Audrey Strauss, the United States Attorney for the Southern District of New York, announced that defendants JORGE NAVARRO and KRISTIAN RHEIN have pled guilty to their respective roles in the distribution of adulterated and misbranded drugs with the intent to defraud and mislead, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV). NAVARRO pled guilty today and RHEIN pled guilty on August 3, 2021, both before U.S. District Judge Mary Kay Vyskocil. RHEIN will be sentenced by Judge Vyskocil on December 2, 2021, and NAVARRO will be sentenced by Judge Vyskocil on December 17, 2021.
Manhattan U.S. Attorney Audrey Strauss said: “Kristian Rhein and Jorge Navarro represent the supply side and the customer side of the market in performance enhancing substances that have corrupted much of the horse racing industry. As he admitted today, Navarro, a licensed trainer and the purported ‘winner’ of major races across the world, was in fact a reckless fraudster whose veneer of success relied on the systematic abuse of the animals under his control. Rhein previously admitted that he flouted his oath as a veterinarian to protect the animals under his care, choosing instead to pursue money through the sale and administration of unregulated substances used by trainers engaged in fraud and animal abuse. These latest convictions demonstrate the continued commitment of this Office and our partners at the FBI to the investigation and prosecution of corruption, fraud, and endangerment at every level of the horse racing industry.”
According to the allegations contained in the Superseding Indictment, the Superseding Information charging RHEIN, prior charging instruments, and other filings in this case, and statements during court proceedings:
The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses. Trainers, like NAVARRO, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings, and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Veterinarians, including RHEIN, who was the head veterinarian and owner of Empire Veterinary Group, profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances.
NAVARRO operated his doping scheme covertly, importing misbranded “clenbuterol” that he both used and distributed to others, avoiding explicit discussion of PEDs during telephone calls, and working with others to coordinate the administration of PEDs at times that racing officials would not detect such cheating. Among the horses that NAVARRO trained and doped was XY Jet, a thoroughbred horse that won the 2019 Golden Shaheen race in Dubai. Among NAVARRO’s preferred PEDs were various “blood building” drugs, which, when administered before intense physical exertion, can lead to cardiac issues or death.
Among the misbranded and adulterated PEDs promoted, sold, and administered by RHEIN were an illegally distributed prescription drug, Clenbuterol, used as a bronchodilator and the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities and contained growth factors that the defendants knew to be undetectable through regular drug screens. SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors” supposedly derived from sheep placenta.
The horse “Maximum Security,” briefly considered the winner of the 2019 Kentucky Derby (though later disqualified), was among the horses that RHEIN assisted in doping. On June 5, 2019, New Jersey racing regulators tested Maximum Security for performance enhancing drugs a short time after Maximum Security had received a shot of SGF-1000. The testing occurred in advance of a race scheduled for June 16, 2019, in which Maximum Security competed and placed second. On an intercepted call following that test, RHEIN asserted that Maximum Security would not test positive for the presence of the drug: “[t]hey don’t even have a test for it [SGF-1000] . . . There’s no test for it in America.”
Through their pleas, NAVARRO has agreed to the payment of restitution in the amount of $25,860,514, reflecting winnings obtained through his fraudulent doping scheme, and RHEIN has agreed to pay restitution in the amount of $729,716 in connection with fraud committed through a false billing practice related to RHEIN’s drug misbranding scheme. RHEIN, and others working under RHEIN’s direction, created false billing records to be provided to horse owners that did not reflect the drugs that RHEIN and others had actually injected into racehorses under their “care.” Through this false billing scheme, RHEIN attempted to conceal from potential investigators and horse owners the true nature and means of administration of the PEDs that he and others provided and administered.
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Ms. Strauss praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Sarah Mortazavi, Andrew C. Adams, Benet Kearney, and Anden Chow are in charge of the prosecution.
 As to Navarro and Rhein’s codefendants, the entirety of the texts of the Indictments and the descriptions of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.
James Margolin, Nicholas Biase