ALBANY, N.Y. -- Four tellers at New York Racing Association thoroughbred tracks have been indicted for money laundering.

State Attorney General Eliot Spitzer said the four were involved in a scheme where they accepted small bills and gave back larger ones, taking a cut of 5 percent to 10 percent in the process. Converting small bills to big ones is a common technique of money laundering schemes because it is easier to smuggle more cash out of the country using big bills, Spitzer said.

"This was an elaborate scam in which the crowd, commotion and cash flow of the race track was used to conceal criminal activity," Spitzer said.

The laundering occurred at all three tracks operated by NYRA -- Belmont, Aqueduct and Saratoga, according to Spitzer's aides.

John Russo, a NYRA lawyer, said if the charges are true, the tellers were "bad seeds, and we don't want bad seeds handling our money." The NYRA as an organization is not part of a criminal investigation, Russo said.

"We run a clean game and our wagering pools are as free from tampering as they have been for the 46 years we've been in business," Russo said.

Arrested were Robert Lodati, 59, Robert Marshall, 60, and Joseph Rabito, 59. All three were in Saratoga County Jail on Thursday.

A fourth person was also indicted, but was not immediately identified because he or she has not been arrested.

The indictment alleges that the tellers laundered more than $300,000 during a six-month period.

Spitzer said the clerks were caught by undercover State Police investigators posing as drug dealers.