Fayette County

Lawsuit: Falsified vet X-rays at Keeneland horse sales led to buyers playing ‘Russian roulette’

The Keeneland September yearling sale. Keeneland is not listed as a defendant in the suit. DAVID COYLE KEENELAND PHOTOS
The Keeneland September yearling sale. Keeneland is not listed as a defendant in the suit. DAVID COYLE KEENELAND PHOTOS

Veterinarians at one of Central Kentucky’s largest practices falsified the dates on the X-ray images of horses sold at the Keeneland public auctions for more than a decade, according to a lawsuit filed Thursday in Fayette Circuit Court.

Some veterinarians at the Hagyard Equine Medical Institute in Lexington intentionally altered the dates on which digital X-rays of horses for sale were taken “in order to make it appear the X-rays were taken within three weeks of the sale. In fact, those X-rays were older than that,” the suit alleges.

“The original digital X-rays were then intentionally destroyed and deleted from the mobile radiograph machines by those same veterinarians,” the suit says.

Buyers of young thoroughbreds want to know if the horse they're eyeing can compete as a stakes racehorse and contend for the Kentucky Derby and other world-class races. Here veterinarians review x-rays before a buyer bids on a horse.

In a statement Friday, Michael P. Casey, an attorney for Hagyard Equine Medical Institute, said the lawsuit “is without merit and will demonstrate it is based on a fundamental misrepresentation of the facts. We will vigorously address the misrepresentations and claims made in the suit through the proper legal channels.”

Keeneland maintains a repository of the X-rays. Buyers rely upon those X-rays when they purchase horses at the Keeneland sale and other auctions. The X-rays must be submitted 21 days before the horse is sold at Keeneland’s fall yearling sale and 15 days before horses are sold at other sales.

A series of X-rays “sets a value on these racehorses so people can decide how much they want to pay for them,” Kentucky veterinarian Deb Spike-Pierce told Veterinariansoncall in a 2013 video. Spike-Pierce is currently listed as the president of Rood + Riddle Equine Hospital in Lexington. In the video, she was doing sales work. The X-rays uncover defects or potential problems. “We’re trying to determine the future performance of these young horses.” (Spike-Pierce is not a defendant in the suit and no allegations have been made against her.)

As a result of the altered X-rays, “bidding on horses at the Keeneland sale was, in essence, the functional equivalent of playing Russian roulette,” the class-action complaint claims.

“If those X-rays aren’t valid, there’s no telling what animal is being bought,” said Mason Miller, the Lexington attorney who filed the suit. “It’s so important that the terms of sale at Keeneland require the sellers and the consignors to warrant that those X-rays are accurate or a buyer is entitled to rescind the sale. …So if it had been known and evidence hadn’t been destroyed, every buyer could have asked for their money back.”

The suit says “thousands of buyers” participated in sales with the belief that the repository of X-rays contained authentic records, and “had they known it was a sham, they never would have participated in the sale in the first place,” the suit says.

The suit seeks money for all the allegedly defrauded victims.

In addition to the Hagyard practice, the suit also names veterinarians Drs. Michael T. Hore, Robert J. Hunt, Dwayne Rodgerson and Michael Spirito, whom the suit says are all partners at Hagyard.

The accounting firm Dean Dorton Allen Ford, which provides computer and information technology services for Hagyard, is also named as a defendant. The accounting firm had no comment when contacted Thursday.

Keeneland had no comment Friday on the suit. Keeneland is not listed as a defendant “because I don’t have any evidence to date that they knew this was going on,” Miller said. “From what I understand, they were surprised and not very pleased to learn that this had been going on inside their repository.”

In addition, “John Does 1-100” who represent unidentified sellers and consignors of horses sold at Keeneland, are listed as defendants.

An Illinois resident named Tom Swearingen, a horse buyer and trainer, is the plaintiff who brought the complaint.

Swearingen alone paid more than $400,000 for 24 horses from January 2007 to September 2016, according to a list included in the suit.

Had he known about the altered X-rays, Swearingen “would not have participated in the Keeneland sale in the first place and never would have bought any of the aforementioned horses,” the suit says.

The suit does not allege that buyers bought horses that were injured or deformed in some way.

“We don’t know because the vets destroyed all of the original X-ray records,” Miller said. “We don’t know if a buyer bought a horse that was in a condition that was different than was depicted in the X-ray or not. And we’ll never be able to know because the folks who fraudulently altered the X-rays destroyed the evidence.”

Some of the allegations in the suit filed Thursday became public through a 2017 suit filed in Fayette Circuit Court. A trial date has not been scheduled in that case. Some veterinarians admitted to modifying X-ray dates to the Kentucky Board of Veterinary Examiners, according to court records. Eight Hagyard veterinarians signed “financial’ settlements with the board in January, according to the PaulickReport.com, which covers horse racing and the thoroughbred industry.

That board’s code of ethical conduct says that veterinarians “shall not engage in fraud, deceit or misrepresentation in the practice of veterinary medicine.”

The altered dates on X-rays were discovered in 2006 by a Dean Dorton Allen Ford employee working at Hagyard, the newest suit says. The Dean Dorton employee reported the practice to his superior, who in turn reported it to Hagyard’s CEO and director of operations.

Dean Dorton was instructed to develop and implement a software solution “that would prevent any further fraudulent mis-dating of X-rays,” the suit says.

However, when the radiograph machines were “locked down” so that dates could not be altered, “one or more veterinarians at Hagyard confronted (Dean Dorton’s) employee on site and demanded he ‘unlock’ the machines so that they could promptly resume their fraudulent practice of altering the dates of radiographs for use at Keeneland’s horse sales,” the suit says.

When Dean Dorton reported that to Hagyard’s upper management, the practice’s CEO and/or director of operations requested that Dean Dorton unlock any radiograph machine” upon receipt of such a demand from a Hagyard veterinarian. Dean Dorton agreed to use its expertise to “unlock” the machines, “despite knowing that the purpose was to facilitate the fraudulent alteration of radiograph dates for use at Keeneland’s horse sales,” the suit says.

The suit says that for every X-ray taken by a veterinarian, he is paid a percentage of the amount billed to the client. That “cut” could amount to $4,000 to $6,000 per day for each veterinarian involved, the suit claims.

Keeneland sells about a half billion dollars in thoroughbreds at its annual horse sales, and more than $25 million in commissions and fees are paid to consignors, sellers, veterinarians and the sales agency itself, the suit says.

Greg Kocher has been at the Lexington Herald-Leader since 1997. He covers state and federal courts, and some breaking news. From 1997 to 2016, he was a regional reporter who covered counties adjacent to Fayette County.