DES MOINES — A prominent leader of the nation's greyhound racing industry told an Iowa investigator that he had hidden ownership for about five years in a kennel at Bluffs Run greyhound track in Council Bluffs, a newspaper reported.
Herb “Dutch” Koerner of Hays, Kan., a dog breeder, owner and kennel operator who served 10 years as president of the National Greyhound Association, said he secretly held a 50-50 ownership in the Haynes Kennel with Jason Haynes between 1998 and 2002. They equally split the profits, he said.
The copyrighted story appeared in the Des Moines Sunday Register.
Haynes, of Bellevue, denies any improper business relationship with Koerner.
Koerner also acknowledged working with Haynes to have ineligible greyhounds falsely certified as Iowa-bred dogs in an effort to make additional money, Iowa Racing and Gaming Commission records say.
Iowa-bred greyhounds have a special status at Iowa tracks that provides opportunities to win more money in an effort to promote the dog-breeding industry.
Hidden ownerships are prohibited by state regulations designed to protect the integrity of the gambling industry, and in the worst circumstances are intended to keep out organized crime, said Jack Ketterer, administrator of the commission.
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Fraudulently having dogs certified as Iowa-breds is serious because it takes purse money away from the owners of genuine Iowa-bred dogs, he said.
People who bet on Iowa-bred dogs that may have lost races to ineligible dogs are unlikely to recoup their losses.
No criminal charges have been filed against either Koerner or Haynes, although the matter remains under review, said Robert Brammer, a spokesman for the Iowa attorney general's office.
Koerner, 72, is a member of the National Greyhound Hall of Fame in Abilene, Kan. He was on the national association's board from 1982 to 2000, including a decade as president. He entered the greyhound business in the late 1950s as a breeder, and his farm operation has been featured in industry videos.
Carey Theil, president of Grey2K USA, a greyhound protection organization based in Somerville, Mass., said Koerner's admissions are stunning because of his stature in the dog racing industry.
“I think his actions are shameful and something the industry should be embarrassed about; a national leader of the greyhound industry has admitted to using deceitful conduct and fraudulent activities for financial gain. I think this calls into question the credibility of the entire greyhound industry,” Theil said.
He criticized the Iowa Racing and Gaming Commission for failure to uncover the activity and stop it.
He said the state's leaders should re-examine the commission's policies to ensure similar problems don't happen again.
“These individuals used fraud and deceit to enrich themselves. The commission completely failed in its duty to regulate the greyhound industry,” Theil said. “This fraud apparently went unnoticed by the Iowa Racing and Gaming Commission for years, despite the fact that it happened right under their nose…If they missed this, who knows what else they are missing.”
Ketterer said the commission had no indication anything was amiss with the Haynes Kennel until Haynes' name surfaced in a criminal investigation in Wisconsin. Then state regulators began receiving tips from other Iowa dog breeders about the Haynes Kennel and began following up, he said.
“We have the Iowa Division of Criminal Investigation do the backgrounds on all of our licensees. We have confidence in what they are telling us,” Ketterer said.
Haynes, 40, is a former president of the Iowa Greyhound Association and was vice president of the National Greyhound Association under Koerner in the late 1990s. His troubles began after his name arose in a criminal investigation in Wisconsin of a conspiracy that resulted in the contamination and recall of millions of dollars' worth of animal feed products. Haynes had been a salesman for a competing firm in the animal feed industry and he allegedly had knowledge of the contamination. He testified as a witness in exchange for not being criminally prosecuted, records show.
The controversy comes at a time when interest in live greyhound racing in Iowa is plunging.
As recently as 1995, gamblers bet $24.2 million on live races in Council Bluffs, while purses for top-finishing dogs totaled about $2.6 million.
In 2004, betting on live races at Council Bluffs dwindled to $6.2 million, far less than the $9.2 million paid in purses, which were heavily subsidized by slot machine profits.
Koerner's alleged secret deals with Haynes were disclosed in proceedings after Iowa racing regulators declined to renew a state license for Haynes, who had raced greyhounds at tracks in Council Bluffs and Dubuque.
Koerner made the admissions in an interview with Marc Wallin, an investigator for the Iowa attorney general's office, on Sept. 11, 2003. Koerner's statements have surfaced in Bluffs Run Board of Stewards' decisions filed in December 2004 and again earlier this month.
The stewards in December denied Haynes' attempt to regain a state license and said he “engaged in dishonest, undesirable and fraudulent conduct by participating in a hidden ownership with Herb 'Dutch' Koerner, a non-Iowa resident.”
Haynes, who last raced dogs in Iowa in early 2003, denied last week having any improper business relationships with Koerner and he is appealing the state's latest denial of his license application.
“I never had any hidden partnership with Herb Koerner. I owned dogs with Herb Koerner, but every allegation that he has made against me has been false,” Haynes said.