PHILADELPHIA - The biggest scandal in horse racing history, an alleged $3 million bet-rigging scam, appears rooted in friendships formed in a stately colonial revival mansion here on a campus that brags it is the nation's most wired.
Three men accused of fixing the payoffs in a series of races met and lived a decade ago in the Tau Kappa Epsilon house on Drexel University's fraternity row. Wedged between a sorority and a playground, the 1898 house, with its soaring columns and grand fireplaces, evokes a time of steam locomotives and knickers.
Not so Drexel. The school, which until 1970 was known as Drexel Institute of Technology, has long been a magnet for technophiles and entrepreneurs. It was the first American college, in 1983, to require students to own computers and lately has been among the first to offer a wireless campus network. Its information science program is among the top ranked.
So it's not surprising that Drexel would attract people with a keen eye for the unique opportunities of the digital age. A crime of opportunity is how prosecutors describe the Pick Six case, an alleged manipulation of a computer system that sorts the winners from the losers for an upstate New York off-track betting company.
Despite its technological underpinning, the crime amounted to "garden variety fraud," according to the chief prosecutor. "There was nothing really fancy about this," said James Comey, U.S. Attorney for the Southern District of New York.
The three men - one a former soccer star from Baltimore Polytechnic Institute - are accused of rigging wagers that generated $3.2 million in payoffs. But most of the lucre has been withheld by investigators, brought in soon after a 43-1 long shot, Volponi, captured the Breeders' Cup Classic on Oct. 26. The resulting high payoff attracted the scrutiny of the Baltimore man's Ultra Pick Six bet, which was the only one in the country with the winning horse in six consecutive races. .
Comey filed wire fraud charges Nov. 8 against Derrick Davis of Baltimore, Glen DaSilva of New York and Christopher Harn of Newark, Del. A grand jury may return more charges next month.
They surrendered to the FBI on Tuesday and were released on $200,000 personal recognizance bond. DaSilva and Davis, both of whom tested positive for cocaine at the time of their surrender, were also ordered to take drug tests three times a week.
The three defendants are all 29, and all make their living working with computers. All declined to comment but, through their attorneys, proclaimed their innocence.
"My client denies the charges. We are confident that at the end of these proceedings, he will be exonerated," said Davis' lawyer, Steven A. Allen of Baltimore.
First time in trouble
Trim, handsome and dressed in stylish suits for their hearings at the federal courthouse in White Plains, N.Y., on Tuesday, the men could have easily passed for young lawyers or bond traders - except for the handcuffs.
In fact, friends and relatives of all three say they are stunned by the charges. None of the men had been in trouble with the law, other than an underage-drinking charge filed against Davis in 1993 and a speeding ticket issued in 1998 to Harn in Baltimore.
Davis has been running a computer services business in Baltimore, where he grew up. His parents live in a white Cape Cod in Rosedale, where his mother was reached by phone.
"He's my son and I love him, and that's all I have to say," said Vanessa Davis.
Charlie Sullivan, a former Poly math teacher, remembered Davis as "a go-getter kid, an overachiever who always seemed to do better than he thought he would ... a gritty sort of kid who always seemed like he had a good future."
He was co-captain and a popular forward on Poly's 1990 soccer team his senior year. Mark Schlenoff, athletic director at Poly for 12 years, recalled a student who, in addition to his athletic prowess, was enrolled in the demanding "A Course" engineering curriculum.
"This was a pretty brilliant kid. It requires recommendations by teachers and features a curriculum weighted toward more stringent classes," Schlenoff said.
In the Poly yearbook, alongside Davis' senior picture, is a wide-ranging list of activities: the diving team, student government, Shakespeare workshop and yearbook staff.
A year after graduating, Davis went off to Drexel, a 6,000-student college in Philadelphia's west end. Named for its founder, pioneering financier Anthony J. Drexel, the university has always sought to innovate.
Drexel's 1992 yearbook, the Lexerd, boasts about the school's cyber-orientation, described as crucial "because you can't live in today's society without knowing how to use a computer."
Davis entered Drexel's engineering program in September 1992, never declared a major and left the school in December of the next year without a degree, according to Drexel records.
Along with Harn and DaSilva, Davis in 1992 pledged the TKE house.
"Drexel was not a big fraternity school," said Norman Leebron, who was an adjunct business professor at the school and academic adviser to the TKE house in the 1990s.
The TKE men were a "polyglot group" of business and engineering students, he said. "They didn't get into the usual trouble as fraternities that were rowdier. The Tekes seemed to be more academically oriented."
Harn and DaSilva attended the university from 1991 to 1997 but did not earn degrees. Harn studied information systems, DaSilva business administration and marketing.
Harn stood out at the fraternity for his gangly, 6-foot-3 frame, long hair worn in a ponytail and the jeans and oversized sweaters he preferred to others' preppy attire. He was also the fraternity's computer whiz, a laptop in tow, always several steps ahead of fellow computer devotees.
"He was very helpful to anyone who needed help with computer-related projects," recalled Joseph Wallace, 29, who lived next door to Harn on the fraternity's second floor.
Wallace, a computer engineer who lives in Philadelphia's Center City, remembers Harn as having a self-taught kind of intelligence. "He was independently smart - not really book smart."
As part of the university's co-op program, in which students divide the school year between a job and class, Harn worked as a computer troubleshooter at the University of Pennsylvania.
Inside the frat house, Harn and several brainy friends took turns mastering a video game in which a motley group of objects had to be strung together to solve an puzzle.
"I did level 5 and gave up," recalled David Pyne, 28, a fraternity brother whom Harn had sponsored for membership. "I think they completed the entire game - all 100 levels."
DaSilva was Harn's roommate, and their room housed the fraternity's only cat - a little black one. The two were close friends despite DaSilva's flashier style. And their well-kept room, with a couple of new couches, became a pre-party gathering spot. "Most parties ended up starting there," says Pyne, a self-employed Internet consultant outside Philadelphia.
Davis, a wisecracker who favored what one fraternity brother described as "the newest of the new" in fashion, lived across the hall. At 5-9 and a trim 140 pounds, he played club soccer.
"Derrick was pretty loud," Pyne said. "He always liked to make people laugh. He was just a funny guy, like Seinfeld is a funny guy."
The three were part of a group that went to dance clubs like The Bank, where dress-to-impress young professionals danced to techno music.
The closest they came to gambling was in the in-house football pool, according to Wallace. But another fraternity member remembers occasional trips to Atlantic City.
The fraternity continued to be a draw for Davis, who Pyne said returned periodically "to party."
'Didn't hurt anyone'
Since news of the allegations broke, Wallace says that former fraternity brothers have been calling each other, many expressing disbelief.
"If they did something wrong, this is the first time they did something wrong with their lives," Wallace said. "They shouldn't be crucified. They didn't hurt anyone."
Pyne says that the easygoing Harn didn't have the temperament - or stupidity - to engage in a fraud on this scale.
After college, Davis got married and set up a computer business in Baltimore. State incorporation records list him as president of Utopian Networks Inc., which a friend said provides computer network support for small- and medium-sized companies that don't have their own computer staffs.
In November 1997, Davis bought a house in the 300 block of South Collington Avenue, land records show. His wife, Cara Cameron, answered the door at the house last week. She said she and Davis separated in January and that she plans to file for divorce in a few months. She provided a brief written statement, saying:
"To the best of my knowledge, I am not now nor have I ever been a subject of this investigation. I will continue to cooperate with the FBI and other investigating authorities but will have no further comment."
Records show DaSilva moved to New York after leaving Drexel. One of his attorneys, Rae Downes Koshetz, said he is a "consultant" and is unmarried. The New York Times reported that a Web site for DaSilva Digital - described as a "provider of creative technology-enabled business solutions" - was taken down earlier this month.
After college, Harn landed a job as a programmer in Delaware at the Newark headquarters of Autotote, the top operator of computerized "totalisator" systems that record bets and calculate odds.
Harn met and married a woman from Peru while on a business trip, and briefly took a job at a competitor, International Lottery and Totalizator System Inc., of Carlsbad, Calif., according to Jim Snow, a spokesman for that company.
"We were going to send him to work on a customer site out of the country but he had a new wife and they didn't want to go to Europe," Snow recalled.
Harn instead returned to Autotote as a senior computer programmer in Newark. Two years ago, he and his wife had a baby.
This year, Harn was one of about a dozen software engineers in Newark, according to a co-worker who asked not to be named because Autotote told employees not to speak to the media. One of his tasks was upgrading Autotote's system to allow people to place bets over the phone without going through a clerk. Bettors set up accounts, deposit money and bet by touch-tone phone.
Luck or help?
Just how and when Harn's two friends became involved in betting on horse races is unclear.
Donald Groth, president of a telephone betting service in upstate New York, said Davis told him he was a regular at Laurel Park and . There is no record of him ever filing a tax form, required if he had won more than $600, said Louis J. Raffetto, chief operating officer for the tracks.
On Oct. 18, Davis faxed an account application, which he had downloaded from the Internet, to Groth's company, Catskill Off-Track Betting Corp., a corporation set up by the state and controlled by the counties in the Catskill region. DaSilva had done the same thing on Oct. 3, according to police.
Depending on whom you believe, the men had remarkable luck - or help from a friend on the inside.
On the same day he established his account at Catskill, DaSilva won $1,757 by picking in advance the winners of four consecutive races run at Balmoral Park, a harness track near Chicago. Two days later, he hit a Pick Six, selecting the winners of six races run at Belmont Park in New York. The payoff: $107,608.
But that was chump change compared with what his Baltimore friend would soon win. On Oct. 26, Davis used his Catskill account for the first time to make a series of Pick Six bets on one of the biggest days in racing, the Breeders' Cup. That series of races is called the World Thoroughbred Championships and attracts the fleetest horses.
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.
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.