American Pharoah owner Ahmed Zayat sued over gambling debt

Ahmed Zayatis being sued as his horse is trying for a Triple Crown.Elsa/Getty Images

Ahmed Zayatis being sued as his horse is trying for a Triple Crown.

As he celebrates the pomp and circumstance surrounding the possibility of the first Triple Crown in 37 years, the owner of American Pharaoh is also dealing with a less appealing public spectacle.

Ahmed Zayat, the owner of the colt who has won six of his seven races and will become the first winner of the Triple Crown since 1978 if he wins the Belmont Stakes on June 6, is fighting a sordid battle against a gambler with a felony record who has filed a lawsuit in U.S. District Court in New Jersey accusing Zayat of failing to pay a $ 2 million debt he ran up betting through a website in Costa Rica.

Zayat seeks to have the suit dismissed in coming weeks, telling the Associated Press Wednesday night, “It’s a fraud. It’s a scam from A to Z. It’s total fiction. It’s a total lie.”

Zayat called the suit for breach of contact “blackmail,” according to the his motion to dismiss, and said it should be thrown out because, among other reasons, it was filed beyond the six-year statute of limitations and because the plaintiff can’t produce an actual contract between him and Zayat.

His lawyer, Joseph Vann, said in a statement Wednesday night that the dispute that has dragged on for over a decade.

“We have moved to dismiss this meritless claim relating to allegations from 11 years ago,” Vann said.

Rubinsky filed the suit against Zayat in federal court in Newark in March 2014, claiming he advanced the Egyptian-born businessman a line of credit at a sports betting casino in Costa Rica called Tradewinds.

Howard Rubinsky says that after Zayat lost $ 2 million betting on sports, Zayat paid back $ 350,000, sticking Rubinsky with the tab for the rest after agreeing to repay the alleged debt, according to court documents.

Zayat, however, refutes the claims, saying in a March 2015 statement to the court that he never asked Rubinsky to put up a line of credit for him, never agreed to place any bets through Rubinsky, didn’t place bets with Tradewinds, and doesn’t owe him any money.

“I never asked Rubinsky to put up a line of credit for me anywhere, and I was never aware – and I am still not aware – that he ever did so,” Zayat wrote. He goes on to say in the court papers that he “did not have a debt to Tradewinds, I never paid any money to Tradewinds.”

In his suit, Rubinsky claims Zayat last made a payment toward the debt in 2008, an amount of $ 25,000 the court documents state, and that “beginning in or about 2008 Defendant and his principal business Zayat Stables began to experience financial difficulties.” The court papers go on to state that Zayat filed for Chapter 11 bankruptcy protection in 2010 (one of his creditors was the trainer of American Pharaoh, Hall of Famer Bob Baffert.) Zayat has also been involved in other legal entanglements over the years, including allegations of unpaid gambling debts and a loan default.

The suit is the latest salvo in a feud between Zayat and Rubinsky, who pleaded guilty in 2008 for his role in an illegal bookmaking operation with brothers Michael and Jeffrey Jelinksy. Rubinsky claims to have opened a $ 3 million line of credit for Zayat at Tradewinds Sportsbook after being introduced to him by the Jelinsky brothers, who Zayat describes as friends of his. After Zayat refused to pay, court papers say, Rubinsky claims to have lost $ 1.65 million plus interest.

According to the lawsuit, after Zayat Stables began having financial troubles in 2008 and filed for bankruptcy in 2010, Zayat couldn’t pay what he owned to the casinos, but agreed to pay Rubinsky his gambling debt. Zayat was investigated for his ties to the Jelinsky brothers.

According to Zayat, however, he simply tried to help Rubinsky out of his financial problems and owes him no money. He says in his statement to the court that the Jelinskys introduced Zayat to Rubinsky during a breakfast meeting sometime between 2001 and 2003.

In 2007 or early 2008, Zayat said in his statement to the court, he met with Rubinsky, who said he was sick and had no money and that he had been cheated by the Jelinskys. He agreed to give Rubinsky $ 25,000 and then another $ 25,000 from the Zayat Foundation made payable to Rubinsky’s sister, Donna Rubinsky.

“I do not deny that I gave him that first check — I know that I was willing to help him and I may have given him two checks — but I can say unequivocally that I did not give Mr. Rubinsky any money as payment on any debt. I did not, and do not, owe Mr. Rubinsky any money. I agreed to give him money because he told me he was ill and broke,” Zayat’s statement says.

American Pharaoh has captured the nation’s attention after winning the Kentucky Derby and then capturing the Preakness in the driving rain. The Belmont will be the final test to see if he can become the first horse since Affirmed won all three legs in 1978.

Zayat said Tuesday that he had sold the colt’s breeding rights., and earlier Wednesday he and his son, Justin, tweeted that American Pharaoh would stand at Ashford Stud in Versailles, Ky., which is owned by Ireland based Coolmore Stud. American Pharaoh is a son of Pioneer of the Nile.

Later on Wednesday, Zayat issued a statement through his publicist: “We are very grateful for the extraordinary enthusiasm and support we’ve received from fans everywhere about American Pharaoh and this is a time to focus on celebrating the great interest in the sport instead of rehashing issues that were resolved several years ago,” Zayat said. 

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