The 2002 Breeders' Cup betting scandal is an incident that arose when computer programmer Chris Harn plotted with two friends, Derrick Davis and Glen DaSilva, to manipulate bets in the 2002 Breeders Cup, held at Arlington Park in Arlington Heights, Illinois. This enabled him to set up a $ 3 million USD payment to the trio. The scam was revealed when the 43-to-1 longshot won the Breeders' Classic Cup. This unpredictable victory makes Davis the sole winner of the Pick 6 jackpot. Finally, Harn, Davis, and DaSilva plead guilty.
The incident is the biggest betting scandal that occurred in the United States in a century. It also shows a serious security flaw in the system used to collect bets for horse races.
Video 2002 Breeders' Cup betting scandal
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Harn is a senior computer programmer at Autotote, who handled bets for 65 percent of North American racetracks at the time. In the fall of 2001, Harn uncovered unclaimed ticket data which, if claimed, would amount to hundreds of thousands of dollars. Using this data, he reprints unclaimed tickets so that he and his friends can claim them on a local track. However, cashing it is another matter. As an employee of Autotote, he is prohibited from making his own bets. After all, he's too famous on the tracks to cash it.
To solve this problem, he talked DaSilva and Davis to cash tickets on various lines. The three men were friends and fraternal brothers at Tau Kappa Epsilon during their days at Drexel University. DaSilva now lives in New York City while Davis lives in Baltimore. Davis and DaSilva traveled to several tracks in New Jersey, New York and Pennsylvania to cash the vouchers. The three men then split the victory.
However, Harn soon realized that if they kept it too long, they would eventually be traced. He's looking for ways to get great rewards that allow him to cover his tracks easily. He found it in the Cup Breeders, the richest day in American horse racing. Harn decided to choose Ultra Pick 6, hoping to score victories by selecting the winners from six major competition races - Classic, Turf, Sprint, Distaff, Juvenile and Mile.
Maps 2002 Breeders' Cup betting scandal
Finding weak links
At that time, all bets were placed in a number of overseas betting places alive after the second race of Pick 4 and the fourth Pick 6 race was forwarded to Autotote headquarters in Newark, Delaware and to track where the race was held. Harn finds that there is a half-hour delay between the end of the second or fourth race and when the direct bet is forwarded - just enough time to change the result. Harn is uniquely positioned to take advantage of this weak link. He is a "super user" - the highest access level in Autotote. In fact, he is responsible for maintaining the entire network.
He asked DaSilva to create an account at Catskill Off-Track Betting Corporation in Pomona, New York. Harn likes Catskill because the security is quite loose. Unlike other OTB homes, it does not require the bidder to be physically present to open an account, nor to have a transaction history file. It's also a fairly low traffic facility, making it easier to change bets. He has set his own system, so he knows how it can be exploited.
Scheme
Harn has DaSilva doing two dry paths from their scheme. On October 3rd, DaSilva bet on a Pick 4 harness race at Balmoral Park, about 45 miles from Arlington Park. After the first two races, Harn went in and changed the original bet on the first two races, then picked every horse in the last two races. As a result, DaSilva netted $ 80,000 in victory. Two days later, Harn and DaSilva repeated the pattern in Pick 6 at Belmont Park. This time, DaSilva scored $ 100,000. For the Breeders' Cup, Harn has Davis opening an account at Catskill if the authorities are suspicious of DaSilva. Davis then telephoned Catskill from his home in Baltimore to buy a $ 6 $ Pick ticket, picking one winner in the first four races.
On Breeders' Day, Harn sneaks into his office in Autotote. To make sure he was closed, he remotely issued a backup tape in Catskill before the first race. He then took several calls from Davis when the race was underway. After the fourth race, and half an hour before Turf, Harn infiltrated the system and tracked Davis's bet. He then changed Davis's original bet to reflect the four real winners. After the Catskill technician replaced the tape, he bet on every horse running on the Turf and Classic, making sure that he will win. The plan was successful, and they were able to change the original bet $ 1,152 to nearly $ 3.1 million in winnings - $ 2.57 million to win Pick 6, plus $ 498,000 in entertainment prizes to choose five out of six winners.
Suspicions increase
Unfortunately for Harn and his friends, Classic was won by Volponi, a 43-to-1 longshot. If a horse wins with a smaller chance, or if more money has been bet on Volponi, there will be more winners - and smaller payouts - and Davis bets will look normal. Apparently, Davis holds the only jackpot winner.
The nature of the bet raises suspicion as well. While most players choose more than one horse to increase their chances of winning, as mentioned above, Davis only selects one horse for the first four races and effectively plays the same ticket six times. It also seems unusual that all bets are placed through Catskill, a fairly small operation. The New York Racing Association requested the New York State Racing and Betting Board to launch an investigation. As a first step, the council asked Arlington Park and Catskill not to pay Davis a victory. The New York State Police, the FBI and the US Attorney for the Southern District of New York later joined the investigation.
Harn and Davis were very nervous, but finally decided their only way was to claim the bet was legitimate. Davis went to the press, defending his innocence. He says the only reason that his payout is so great is he intends to make a $ 2 bet rather than the $ 12 bet he actually earns. Davis demanded any evidence of error.
Caught
The fact that the nature of the tickets changed so suddenly after the first four races (the same four winners were selected for the first four races on each bet and then any possible horse combinations in the last two races) made investigators wonder early on if someone had hack the system and change the ticket. Naturally, the focus switches to the Autotote system. Autotote immediately suspected the work inside, and questioned all of his employees in Newark. They soon discover that Harn is not scheduled to work on the day of the race, but is still in the office. Even more seriously, they find Harn has tapped the system and changed Davis tickets after the first four races. When Harn could not explain his activities or what he did at work, Autotote fired him and submitted his own investigation results to New York State and federal officials.
Researchers soon discovered that Harn and Davis had become members of the Tau Kappa chapter Epsilon Drexel. Not long after that, they found DaSilva had become a member of the brotherhood at the same time as Harn and Davis, and also had an account in Catskill. They soon discovered that DaSilva bets in Balmoral and Belmont were similar to the larger bets Davis made at the Breeders 'Cup - which raised the suspicion that they had a dry match for the Breeders' Cup bet. The New York State Police also confiscated computers from Autotote and Harn's home, and also subpoena Harn's phone records. On November 12, Harn, Davis, and DaSilva were each charged with one count of wire fraud in White Plains, New York. James Comey, US Attorney for Southern New York, described the scheme as a 21st-century version of The Sting .
In the face of mounting evidence - including many calls from Davis mobile phones to Harn's Autotote phone and witnesses who saw Harn enter the Catskill site while on the phone - Harn chose to cooperate with the investigator. He not only admitted installing a Breeders' Cup bet and running tests he did with DaSilva, but also told investigators about his scheme to monetize unpaid tickets - something they did not know. The federal law requires that anyone cooperate with prosecutors to disclose all criminal activity in which they are involved.
On Nov. 20 - a week after the indictment - Harn pleaded guilty to conspiracy to wire and computer fraud and conspiracy to laundering money. He claimed to have roped Breeders' Cup, Balmoral and Belmont. He also claimed winning a legitimate winner of $ 92,500 with his duplicate ticket scheme. On December 11, DaSilva pleaded guilty to similar accusations, but claimed he did not know Davis was included in the scheme and that he did not take part in the Breeders' Cup bet. The next day, Davis pleads guilty to conspiracy to commit wire fraud and hands over all claims on the money.
On March 20, 2003; Harn was sentenced to one year and one day in federal prison. Davis received 37 months while DaSilva received two years. $ 3.1 million prize is divided among 78 people who earn five out of six races correctly; each earning $ 39,000 in addition to their original $ 4,600 entertainment prize.
Fallout
Although Autotote officials marked the scheme as the act of a "rogue software designer", the National Balanced Racing Association took swift action in the face of growing anger once the nature of the deception arose. This requires that all companies tote to modify their software to allow bets to be forwarded as soon as they are closed. It also suppresses its members' path of not doing business with the homes that do not have the ability to record bets taken over the phone.
The scheme was profiled on the Canadian television series Masterminds.
References
Source of the article : Wikipedia
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