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zinn21
3rd Year Sire
Joined: 31 Jan 2005
Posts: 3306
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 Posted: Tue Oct 04, 2011 3:36 pm Post subject: Classic Star Judgement |
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All I can say is what an unbelievable story. This one is right up there with the Lundy/Calumet fraudulent debacle. From the article:
>>District Judge Joseph M. Hood ruled that former ClassicStar operators had set up the mare leasing program with the intent to funnel money into gas exploration operations and then swap out stock into Gastar Exploration, a publicly held spinoff company.<<
and: >>Although ClassicStar sold more than $600 million in leases to high income individuals, it never owned more than $56 million in horses in any given year, the records state. In order to cover up the difference, ClassicStar substituted Quarter Horse breedings in its statements to investors, although it did not own those mares either.<<
Read more: http://www.bloodhorse.com/horse-racing/articles/65345/65-million-awarded-to-classicstar-investors#ixzz1ZqaDe7BG
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madelyn
Moderator
Joined: 17 Sep 2004
Posts: 8977
Location: Louisville, KY
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| Posted: Tue Oct 04, 2011 8:58 pm Post subject: |
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The tale gives the term "horse trader" truly a new meaning.. these folks were scoundrels. But I think it is a a hollow victory. It is not likely that $65 million remains laying around somewhere to pay the judgement.
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Crystal
Freshman Sire
Joined: 16 Sep 2004
Posts: 2799
Location: Lexington, KY
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| Posted: Wed Oct 05, 2011 8:57 am Post subject: |
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| They filed chapter 11.. how do they expect to get 65 mill from these people? |
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zinn21
3rd Year Sire
Joined: 31 Jan 2005
Posts: 3306
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| Posted: Wed Oct 05, 2011 9:41 am Post subject: |
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Perhaps I am naive but how do folks buy into a swindle like this? It appears the WinStar group consisted of newbies who bought high profile mares and went on from there. Also, is the punishment for this crime so minimal make such a crime worthwhile? I cannot imagine setting up a scam and screwing folks out of millions...
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"Politicians should be limited to two terms, one in office and another in jail." Anonymous |
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madelyn
Moderator
Joined: 17 Sep 2004
Posts: 8977
Location: Louisville, KY
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| Posted: Wed Oct 05, 2011 11:32 am Post subject: |
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| zinn21 wrote: | | Perhaps I am naive but how do folks buy into a swindle like this? It appears the WinStar group consisted of newbies who bought high profile mares and went on from there. Also, is the punishment for this crime so minimal make such a crime worthwhile? I cannot imagine setting up a scam and screwing folks out of millions... |
Been done kazillion times - think "Madoff" as in made off with your money. This was insidious because this ClassicStar (NOT Winstar, totally different) group paid commissions to attorneys and investment advisers who "recommended" this "investment" to the totally naive nouveau-riche - folks like big time athletes. There was a pro football or baseball player in one of the groups as I recall who got "taken" for a couple mil..
It is always possible that this was a "possible" legitimate scheme at the very beginning and someone somewhere in this bunch had a valid plan to actually pay off the way it was promised and then just bad business and poor planning ate up the money along the way. Perhaps the swindlers were swindled at the broodmare sales. Think of the "blind leading the blind"...
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