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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Spokane racetrack investors see first payoff after years

An aerial view shows Spokane Raceway Park in 1998. (Photo courtesy of Spokane Raceway Park / The Spokesman-Review)

Hundreds of investors in a busted Spokane racetrack company started 43 years ago by Orville Moe received long-awaited payouts last month for the first time.

The legal tangle that has played out for the past decade is far from over, but the $4.5 million worth of checks written to investors and the descendants of investors across the country is a significant development. And it comes as a judge has issued a warrant for Moe’s arrest for contempt of court.

Lawyers, accountants and others unraveled the finances of Moe’s businesses, including his Washington Motorsports Ltd., the partnership apparatus he used to attract hundreds of investors paying $500 to $1,000 each for a stake in his fledgling racetrack company in the early 1970s.

Moe’s investors never received a return on the collective $2.5 million they sank into the racetrack – even during successful racing years in the 1980s and the 1990s when Moe sold land adjacent to his Airway Heights raceway, Spokane Raceway Park, at a profit to the Kalispel Tribe.

They sued in 2003.

By June 2006, Moe had been fired amid mismanagement claims including the failure to keep an accurate roster of his investors.

Since then Moe’s business practices and problems have resulted in back-and-forth legal maneuvers including multiple lawsuits, criminal cases and bankruptcy.

The various cases are considered to be the most voluminous legal action in the history of Spokane Superior Court, said attorney Barry Davidson, who took over Moe’s racetrack business as a court-appointed receiver.

Some of those lawsuits initiated by Moe have been declared nuisance actions. One of the latest of his filings prompted the arrest warrant.

Moe could not be reached for comment.

Most of the money distributed to investors last month came from the $4 million sale of the racetrack to Spokane County more than six years ago.

The racetrack sale to Spokane County happened just months before the Great Recession crippled the economy and cut government spending and programs.

County commissioners came under intense scrutiny and criticism for the deal as private operators who signed contracts with the county to operate the racetrack have lost money.

The payouts to Moe’s investors came only after the county first collected about $350,000 earlier this year to settle its legal claim that there was undisclosed environmental contamination of racetrack property.

Other funds that are pooled for further payouts to investors include $2 million in court judgments against Moe and seized assets, including a $130,000 north Spokane rental property up for sale, attorney Aaron Goforth said. He has been involved in having Moe sanctioned and leading the efforts to uncover what is described in court filings as fraudulent transfers of millions more dollars.

For example, Moe is suspected of transferring about $1.2 million to his children and other family beginning in spring 2009.

Lawsuits have been filed that seek to return that money and collect more from Moe and his wife.

So far the disbursements have been better than once anticipated.

Davidson said the investors stand to receive more than double the amount of their initial investment – although the amounts are not adjusted to reflect the value of the dollar in, say, 1974 versus 2014.

Regardless, Davidson said, telling investors that they are receiving something that they had written off or forgotten about has been personally rewarding.

“Those are the calls we like to make,” he said. “It’s a pretty good feeling to get someone on the phone and say ‘Do you remember Washington Motorsports? Well, we have money for you.’ ”