed over hundreds of thousands of dollars to the Jelinskys and smaller amounts to Rubinsky, but he represents these as loans and acts of charity to beleaguered individuals, and not the partial settling of gambling debts with three soon-to-be convicted felons.

The $600,000 in purported loans to the Jelinsky brothers caused a stir when they became part of the public record after Zayat Stables went through bankruptcy proceedings in early 2010. This came roughly a year after the Jelinskys pleaded guilty to illegal bookmaking and would seem to put Zayat in the unenviable position (for a big-time thoroughbred owner) of having associated with known bookmakers. But Zayat seemed to have dodged this bullet back then, owing to his long personal history with the brothers, and his insistence that these were mitzvahs, and not payoffs on gambling debts. But one line in Joe Drape’s February 20, 2010 story about this episode clearly shows that Zayat is all too willing to dispense with the truth whenever it suits his purpose.

Zayat told Drape in 2010 that he had never been contacted by law enforcement authorities about the Jelinskys’ illegal activity (presumably because that would have indicated that he had been knowingly dealing with bookmakers). But in his deposition from last November, Zayat not only testified that he had been visited by agents from the FBI and the Department of Homeland Security in May of 2008, but that he had placed bets with Michael Jelinsky during the time period when Jelinsky confessed to having been illegally booking bets.

Should American Pharoah go on to win the Belmont Stakes and you happen to hear a mighty rumbling when Ahmed Zayat raises the Triple Crown trophy above his head, don’t worry: it’s probably just the sound of Jule Fink (the most unfairly maligned owner in racing history) turning over in his grave.

We close this inquiry into untruths and their seeming lack of consequences with this: The Observer reported that Zayat cited the timing of Rubinsky’s suit as a way of capitalizing on the sudden fame of American Pharoah and Zayat Stables. Rubinsky filed his suit in March of 2014; five months before the start of American Pharoah’s racing career. If Rubinsky had American Pharoah in mind when he brought this suit, it would represent the greatest futures bet in the history of throughbred racing.

5 thoughts on “The Smell of Victory

  1. Just an FYI. The brothers are not bookmakers. They were convicted of booking Zayat’s bets when they were supposed to be putting them through the windows in Las Vegas.

    • Hi Sheik;
      Thanks for reading and commenting. Yes, I agree. The brothers were not hanging out a shingle on a bookmaking business. But the fact that they were effectively making book by holding Zayat’s bad bets rather than pushing them through was good enough for the Feds. Where I’m referring to “the bookmakers” I’m meaning Tradewinds. Sorry if that was not clear. Complicated story and worried about getting too deep into the weeds.

  2. Bob- I read ai portion of the summary judgment filings in Federal Court in New Jersey- there is no middle ground- someone is engaging in perjury. Great piece. See you in The cafeteria.

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