"Unbridled Greed"

The Trial

Despite the circumstantial evidence and the MIT professor's conclusions, assistant U.S. attorneys Julia Tomala and James Powers knew they didn't have enough evidence to convict Lundy of killing Alydar. But they did have enough, they thought, to convict him of a host of financial shenanigans.

John T. Lundy (left) with his attorney
Joseph Buchanan

In March 1999, a federal grand jury in Texas indicted J.T. Lundy and former Calumet attorney and chief financial officer Gary Matthews for bank fraud, bribery, and conspiracy.

The trial began in January 2000. In presenting the government's case, Tomala and Powers gave the jury the details of a complex financial scheme that explained exactly why financially strapped Calumet Farm was able to get such huge loans from Frank Cihak, whom Tomala had already convicted and who was serving a 20-plus year sentence in federal prison.

The reason the farm got the loans was simple, the prosecutors argued. In exchange for making the loans to Calumet, Cihak got a $1 million kickback from Lundy and Matthews. In addition, Cihak, who fancied himself a horse breeder, was allowed to buy breeding rights worth $125,000 to one of Calumet's stallions for just one dollar.

Employing an unconventional defense strategy, Lundy's lawyer argued that his client was simply too stupid to pull off a multi-million dollar financial scam. But the jury didn't buy Lundy's "I'm-too-dumb" defense. After just two hours of deliberations, jurors found him and Matthews guilty.