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"On the last day, we saw Ace of Grace at the Axel Farm in Germany," Arnett testifies. "Pato just wanted to ride him. He was a flashy jumper, very quiet, well-mannered, and easy to ride. He was just like his father.

"It came up that he was available for sale."

Arnett decided to become Muente's investor. She ordered a presale medical examination, a vetting for which she paid about $3,000. She said she wanted to help Muente promote As Di Villagana, and buying Ace of Grace was a good way to do it; the young stallion would serve as a four-legged advertisement for the father. Arnett says she also thought she might make a nice profit reselling him in the United States.

Muente and Arnett flew home the next day. Arnett had enlisted her longtime veterinarian in Chapel Hill, North Carolina, to review the horse's x-rays. Dr. Jack Schuler voiced some serious concerns in a six-page report.

Ace of Grace had crooked legs.

Arnett had trepidations but went forward with the deal. After all, famed Grand Prix racehorse Royal Kaliber had crooked legs and still won medals at the 2004 Olympics.

Up until this point, Arnett had planned to buy Ace of Grace for Muente, but the x-ray concerns led to their decision to go halves, she says.

"We had started discussing buying the horse together," she says in court. "He would negotiate on the price; $60,000 was the total price. He would wire the money to Germany, and I would reimburse him $30,000.

"I don't like owning horses in partnership because it always ends in disaster," she adds. But she did it anyway. "I am an amateur [rider]. I do not have the time to put into training. [We decided] he'd train it, I'd pay the vet bills, care, showing fees, et cetera. I was sponsoring him. He was a trusted friend. It was a natural course. He was happy."

German veterinarian and horse broker Dr. Christian Müller-Ehrenberg, a longtime friend and business associate of Muente's, negotiated a purchase price of 25,000 euros with the horse's owner; he told Muente the actual price was 27,000 euros. The difference was Müller's commission. With the exchange rate, the total equaled about $32,000.

Muente wired the money to Müller, and Arnett wrote Muente a check for $30,000 — what she says she believed to be half of the purchase price.

Meanwhile, Muente paid about $3,000 to fly the horse home. It was quarantined at a U.S. Department of Agriculture farm in Maryland, a routine procedure. Then it went to Muente's stables in Virginia.

They took out a $60,000 insurance policy on the horse before it boarded its flight; Arnett paid for it. They registered him with the U.S. Equestrian Federation and changed his name, settling on As Di Bambino to identify him with his famous father.

The week they returned from Europe, Muente learned that Arnett's $30,000 check had bounced. Embarrassed and apologetic, Arnett immediately arranged to wire Muente's business account $30,006. The $6 was to cover his bank's returned-check fee, she says on the witness stand.

The pair rushed things to ensure that Bam Bam would be ready to show at that year's equestrian festival in Wellington, where Muente competes during the winter. Arnett crosses the country to the California desert horse-show circuit to avoid the snowfalls in the Northeast.

Arnett set up a joint checking account with Muente to cover Bam Bam's boarding and show fees. She gave him a second credit card on one of her business accounts in case of an emergency. And, she says, she told him what he could and couldn't use the money for. Soon, she says, she noticed unauthorized charges and checks to cover things like insurance and gear for other horses.

"I had an argument with Pato over the phone about what the charges were, why he was writing checks off our account," Arnett testifies. "And I still had no bill of sale. I became suspicious that this was not a $60,000 horse."

But then, Arnett fell ill and had to have surgery in California to treat endometriosis. Once she recovered, she hired a lawyer. By April, she had sued Muente in Culpeper County Court. A judge there had issued an order to put Bam Bam in protective custody while Arnett and Muente sorted out their differences.

When the local sheriff went to the Virginia showgrounds where Muente kept Bam Bam, Muente told him the horse was gone and would not be coming back anytime soon.

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Kelly Cramer

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