The Brooks Brothers Find Trouble-- And Harness Racing Holds Its Breath

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The rubble of body-armor manufacturer David H. Brooks' once formidable empire continues to claim its victims. First it was investors in his body-armor company, DHB Industries, whom he and a co-defendant allegedly defrauded out of approximately $190 million. Now it's an entire industry, the sport of harness racing in North America, which has been left dazed and reeling over the possibility that its biggest and most controversial owners may soon be out of the business.

Brooks and his brother, Jeffrey, evidently own or otherwise control at least 800 Standardbred race horses all over North America (some put the figure closer to 950). Whatever the precise number, it represents an inordinately large percentage of the Continent's entire racing population--perhaps the largest ever owned by a single ownership group at one time. Over the years, racing under stable names like Perfect World Enterprises and Bulletproof Enterprises, Brooks horses have often been at the top of the sport. This past year, for example, Team Brooks won more than $12.5 million--nearly three times more than their closest competitor. The Brooks Brothers (and family) also own some of the best broodmares in the business and several fashionable sires.

They are also, I am told by dozens of industry movers and shakers who asked not to be identified for this piece, among the most odd, unyielding and incomprehensible people ever to participate in a sport that's been around for more than 100 years. So having endured their success for decades, many horsemen and horsewomen--owners, breeders, trainers, drivers, trackmen alike--now are left wondering whether the Brooks family's demise in racing is nigh. If it is, if all those horses have to be sold on the open market, the end of the Brooks dynasty would have enormous ramifications for a sport already struggling to find its place in the 21st century world of gaming and entertainment.

Here's how it's gone down. The seriousness of the charges against David Brooks--counts that could land him 25 years in prison if convicted--ultimately begat a deal brokered between federal prosecutors and defense attorneys which allowed Brooks to remain free on bail pending his trial. As part of David Brooks' bail conditions, Jeffrey Brooks, and perhaps other family members as well, were required to disclose and pledge some of their assets to honor David's commitment. At some point in this timeline (it's still unclear but evidently under investigation) David Brooks allegedly transferred some or all of his ownership interests in the horses to his brother.

Jeffrey Brooks in turn, more recently, has attempted to transfer some of those racing interests to other family members. Just before the David Brooks trial began on Long Island last month, however, prosecutors proved that David Brooks was improperly hiding and/or transferring assets. Scotland Yard, according to prosecutors, saw a Brooks family member allegedly taking millions in cash out of a bank in London in a duffel bag. U.S. District Judge Joanna Seybert quickly revoked David Brooks' bail and sent him to prison during the pendency of his trial. The news about the revocation of the bail, and whatever role, if any, Jeffrey Brooks may have played in it, generated a new round of action on both sides of the Canadian border.

First, the Ontario Racing Commission, from Canada's dominant harness racing jurisdiction, announced that Jeffrey Brooks, and the horse-business he and/or his family operate(d) as Perfect World Enterprise and Bulletproof Enterprises, have had their racing licenses suspended. "All racetracks," the stark decision reads, "are ordered to hold, freeze and maintain all funds, purse accounts or monies related to" the Brooks Brothers' enterprise pending completion of the ORC's investigation. No Brooks Brothers horses have raced since in the province. They've all been scratched.

Just a few hours after the Canadians spoke, the United States Trotting Association chimed in. A staid, conservative group that has overseen the harness industry for about a century, the USTA took a relatively bold step (for it, anyway) Thursday afternoon of declaring it would not accept any transfers in ownership interests in horses from Jeffrey Brooks or anyone in his family pending an ongoing investigation into Bulletproof. Put the emphasis on "ongoing," one source told me last week.

And, indeed, this past Tuesday, the USTA, citing the Ontario action, suspended its membership privileges for all of the Brooks' entities. Now regulators in Pennsylvania, Kentucky and Illinois, among others, are mulling whether to honor those suspensions. New Jersey, which hosts the most important track in America at the Meadowlands in East Rutherford, already has suspended Brooks Brothers' horses from racing there. At Ohio's only harness track now in operation Brooks' horses were scratched Saturday. New York quickly followed. On Wednesday, so did Delaware.  

At some point, if the horses cannot race because the Brooks Brothers cannot be licensed, and if the federal government, Canadian authorities, or private creditors of Team Brooks seek to tap into the value of all that horseflesh, harness racing may see its biggest dispersal sale ever. Many folks in harness racing told me privately that they wouldn't shed a tear if the Brooks Brothers were forced out of their sport. But getting from here to there, they worry, won't be a smooth ride.

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Andrew Cohen is a contributing editor at The Atlantic. He is a legal analyst for 60 Minutes and CBS Radio News, and a fellow at the Brennan Center for Justice.

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