Report: Zayat is accused of 'fraudulent' payments in bankruptcy

Former racehorse owner Ahmed Zayat, who campaigned 2015 Triple Crown winner American Pharoah, was accused of misdirecting “fraudulent” payments of about $90,000 to law firms involved in the case, according to a report about papers filed Tuesday in New Jersey bankruptcy court.

According to Thoroughbred Daily News, the court filings were made by Donald Biase, the trustee overseeing Zayat’s personal bankruptcy. Biase claimed Zayat was insolvent at the time the payments were made. As a result, Biase said, the law firms listed as defendants got more money than they would have via Chapter 7 bankruptcy proceedings.

Biase alleged in the documents the fraudulent payments included $42,812.32 to the firm Rabinowitz, Lubetkin and Tully; $20,000 to Landrum & Shouse, $20,000 to Lavely & Singer; and $7,500 to Becker & Poliakoff.

Biase claimed in the court filings that the money Zayat allegedly paid might not have been in line with what was actually stipulated by the court. As such, Blaise aimed to recover the money “and such other transfers that may be unknown” to him.

Biase also sought a judgment ruling against the defendants “for the avoidance and recovery” of money allegedly transferred. He wanted the law firms “to immediately pay to (him) the sums owed” plus interest and any more money “for such further relief as the court may allow.”

Zayat filed for Chapter 7 bankruptcy protection in 2020 and admitted owing $19 million to 132 non-secured creditors, mostly related to his expenses incurred as a horse owner. The creditors included trainers, farms, veterinarians and equine-transportation companies, among others.

Zayat told TDN he would not comment on the story.