Held at Arlington Park in suburban Chicago, this year's Breeders' Cup was a thriller - capped by Volponi winning the prestigious Classic despite having never won a top-graded race. The payoff, $89 on a $2 bet, was the Classic's second biggest.

On Davis' winning wager, placed about 15 minutes before the first Pick Six race, he bet each horse in the Classic, as well as in the race before that one. That strategy is not uncommon in multi-race wagering. But in the four preceding races, he picked only winners: Domedriver, a 26-1 long shot in the mile; Orientate, the 5-2 favorite in the sprint; Starine, a 13-1 long shot in the turf race; and Vindication, the 4-1 favorite in a race for younger horses.

A few days later, Davis, in an interview with The New York Post, explained his selections like a veteran handicapper. He liked Domedriver, for example, because the horse was bred in Ireland and, he thought, would do well on the wet turf that day.

His six tickets on the races cost him $1,152 - he says he meant to bet less but hit the wrong key on the phone - and were the only Pick Six winners in the country. The payout was $428,392 per ticket, for a total of $3,067,821.

In his other bets that day, he picked every horse in the first two races and one horse in each of the final four. He lost $364.

Big winnings require a wire transfer, which delayed payment a few days. In the meantime, William A. Nader, senior vice president of the New York Racing Association, which regulates Catskill, said he looked at the bet and thought its single-single-single-single-all-all composition was fishy.

A hold was put on the payoff, and the New York Racing and Wagering Board began to investigate. It contacted Catskill, where Groth identified two other wagers that followed the same pattern: DaSilva's.

DaSilva was up by more than $100,000 in an account that had been used only a few times. He already had cashed in most of his winnings, a net of $80,000 after taxes.

In office on day off

Autotote, too, was contacted. Officials there examined computer logs and quickly found that an employee in Newark had accessed Catskill's hub in Poughkeepsie, N.Y., via modem and could have tampered with bets. The company fired Harn on Oct. 31.

Investigators spoke with co-workers and discovered that Harn had come to the office Oct. 26, even though he was not scheduled to work. A check of cell phone records revealed conversations between Harn and Davis during the races. Harn's phone also was used to access the Poughkeepsie computer, according to police.

Investigators concluded that Harn may have taken advantage of security gaps in the tote system. For example, not all the data on wagers is transmitted before a race begins to ease congestion in tote systems.

For multiple-race bets, such as the Pick Six, information on who bet on what horse is retained in the computers where the bet is placed - Catskill in this case - until just after the fifth race. Then, information on only the few who still stand a chance to win is forwarded to the track where the race is run.

That would have given Harn time to correct bets on the first four races, something he would have been able to do because he helped set up the system and had the passwords. It also would explain the single-single-single-single-all-all pattern.

Furthermore, Harn would have known that Catskill's system did not automatically make a tape recording of touch-tone bets - a security procedure required in some states, but not New York. Catskill assumed it had such a device on its new system and investigators are exploring the omission, according to one source familiar with the probe, who spoke on the condition of anonymity.

Widespread effects

Revelations of the alleged scam have reverberated through the industry, which has grown to depend on computers and off-track wagering like a patient on life support. Last year, 85 percent of the $14.5 billion bet on thoroughbred races in this country was wagered someplace other than where the races were run.

Racing officials in Illinois and Canada last week banned Pick Six and Pick Four wagers. Catskill shut down touch-tone betting. The National Thoroughbred Racing Association has appointed a task force and hired security consultants to audit the system. Autotote has named a chief security officer and promised to transmit multi-race bets promptly.

Tom Gilcoyne, a historian at the National Museum of Racing in Saratoga, N.Y., said the scam, if proved in court, will be the biggest in history.

"In terms of dollars, I don't think there are any that are even close. This could impact the entire racing system as it exists today," Gilcoyne said.

Sun staff writers Ariel Sabar, Mike Klingaman, Laura Barnhardt and Walter F. Roche Jr. and staff researchers Elizabeth Lukes and Sandy Levy contributed to this article.