2002 Breeders' Cup betting scandal

Harn was a computer programmer at Autotote, which handled the wagers for 65 percent of horse races in North America at the time. In the fall of 2001, Harn discovered unclaimed ticket data that if claimed, would total hundreds of thousands of dollars. Using this data, he reprinted the unclaimed tickets so that he and his friends could claim them at local tracks. However, cashing them was another matter. As an Autotote employee, he was restricted from making wagers himself. In any event, he was too well known at the tracks to cash them. To solve this problem, he talked DaSilva and Davis into cashing the tickets at various tracks. The three men had been friends and fraternity brothers at Tau Kappa Epsilon during their days at Drexel University. However, Harn soon realized that if they kept it up too long, they'd eventually be tracked down. He looked for a way to get one big payoff that could allow him to easily cover his tracks. He found it in the Breeders' Cup, the richest day in American horse racing. Harn decided to go for the Ultra Pick 6, in hopes of scoring a win by picking the winners of the six major races of the competition—the Classic, Turf, Sprint, Distaff, Juvenile and Mile. ==Finding a weak link==

At the time, all wagers placed at the numerous off-track betting parlors around the country that were still live after the second race of a Pick 4 and the fourth race of a Pick 6 were forwarded to Autotote headquarters in Newark, Delaware and to the track where the race was held. Harn discovered that there was a half-hour delay between the end of the second or fourth race and when the live wagers were forwarded—enough time to alter the results. He had DaSilva set up an account at the Catskill Off-Track Betting Corporation in Pomona, New York. Harn liked Catskill because its security was fairly lax. Unlike other OTB parlors, it didn't require the bettor to be physically present to open an account, and also didn't have a transaction history file. It was also a fairly low-traffic facility, making it easier to alter bets. He'd set up the system himself, so he knew how it could be exploited. ==The scheme==

Harn had DaSilva conduct two dry runs of their scheme. On October 3, DaSilva bet on the Pick 4 harness races at Balmoral Park, about 45 miles from Arlington Park. After the first two races, Harn logged in and altered the original bets on the first two races, then picked every horse in the last two races. As a result, DaSilva netted $80,000 in winnings. Two days later, Harn and DaSilva repeated the pattern in a Pick 6 at Belmont Park. This time, DaSilva scored $100,000. For the Breeders' Cup, Harn had Davis open an account at Catskill in case the authorities got suspicious of DaSilva. Davis then called Catskill from his home in Baltimore to buy a $12 Pick 6 ticket, picking one winner in the first four races. On Breeders' Cup Day, Harn slipped into his office at Autotote. To make sure he was covered, he remotely ejected the backup tape at Catskill before the first race. He then took several calls from Davis while the races were underway. After the fourth race, and half an hour before the Turf, Harn hacked onto the system and tracked down Davis' bet. He then changed Davis' original bet to reflect the actual four winners. After having the Catskill techs reinsert the tape, he bet on every horse running in the Turf and Classic, assuring that he would win. The plan worked, and they were able to turn their original $1,152 bet into almost $3.1 million in winnings--$2.57 million for winning the Pick 6, plus $498,000 in consolation prizes for picking five out of six winners. ==Suspicions mount==

Unfortunately for Harn and his friends, the Classic was won by Volponi, a 43-to-1 longshot. Had a horse won with shorter odds, or if more money had been bet on Volponi, there would have been more winners—and a smaller payout—and Davis' bet would have looked normal. As it turned out, Davis held the only jackpot winner. The nature of the bet raised suspicions as well. While most bettors pick more than one horse to increase their chances of winning, as mentioned above Davis selected only one horse for the first four races and effectively played the same ticket six times. It also seemed unusual that all the bets were placed through Catskill, a fairly small operation. The New York Racing Association asked the New York State Racing and Wagering Board to launch an investigation. As a first step, the board asked Arlington Park and Catskill not to pay out Davis' winnings. The New York State Police, FBI and the U.S. Attorney for the Southern District of New York later joined in the investigation. Harn and Davis were very nervous, but finally decided their only course was to claim the bet was legitimate. Davis went to the press, maintaining his innocence. He said the only reason that the payout was so large was that he'd intended to make a $2 bet rather than the $12 bet he'd actually made. Davis demanded proof of any wrongdoing. ==Caught==

The fact that the nature of the ticket changed so abruptly after the first four races (the same four winners picked for the first four races on every bet and then every possible combination of horses in the last two races) led investigators to wonder early on if someone had hacked into the system and changed the ticket. They soon discovered that DaSilva's bets at Balmoral and Belmont were similar in nature to the larger bet Davis made at the Breeders' Cup—raising suspicions that they were dry runs for the Breeders' Cup bet. The New York State Police also seized computers from Autotote and Harn's house, and also subpoenaed Harn's phone records. The next day, Davis pleaded guilty to conspiracy to commit wire fraud and gave up all claims to the money. On March 20, 2003; Harn was sentenced to a year and a day in federal prison. Davis received 37 months while DaSilva received two years. The $3.1 million payoff was split among 78 people who'd gotten five out of six races right; each got $39,000 in addition to their original $4,600 consolation prizes. ==Fallout==

Even though Autotote officials characterized the scheme as the actions of a "rogue software engineer", The scheme was profiled on the Canadian television series Masterminds. ==References==