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According to published reports, subpoenas were issued yesterday (March 2) by the state’s Inspector General’s Office, which is working with the US Attorney’s office  as part of a federal investigation into the Aqueduct Racetrack.

Jay-Z, Russell Simmons and The Reverend Floyd Flake are expected to be among the first twelve served in the month long investigation which accuses Gov. Paterson of awarding the contract to AEG in order to gain political support from the company’s investors.

Jay-Z and Rev. Flake, who’s relationship with Gov. Paterson has come under fire over the past few weeks, are expected to explain how the multi-billion dollar deal actually transpired; although many are claiming Jay-Z and Flake’s group Aqueduct Entertainment Group (AEG) were awarded a contract to operate 4,000 video slot machines to the Aqueduct racino based on their relationship with Gov. Paterson.

As previously reported, Russell Simmons, who acted as an advisor for rival bidder Penn Gaming, lost the contract to AEG and felt the deal wasn’t “what was best for the people.”

Russell and other losing bidders claim that AEG offered the least money and financial details; they also claim AEG provided unrealistic financial projections according to competitor Delaware North.

AEG’s bid was about $200 million for the license, while other companies like Delaware North offered bids upwards of $300 million in addition to other incentives.

Flake who spoke out against the allegation states that:

“People should focus on the community development, rather than the personalities of people involved.

If the media frenzy drives the development process, then all of the good that could be borne out of this possibility will be precipitously lost.

From my 30-plus years as a developer in this community, I can tell you that media innuendo does not build projects; strong leaders and solid, well-financed ideas build projects.

Aqueduct has the potential to use racing as a Trojan horse -if you will- to deliver on a long-elusive and sustainable goal of a new private sector driver of the local economy. To a great extent this reality is part of the rationale for my involvement.”

We will continue to bring more on the story as it develops. Be sure to get the latest updates by following us on Twitter @hiphopwired.