Infighting between the Simms brothers threatens the reputation and future of their pari-mutuel track and raises questions about the Arizona Racing Commission’s oversight.
Two brothers who dominate Arizona horse racing are locked in a sibling struggle for control of the Turf Paradise track in Phoenix, accusing one another of criminal conduct and raising questions about Arizona’s regulation of the gambling enterprise.
On one steed rides Jeremy Ellis “Jerry” Simms, majority owner and manager of TP Racing LLP, which operates the thoroughbred enterprise. Jerry claims his older brother, Ron, lied for years about investments in their partnership as part of a scheme to defraud the state and evade taxes.
On the other horse sits Ronald A. Simms, a former TP Racing partner who says Jerry was disreputable even before they acquired Turf Paradise 16 years ago. As evidence, Ron points to his sibling’s past role in a California political-corruption sting, and to financial dealings with a former mob-tied casino operator. Ron alleges Jerry misappropriated millions of dollars from Turf Paradise while using Arizona courts, politicians and prosecutors in a “secret backdoor scheme” to cheat him.
Caught between them are regulators at the Arizona Department of Gaming, charged with ensuring the honesty of horse racing, and members of the Arizona Racing Commission, who overturned key agency decisions while privately maintaining close friendships with Jerry.
The nearly seven years of legal wrangling is costing Arizona taxpayers untold dollars in court expenses, investigations and attorney fees. Perhaps more importantly, the dispute raises red flags about the integrity of a pari-mutuel wagering business with an annual handle, or pari-mutuels wagering total, of more than $100 million.
Some equestrian enthusiasts contend Turf Paradise has run amok, and the brotherly battle is jeopardizing the future of Arizona horse racing. Much of their criticism is leveled at Jerry and his ties with key Racing Commission members.
“He circumvents all authority,” said Steve Nolan, a Turf Paradise trainer who has had numerous run-ins with Jerry, and is banned from the racetrack. “He has had the most negative impact in the history of racing in this state.”
Kevin Owens, a former president of the Arizona Thoroughbred Breeders Association whose father once owned Turf Paradise, said the Simms dispute is causing “collateral damage” to horsemen, fans and taxpayers, with annual payouts diminishing in part to cover legal costs.
“We’re a struggling industry,” added Lloyd Yother, president of the Arizona Horsemen’s Benevolent and Protective Association, which represents about 1,500 racing professionals. “And, right now, with what the state’s putting on us and what the Simms brothers are doing, it’s putting us out of business.”
Arizona Department of Gaming records seemingly reflect declines in business at Turf Paradise in the past five years. That includes drops of 20 percent in on-track attendance, 26 percent in the number of live races, 17 percent in the total betting handle and 18 percent in purses.
Jerry Simms disputes that business is down, and said the agency report does not include data from out-of-state wagering or county-fair races conducted at Turf Paradise. When betting from those events is added, he said, Turf Paradise’s total handle — $262.3 million in 2016, says the track — has not substantially changed over the past five years.
He notes the average daily handle on live race days is up slightly from five years ago — though the current average is calculated on fewer race days than in the past.
“I get so incensed when someone says your business is down,” he said.
To the extent that Turf Paradise has suffered a downturn, Jerry and General Manager Vince Francia said blame goes to an industry-wide slump that has closed many tracks. They said Indian casinos have siphoned away gambling dollars, and a shortage of thoroughbred horses has forced tracks nationwide to run fewer races.
Still, they insisted, Turf Paradise is thriving with special promotions such as wiener dog races and last weekend’s Kentucky Derby Party — and with no adverse effect from the sibling feud.
“There is no impact between the Simms brothers’ litigation and the vitality of the Arizona horse-race industry and the future of Turf Paradise,” Francia said.
Ron Simms’ attorney, Stacy Harrison, noted that her client was ousted from Turf Paradise management three years ago, then added: “Ron does know that Jerry has spent millions of the track’s money — without Ron’s consent — in the litigation and in Jerry’s wrongful efforts to convince the agency to deny Ron’s racing license. Ron, on the other hand, has spent his own money, and not a dime of the track’s money, in this matter.”
A matter of ‘good repute’
Turf Paradise horse racing is regulated by the Division of Racing, a state administrative agency within the Department of Gaming, and by the Arizona Racing Commission — a board of five members appointed by the governor.
Two commissioners — Tom Lawless and Jay McClintock — acknowledge close personal ties with Jerry. They socialize at Turf Paradise and one another’s homes. They hang out regularly at an off-track betting bar on Camelback Road, near their homes.
A third commissioner, Chairman Rory Goreé, employed one of Jerry’s attorneys for personal legal matters.
At the urging of Jerry and his attorneys, the trio recently voted to ban Ron from horse racing based on a finding that he “does not have sufficient good repute.” All three commissioners declined to recuse themselves, claiming their relationships did not create legal or ethical conflicts.
In siding with Jerry, the commissioners overruled findings by an administrative-law judge who, after weeks of sworn testimony, concluded that Ron is a decent man and the victim of a smear by the so-called “Jerry Group.” The commissioners also reversed a decision by the state Racing Division director, who had upheld the judge’s findings.
The commission decision is now under appeal. A Maricopa County Superior Court complaint alleges that Jerry and his lawyers waged “an unlawful campaign” to force Ron out of Turf Paradise, and did so by corrupting a former state regulator and members of the commission.
While those developments were significant, they represent just one furlong in a marathon sibling dispute that has bounced from paddocks to courtrooms to the state Capitol.
Ron Simms declined comment for this story. However, his lawyers —and those representing Jerry — provided thousands of pages of records, and their arguments are memorialized in court files and regulatory hearings.
When past is not prologue
The track at 1501 W. Bell Road was built 60 years ago on 279 acres of now prime real estate.
Live races run from October into May, drawing well over 200,000 gamblers and spectators to the track each season. According to a recent academic study, Turf Paradise has a $91 million annual impact on Arizona’s economy.
The Simms brothers and other investors acquired the business in 2000 for $53 million, triggering immediate controversy because of Jerry’s history.
During the late 1980s, Jerry had gotten tangled in a California political-corruption case known as “Shrimpscam,” which sent 15 people to prison, including legislators and other public officials. As an immunized federal witness, he admitted making a loan to a public official that was a bribe, and playing a role in an extortion plot, according to court records.
In a recent interview, Jerry said he did not realize at the time that he was paying a bribe. He noted that an FBI case agent in California signed an affidavit declaring Jerry was a crime victim. And a former Arizona Gaming Department investigator gave a sworn statement averring that Jerry is truthful.
Jerry also was a close friend and business associate to Allen Glick, a Las Vegas casino operator who once served as a front man for Mafia skimming operations. Under an immunity grant, Glick testified against mob bosses in the mid-1980s, and helped put several behind bars. He and Jerry became friends and engaged in multimillion-dollar loans.
Jerry has no criminal convictions. Arizona statutes, however, require more of racing-permit applicants: They must be “of good moral character.”
In 2000, when Jerry and his group acquired Turf Paradise, the brothers submitted documents and testimony indicating their respective investments were made in the form of promissory notes. Racing Division leaders recommended approval. However, after an Arizona Republic report on Jerry’s background, Gov. Jane Hull fired the agency director and ordered further investigation.
A new administrator recommended denial of Jerry’s permit. But the Racing Commission, then chaired by attorney A. Melvin “Mel” McDonald Jr., overruled. TP Racing was licensed and underway. (McDonald, an ex-judge and former U.S. attorney, spent 20 years on the Racing Commission as a staunch advocate for Turf Paradise. He then became one of Jerry’s lawyers. More on that later.)
Big gamble, bigger plans
From the beginning, Jerry wanted to expand the business by establishing off-track betting via simulcasts in Native American casinos.
To do that, he needed a separate license from the Arizona Department of Gaming. But officials in that agency moved to deny a permit based on Jerry’s “history of inappropriate and corrupt dealings, his dishonest business activities, his questionable associations, and the false statements he has made …”
Legal battles proceeded into 2008, when the Arizona Court of Appeals upheld the Gaming Department decision. Justices found that Jerry’s “history of bribery, extortion and association with organized crime figures … would pose a threat to the Arizona gaming industry.”
Around the same time period, Jerry was required to seek renewal of his Racing Division permit for Turf Paradise. A new agency director, Geoffrey Gonsher, found Jerry “unsuitable,” and recommended denial, according to a state audit.
In addition to previously disclosed background issues, Gonsher alleged that TP Racing:
- Placed horses, jockeys and others at risk with unsafe operations.
- Failed to cooperate with background investigations while displaying a “dangerous pattern of disregard” for regulatory authority.
- Created an “impression of impropriety” because of Jerry’s friendship with then-Racing Commission Chairman Burt Kruglick. The relationship was significant, Gonsher wrote, due to Jerry’s “troubling pattern of … attempts to take advantage of financial situations and relationships with government authorities.”
The commission rejected Gonsher’s recommendation. Jerry’s permit was renewed, and Jerry to this day argues he was the victim of politics.
A sibling schism
After nearly a decade of turmoil, controversies enveloping Turf Paradise seemingly subsided.
Then, in 2010, Jerry sent Ron a letter demanding immediate payment of his investment — the promissory note, for $4.6 million.
An all-out war broke out, with the brothers exchanging criminal accusations and launching attack campaigns against one another.
Jerry hired prominent Arizona attorney Mike Manning, as well as McDonald, the former racing commissioner.
Ron employed California lawyer Marshall Grossman, who has represented celebrities such as Steven Spielberg, Mariah Carey and Clint Eastwood. Ron also hired former U.S. Attorney Paul Charlton.
Most of the intrigue was hidden by Maricopa County Superior Court judges who sealed the entire case for several years. In 2013, filings finally were opened, and the two sides began ripping one another in public hearings and secret letters to state officials.
According to court records, Ron filed briefs and gave sworn testimony that contradicted information submitted under oath years earlier when he sought a racing permit. Confronted about those discrepancies, Ron claimed his promissory note was not a “real” investment in TP Racing, but a “placeholder” created as part of an undisclosed “oral side deal” with Jerry. He asserted that his true investment was land at Turf Paradise, even though he had previously sworn that property was the sole possession of his wife.
Ron, an attorney and certified public accountant, insisted his false statements were inadvertent. He blamed associates for incorrect tax and corporate records that he had signed under penalty of perjury. And he alleged that Racing Division officials knew the promissory note was not authentic because they helped orchestrate the charade.
When contradictions in Ron’s story were unsealed, Jerry wrote a letter to the Racing Division accusing his brother of multiple crimes. Manning, Jerry’s lawyer, followed up by delivering to the regulatory agency 10 binders of purported evidence against Ron.
In a cover letter, Manning urged then-Racing Division Director Bill Walsh to revoke Ron’s license for “perjury and schemes and artifices to defraud.”
According to court testimony and filings, Walsh took personal control of the case, shunting aside his lead investigator.
The Sachi case
Around that same time, Jerry attacked on another front, unrelated to Turf Paradise: He asked then-Arizona Attorney General Tom Horne to file charges against Ron alleging embezzlement of $1.6 million from a joint real-estate venture on Scottsdale Road, known as the Sachi Building.
While the dispute does not relate to horse racing, it became entangled in the sibling war.
In a letter to prosecutors, Jerry alleged his brother used “secret accounts” to “steal the (Sachi) company’s money” and “defraud the Internal Revenue Service.”
State records show the accusation became a “Priority 1 Case,” and Horne took a direct interest. The assigned prosecutor noted in a memo that Horne “asked me if I could file charges myself (even though there had not been a proper criminal investigation conducted).”
Ron’s lawyers, meanwhile, were pressing behind the scenes to quash the case. Charlton wrote a 25-page letter to Horne’s criminal-division chief, Andrew Pacheco, who earlier had been Charlton’s subordinate in the U.S. Attorney’s Office.
Charlton argued that Jerry was not credible due to a “documented and long record of manipulating public officials to achieve his own unlawful ends.” He enclosed a political fundraising invitation for Horne that listed Jerry as co-host, plus a photo showing Horne and Jerry together.
The case prosecutor responded with a memo decrying the “not-so-veiled threat by Mr. Charlton that if we do not do as he demands … these two exhibits will somehow show up in the media with a claim that (Attorney) General Horne is only bringing these charges as a favor to his ‘friend and campaign supporter.’ ”
An internal ethics analysis was conducted at the Attorney General’s Office. Records show Horne and Pacheco withdrew from all Simms-related issues to avoid conflicts.
In December 2014, Horne’s staff decided not to prosecute Ron in the Sachi matter because there was no reasonable likelihood of conviction.
‘You did a terrific job’
In late 2013, the Jerry Group had continued pushing to have Ron barred from Arizona horse racing.
Walsh, the Racing Division director, submitted a referral to the Attorney General’s Office “to determine whether evidence exists to bring criminal charges against Ronald A. Simms” for alleged perjury and fraud while obtaining a racing permit.
Walsh discovered that Ron’s license had expired. Revocation was no longer necessary. But, after Ron applied for a renewal, records show, Walsh drafted a denial letter and emailed his findings to Jerry’s other lawyer, McDonald, with a note urging him to “keep them to yourself.”
McDonald had begun working for Jerry in 2013 just months after leaving his post on the Racing Commission. He was well acquainted with Walsh, the agency director. According to court records, the two communicated via private email accounts.
McDonald suggested changes to the denial notice that would effectively ban Ron from any role in Arizona horse racing. He urged Walsh to issue the denial promptly so Jerry’s lawyers could use it in civil litigation.
“You did a terrific job,” McDonald wrote in one email. “An A+ job.”
Upon learning of the exchange much later, Ron’s lawyers accused the Jerry Group of perpetrating an “unlawful scheme to corrupt the regulatory process.” They appealed the license denial to an administrative-law court.
Jerry and other partners, meanwhile, voted to disassociate Ron from the Turf Paradise ownership group.
In June 2015, after 20 days of testimony, Judge Michael Douglas ruled in Ron’s favor. Douglas treated Ron’s past false statements as unintentional mistakes. He concluded that Jerry’s legal team “collaborated” with Director Walsh to oust Ron, using “ex parte influence” in the process. “Evidence presented at hearing established that Mr. (Ron) Simms is qualified to be licensed,” Douglas concluded.
Walsh, who had deleted his email correspondence with McDonald, according to legal filings, resigned amid the controversy. He recently told The Republic his behavior was not improper. “In the end, you wish you’d done things differently,” he said. “(But) I don’t think I did anything illegal.”
McDonald said his behind-the-scenes advocacy for Jerry was ethical. He said private email systems were used because he works from his home and Walsh was out of town at the time of the correspondence.
“What I was doing was entirely proper,” McDonald said. “I didn’t do one thing that Ron didn’t do in spades — his side.”
Delivering the chicken soup
Attorney Manning, livid at the judge’s ruling, urged new Racing Division Director Rudy Casillas to reject the administrative-law verdict and deny Ron’s license. He argued that Douglas’ decision was outrageous.
Casillas declined to overturn Douglas’ findings.
So Jerry shifted efforts to the state Racing Commission, asking it to overrule the judge and the agency director. In that forum, Jerry had clear support from members McClintock and Lawless.
The men acknowledge regularly hanging out together. During public hearings, lawyers for Ron displayed photographs of the commissioners with Jerry at Armadillo Grill, a Phoenix off-track betting parlor. They also presented emails showing Jerry was so close with Lawless he offered to make a home delivery of chicken soup when the commissioner was ill.
Amid wrangling over those issues, commission Chairman Goreé made another revelation: He had retained McDonald, Jerry’s attorney, as his personal lawyer in a private legal matter.
McClintock, Lawless and Goreé insisted that, despite the various relationships, they could vote on Ron’s license without bias or conflicts. On Oct. 21, commissioners decided 4-1 that Ron had made “knowingly false statements.” They ruled he “does not have sufficient good repute and moral character” to be licensed.
Commissioner William “Bill” Feldmeier dissented, calling the proceedings a “witch hunt” directed by Jerry. He resigned less than three months later. In an interview, Feldmeier criticized his former colleagues for failing to promote a dying industry, and for their involvement in the Simms case. “It probably ought to just go away,” he added of the commission.
The denial of Ron Simms’ racing permit is now under appeal. In a Maricopa County Superior Court filing, Ron’s attorneys list 19 reasons the Racing Commission vote should be overruled. Their overall point: “Jerry and his counsel had managed to corrupt both Director Walsh and the commissioners who sat in judgment …”
McDonald’s response: “This is the only way those people know how to fight, is dirty. Everything is ‘corrupt.’ … It’s complete, utter garbage.”
Other Simms litigation, meantime, moves glacially in Maricopa County Superior Court. At least 10 judges have taken it on over six years.
In one key ruling, Ron was ordered to pay off his $4.6 million promissory note. The court has yet to finally rule on accusations that Jerry fraudulently set up the Turf Paradise deal and conspired to strip Ron of his permit and partnership.
The full legal cost to taxpayers is unknown.
Amid the wrangling, Mark Brnovich replaced Horne as state attorney general. Brnovich from 2009 to 2013 served as the state Gaming Department director. Before that, as an assistant attorney general, he was legal counsel for the agency. And, during the 2014 political campaign, he received contributions from Ron and family.
Brnovich recused his entire office from all matters relating to the Simms dispute. As a result, numerous private law firms represent the Gaming Department, Racing Division and Racing Commission at a cost of roughly $300 per hour for each lawyer.
In just three years, the state has paid $739,248 to private lawyers representing the Department of Gaming in connection with the Simms controversy, according to agency records. (Some of that money came from racing purses.)
Manning sums up the Jerry Group’s position today with these words: “For nearly 20 years, Jerry has crossed every regulatory ‘T’ and dotted every integrity ‘I’ managing Turf Paradise … Ron invents conspiracy theories and ‘false news,’ rather than explain why he lied to TP’s regulators for so many years.”
Grossman, meanwhile, portrays his client as a victim: “Ron Simms is a man of impeccable reputation, a civic leader and philanthropist,” he said. “Is he a saint? No. But does he deserve any of this? Hell, no. He’s been put through the ringer.”
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