Iavarone Ready to Re-Enter Racing


Michael Iavarone | Horsephotos


Michael Iavarone, the founder of IEAH Stables, which enjoyed a spectacular ride before imploding, is planning to get back into Thoroughbred ownership and says he’s ready to make another significant investment in the sport.

Iavarone said this time around his only partner will be his wife, Jules, and that he is not interested in forming another racing syndicate or taking on other partners.

“I’m going to do it on my own and only worry about myself and not anyone else,” he said. “I’m definitely going to get back into the game and I’m going to do it on a significant scale. I only like to play at the higher end. I don’t like to dabble around with lower-end horses.”

Iavarone had hoped to make a big splash upon his return as he said he was in negotiations to purchase GII Fountain of Youth S. winner Gunnevera (Dialed In). Though he didn’t land Gunnevera, he said he is actively looking to buy other top-class horses and believes it may be only a matter of weeks before he has his first starter of the year.

The IEAH story started as one of the great success stories in the sport’s history. Iavarone and partner Richard Schiavo, unknowns in the racing industry, started the syndicate in 2003 and almost immediately built a stable filled with stars. Their greatest talent, of course, was 2008 GI Kentucky Derby and GI Preakness S. winner Big Brown (Boundary), but there were others. IEAH stakes winners included Eclipse Award winner Benny the Bull (Lucky Lionel), GI Breeders’ Cup Mile winner Kip Deville (Kipling), multiple Grade I winner Court Vision (Gulch) and GI Breeders’ Cup Juvenile Fillies winner Stardom Bound (Tapit).

But IEAH was often far from a feel-good story. Their trainer was the controversial Rick Dutrow, Jr., who is currently serving a 10-year suspension for drug violations. And IEAH, like many racing ownership groups that grew too quickly for their own good, was having trouble keeping its head above water financially. In order to keep the business going, IEAH was accepting money from James Tagliaferri, who was investing money on behalf of his clients and receiving kickbacks for doing so from IEAH and other companies. The kickbacks were disguised as consulting fees for Tagliaferri. In 2014, Tagliaferri was found guilty of investment adviser fraud, securities fraud and wire fraud as part of schemes that caused his clients to lose $50 million.

Iavarone and Schiavo were never charged with any crimes.

The person who outed Tagliaferri was Matthew Szulik, who sued Tagliaferri’s business for $60 million, alleging he was investing his money in “sketchy businesses,” including IEAH. Szulik argued that Tagliaferri was getting kickbacks for leading his investors to companies that weren’t on firm financial ground, IEAH among them.

Iavarone also contributed to IEAH’s problems and the perception that not everything was above board. According to a 2008 New York Times story, he claimed to have worked for Goldman Sachs before starting IEAH, which was not true, and had been fined and suspended for making unauthorized trades.

With Tagliaferri’s arrest and with a costly and ill-advised venture into the equine medical field (IEAH built the Ruffian Equine Medical center across the street from Belmont Park), IEAH was finished. It ran its last horse in 2013.

Asked if IEAH’s downfall and the negative publicity surrounding Tagliaferri has forever sullied his reputation around the racetrack, Iavarone said people understand he was not the one to blame for all the problems.

“I think people have figured out who the bad guy was,” Iavarone said. “The same person who took advantage of IEAH took advantage of me, as well as some other people. When the investigations were still going on, there was not a lot I could say. Everybody now understands a little bit better what was going on. Unfortunately, Matt Szulik did what he did. At the time, I didn’t quite get it. I didn’t even understand what was happening and by the time it was all figured out it was too late. Matt dropped a bomb on everything and everyone, but now I get why he did what he did.”

Iavarone said he personally lost $8 million due to his association with IEAH.

“Sometimes, you’ve got to lose it to make it,” he said. “I learned a lot of good lessons from this. I think I’ve come out wiser and for the better. Despite everything that happened, you can never take away the experiences we had, the things we accomplished and the fun we had. It was incredible right up to the end.”

Soon after the last IEAH horse ran and the Ruffian Equine Medical Center (which was bought by Cornell University and re-opened as the Cornell Ruffian Equine Specialists) closed its doors, Iavarone virtually disappeared from the racetrack. He said he has been working for Phoenix Financial Services. There, he met his second wife, the former Jules Boutelle, who owned 2011 GI United Nations S. and GI Gulfstream Park Turf H. winner Teaks North (Northern Afleet).

Iavarone said that he didn’t follow racing that closely during his absence but never lost his desire to get back into the sport.

“I really only watched the game from afar,” he said. “l was not dying to get back in, but there was an urge and that’s because I love the sport. I had to wait until all the issues were taken care of and I was able to get myself back together financially.”

Iavarone said he will build his new stable just the way he built IEAH. He will look for horses in training that already have proven track records that he believes will improve.

“I’ve got Nick Sallusto (who brokered the deal for IEAH to buy Big Brown) out there right now looking for horses for me,” he said. “I don’t know how many I’m going to have. It will depend on how much fun we are having. Obviously, the more successful you, are the more fun you are having. At 46, I hope I still have plenty of time to have fun in this game.”


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