Equine Ponzi Scheme
“We felt like victims of an equine ponzi scheme at the hands of Cesar Parra,” say the Morgans. The couple recently settled their multi-year suit with the Piaffe Performance Inc dressage trainer.
“We stayed vigilant and steadfast in our position because we wanted to send a message to not only Cesar Parra, but all horse trainers that their business practices are being watched.”
It this reason, the Morgans say that they would not cave and agree to a confidentiality or non-disparagement clause in the settlement documents. “To have agreed to those provisions would have defied the very purpose of the litigation.”
Legal experts tell us many people don’t realize that a confidentiality clause is not required at settlement, but rather a bargained for term that comes with monetary consideration.
Looking back, the Morgans said their first mistake was trusting that Parra actually owned ECU8 as outlined in their contract. They say they were shocked to learn Parra was still making payments on the horse to the original owner overseas long after the sale was completed. Perhaps the largest surprise was the fact that the Morgans learned that a third party in Germany was using their funds to pay insurance premiums on ECU8, but the Morgans were not the beneficiary as they believed.
The Morgans say there were red flags that were missed. One flag was an arbitration clause in their contract binding them to use a company that had been dissolved many years before. Another flag was having their percentage of the horse insured with one company and Parra’s with another. However the most widely used of Parra’s tactics was saying nice things about the existing horses while instilling the idea that better horses were needed to win.
The couple said they were first suspicious when Parra advised them that their new horse, Florence, needed to return to Europe because the farriers in the U.S. could not properly shoe her. A few months after Florence was shipped away, Parra and his assistant trainer Katie Reilly asked for a sit-down meeting. The Morgans say Parra advised them that Florence was not doing well and could likely die. Parra wanted to be sure the mare’s insurance coverage was in place. The Morgans say they felt there was an underlying message from Parra. Having grave concerns for Florence, Dr. Morgan contacted the treating veterinarian in Germany. When they were told that Florence’s prognosis was good, they say they concluded they could no longer trust Parra and all further remedies would need to be found in court.
The Morgans found one of the most difficult things about the suit was pursuing Parra’s associates in the US and Germany. The Morgans, with attorney Michael Klimke, of the Dr. Klimke & Kollegen firm in Germany, pursued legal action against Arnd Eben and Mathieu Beckman in an attempt to obtain Florence’s actual sales records. Eben and Beckman told the court that they had no knowledge of where the invoice provided by Parra from Erben GmBh originated. Parra supplied the invoice in question to the Morgans as proof of the five-year-old mare’s alleged value of 585,000 euro.
The Morgans also sued Greg Staller, DVM of Running S Equine in New Jersey. The Morgans learned Parra was having their horses treated for significant ailments and injuries that he, nor Dr. Staller, ever discussed with them. After the litigation commenced, the Morgans couldn’t secure their horses’ vet records from Dr. Staller. Ultimately, Dr. Staller provided some incomplete records as a result of the suit against him.
“Litigating equine related cases is not for the faint of heart,” say the Morgans. Although, they are content the matter has been resolved which leaves a record trail for future clients.