Ticket broker Scott Davis, who owns DerbyDeals.com, this week was charged with five counts of attempted theft, five counts of failing to remit sales taxes, and five misdemeanors and infractions for failing to properly register his business, in connection with an alleged Kentucky Derby ticket scam. Davis is also a county magistrate for Kentucky’s Oldham County.

Davis was charged in Indiana, and in part the case stems from a lawsuit Davis filed in Kentucky in May against Steve Masiello, a University of Louisville men’s basketball coach. In the lawsuit, Davis claims he paid Masiello and Stephen Netherton $70,000 to deliver tickets for the May 2010 Kentucky Derby and Oaks. Masiello allegedly delivered $10,000 worth of Derby tickets, returned $10,000 in cash, but pocketed the leftover $50,000. Davis then allegedly was unable to deliver tickets to several customers.

According to authorities, Davis will be the only one charged by Indiana prosecutors. On Tuesday, June 8, Masiello passed a police polygraph in Indiana, which clears him of any involvement in the alleged scheme. Masiello has denied the allegations in the lawsuit.

Davis has vehemently denied the charges, and reportedly said that he has paid back the customers. Thomas Clay, a lawyer for Davis, told TicketNews, “We’re very disappointed in the outcome of the investigation. In my opinion, Scott Davis was a victim of fraud, the victim of a crime, and not someone who should be charged with a crime because he had a good faith reliance on other people to provide the merchandise that he promised to others.”

According to the chain of events laid out in Davis’s lawsuit, Davis allegedly met with Masiello in March and asked if Masiello could procure Derby tickets. Allegedly, Masiello offered to talk to his connections, including University of Louisville head coach Rick Pitino.

Davis says he paid Masiello $70,000 in five payments. Masiello allegedly delivered two sets of tickets on April 16 but the deal fell apart when Masiello told Davis that Carl Pollard, chairman of Churchill Downs track, ordered his ticket office not to release tickets to Masiello because they did not want them going to a broker. Two more alleged attempts to get tickets from trainer Dallas Stewart and from a newspaper reporter who was planning on buying a large volume of Derby tickets also failed.

The suit claims a man identified as “Steve #2” was present in a meeting where Masiello took $20,000 from Davis. “Steve #2” has been identified as Stephen Netherton, who pleaded not guilty to charges in an unrelated case where he allegedly did not deliver Ryder Cup tickets to Ticket City and JC Tickets after they wired him $125,000. He will be in court September 7 to settle that matter. Also in another unrelated case from 2007, Netherton pleaded guilty to defrauding investors, banks, and businesses out of more than $250,000.

In his suit, Davis says he was left “holding the bag” and unable to deliver tickets to paying customers.

Pollard reportedly has said he does not know Masiello. Stewart also claims not to know Masiello or Davis. Masiello’s attorney, Larry Wilder, said in May that his client “has been libeled, slandered and maligned.”

Davis’s Kentucky suit against Masiello is still ongoing.

Last Updated on June 10, 2010