WHITE PLAINS, N.Y. - A Baltimore man who tried to steal millions of dollars through rigged bets on horse races was the last of three men to join the conspiracy and the one who broke the fewest laws, yet he could spend the most time in prison.
Derrick Davis pleaded guilty yesterday in U.S. District Court to a single count of conspiracy to commit fraud. He admitted to cashing $22,000 in counterfeit betting tickets and helping an accomplice rig bets to generate a $3.1 million payout from this year's Breeders' Cup.
"I'm truly sorry and regret my involvement in this whole thing. I basically throw myself at the mercy of the court," Davis said to U.S. Magistrate Judge Mark D. Fox.
Prosecutors say they will recommend a prison sentence that could run three years and one month to as much as three years and 10 months when he is sentenced March 11.
He could also be ordered to pay a fine, perhaps $250,000, and make restitution.
Federal prison sentences are calculated by a point system that takes into account criminal history, whether or not the defendant pleads guilty or assists investigators in convicting co-conspirators, as well as the amount stolen.
Davis will get credit for his guilty plea, but will be penalized for the surprise win of a long shot that pushed the prize money well beyond anything anticipated by the accomplices. The three men, all 29, were fraternity brothers at Drexel University in the early 1990s.
In mid-October, Davis opened a telephone betting account at a New York state off-track betting outlet so that Christopher Harn of Newark, Del., could rig bets.
At the time, Harn worked as a senior computer programmer for Autotote Systems Inc., which operates computers that process wagers for racetracks. The company fired him last month.
Harn used Davis' account to bet on the Breeders' Cup, run Oct. 26 near Chicago. Harn bet on the Ultra Pick Six, in which gamblers guess the winners of six upcoming races.
Exploiting a delay in the transmission of wagers between betting hubs, he was able to use his access to Autotote's computers to digitally change the bets after most of the races had been run.
Because a 43-1 long shot, Volponi, won the last race, Davis ended up with the only winning Pick Six tickets in the country, worth nearly $3.1 million. The payout was frozen by investigators, who were suspicious of his wagers and quickly unraveled the conspiracy.
Earlier this year, Davis had been recruited by Harn for another scheme in which Harn prowled through the computers of Autotote clients in search of winning bets that had not been cashed, presumably because the gamblers lost the tickets or were unaware of having won.
Davis cashed $22,000 in tickets at Philadelphia Park and split the money 50-50 with Harn.
Harn was the first to plead guilty, admitting he was the mastermind who recruited the other two. He pleaded to a single count of conspiracy to commit fraud and a single count of money laundering for trying to disguise the winnings.
He agreed to testify against his friends, providing a crucial boost to prosecutors who were frustrated in the lack of evidence generated by the Autotote computers.
As a result, his sentence will be reduced sharply from the maximum possible of 25 years. Prosecutors have not said how much prison time they will seek for him, but one attorney involved in the case estimates that it could end up less than four years or as many as seven.
Glen DaSilva of New York pleaded guilty on Wednesday to conspiracy to commit fraud and money laundering. Prosecutors said they would recommend a sentence ranging from one year, nine months to two years, three months.
DaSilva was recruited by Harn late last year and cashed more counterfeit tickets than Davis - worth more than $90,000. He also purchased bank checks and sent them to Harn's creditors, drawing the money-laundering charge.
But the take from that crime and from a pair of rigged bets placed through the same telephone betting system raised only about $200,000 - calling for a lesser sentence under the guidelines.
Davis' attorney, Steven A. Allen of Baltimore, said he will try to persuade the sentencing judge that Davis played a small part in the crime and should receive less than 37 months.
"He had a minor role and he should serve a sentence that is proportional to similiarly situated defendants, namely DaSilva," Allen said.
To bolster his case for Davis' cooperation, Allen told the judge yesterday that Davis waived any claim to the $3.1 million and was willing to do what he could to expedite its redistribution to the rightful winners - the bettors who correctly picked five of the six races.