The news comes a week after NYRA gained the support of Gov. Eliot Spitzer to hold onto the lucrative state franchise to run the Aqueduct, Belmont and Saratoga thoroughbred tracks for up to 30 years. Spitzer also proposes a state bailout of NYRA's debts that could exceed $200 million.

A state Senate committee is scheduled to consider Spitzer's recommendation in a hearing on Wednesday. The franchise, which NYRA has held since 1955, expires Dec. 31.

"They still owe $1 million, but they did declare bankruptcy," said Robert Nardoza, spokesman for the federal attorney for the Eastern District of New York. The debt was first reported in the New York Daily News Tuesday.

Nardoza said the federal prosecution couldn't be reopened even if the total $3 million in restitution isn't fully paid because the indictment was dismissed as part of a deal that included management and other reforms at NYRA. Now, the federal government is one of NYRA's creditors awaiting payment or partial payment of debts.

Nardoza said about $2 million was paid before NYRA sought U.S. Bankruptcy Court protection from its creditors as it reorganized under new management. NYRA that had been dogged for years by state and federal investigations into its management and compensation of top officers.

A federal conviction could have dissolved NYRA.

The $3 million restitution was to cover fines and the cost of the investigation. Federal and state officials -- including Spitzer as attorney general -- were investigating corruption, mismanagement, tax evasion, money laundering and other allegations.

There was no immediate comment from NYRA or Neil Getnick, the court-appointed federal monitor who helped secure the agreement for NYRA to avoid prosecution. His law firm, Getnick & Getnick, has been hired by NYRA as its counsel to assure business integrity, a major factor considered by Spitzer in evaluating NYRA and three other competitors for the franchise.

NYRA has said its fiscal problems were mostly the result of its failure to compete with rising forms of gambling including casinos and lotteries. The new franchise, however, will include revenue from video slot machines.