Wow! In racing news....Mick Ruis is in trouble.
Federal prosecutors in San Diego have indicted three scaffolding executives on charges that they conspired to defraud the United States through a scheme that allegedly involved lies and trickery to secure construction-related contracts with the U.S. Navy.
The lead defendant in the case is Alvin "Mick" McDonald Ruis Jr., a racehorse owner, breeder and trainer who in 2018 trained Bolt d'Oro, one of the entries in that year's Kentucky Derby. Ruis later made headlines when he successfully filed a lawsuit that resulted in the winner of the 2018 Kentucky Derby, triple-crown champion Justify, being disqualified from an earlier victorious race in California.
In a matter unrelated to the charges Mick Ruis now faces, his son, Alvin McDonald Ruis III, recently went on trial for murder in San Diego Superior Court for allegedly killing his cellmate at the downtown San Diego Central Jail. Alvin Ruis III, who also goes by Mick, testified at trial that he tortured and killed Brandon Yates while in the throes of a psychotic break. The jury eventually deadlocked on the murder charge, and a judge declared a mistrial.
The elder Mick Ruis, who has said he was born and raised in El Cajon and has split much of his adult life between San Diego and Montana, reportedly made tens of millions of dollars selling his first scaffolding business before moving into horseracing. He was indicted alongside two co-defendants on federal charges of conspiracy to commit wire fraud and major fraud against the United States.
Ruis, Isaiah Levi Diehl and Shawn Peilun Huang allegedly conspired to use a scaffolding company owned by Huang that qualified as a small business to apply for and win contracts the Navy had specifically set aside for small businesses, but they allegedly planned all along to use larger companies to actually complete the work.
All three men pleaded not guilty to the charges during initial appearances earlier this month in U.S. District Court in San Diego.
"My only response at this time is that Mr. Ruis has only been given a copy of the indictment and has made an appearance in court in which a plea of not guilty has been entered," defense attorney Jan Ronis said Friday by phone. "Keeping in mind the American tradition that an indictment is not evidence, and a person charged is presumed to be innocent, it would be inappropriate to comment further in this very early stage of the proceedings."
Anthony Colombo Jr., Diehl's attorney, also emphasized his client is entitled to the presumption of innocence.
"It is important to note what the indictment does not allege — there are no allegations that any financial loss occurred," Colombo said in a statement. "The contracts were awarded and completed to satisfaction. Additionally, the indictment, although within the statute of limitations of five years, was filed right before the time expired. The staleness of the timing of the indictment casts doubt on the accuracy of the allegations."
David Wilson, the attorney representing Huang, said he and his client joined in the responses given by Ronis and Colombo.
According to the indictment, the three defendants engaged in two separate fraud schemes throughout parts of 2020 and 2021 involving contracts awarded by Navy Sea Systems Command, or NAVSEA.
The first scheme allegedly targeted NAVSEA's Southwest Regional Maintenance Center in San Diego and involved intermingling the names of two companies in order to confuse contracting personnel at the Southwest Regional Maintenance Center into awarding a contract to a company ineligible for that specific contract.
The indictment does not name the companies, but government records indicated one was Vertical Horizon Scaffold, which was allegedly a small business based in Santee owned by Huang that was eligible for certain contracts the Navy set aside for small businesses. Government records indicated the other company was called Vertical Horizon Marine. The indictment alleged Ruis was the majority owner of that second company.
The purported scheme, involving a contract with a ceiling of $17.6 million, was allegedly successful when government personnel in 2021 awarded the contract to Vertical Horizon Marine, which was not a small business eligible to win the contract, instead of Vertical Horizon Scaffold, the small business that initially bid on the contract.
The second, simpler scheme allegedly targeted NAVSEA's Southeast Regional Maintenance Center in Florida. The indictment alleged the conspirators again applied in the name of Huang's Vertical Horizon Scaffold for a contract set aside for small business that was worth up to $7 million. But this time, the defendants allegedly intended to simply win the contract using the small business and then complete the work using two larger companies that were ineligible.
The indictment did not name those companies, but government records showed they were Vertical Horizon Marine and American Scaffold. The indictment alleged that Ruis formerly owned the company identified as American Scaffold, and at the time was also working as a consultant for that company. Diehl was its CEO at the time, according to the indictment and government records.
American Scaffold, also known as AMSCAFF, was founded in San Diego and has been sold multiple times in the past decade. It is now part of a larger defense contracting company called Armada.
"Armada Parent and AMSCAFF have no knowledge of any of the wrongdoings raised in the indictment and/or any knowledge of any wrongdoings by the three individuals named in the indictment," Ralph Amezcua, the San Diego business unit leader for American Scaffold, said in a statement. "I can also state that Mr. Huang, Mr. Ruis and Mr. Diehl have not been employed with Armada or AMSCAFF or its affiliates for many years."
Amezcua said American Scaffold, which is now headquartered in Alabama, "continues to provide various services to the U.S. government in compliance with the (Federal Acquisition Regulation) and related government rules, regulations, and requirements."
The three defendants have all been released on their own recognizance and are due back in court for a procedural hearing next month.
