Judge set to hear more testimony in Raceway suit

The legal battle over control of Spokane Raceway Park returns to the courtroom today when a judge resumes a hearing to consider appointing someone to oversee the motor racing facility.

Attorneys for a group of angry investors and the lawyer defending Raceway Park operator Orville Moe say they need another four days in court to wrap up testimony from witnesses and present arguments before resting their case with Superior Court Judge Robert Austin.

At the conclusion, the judge is expected to decide whether to appoint a receiver to assume control of day-to-day operations and financial holdings of the race track in Airway Heights, as the investors sought in a lawsuit they filed in October 2003.

The judge had set aside four days this week and testimony was expected to conclude on Thursday.

But last week, the judge notified attorneys that a criminal case will occupy his court time on Wednesday and Thursday, taking precedent over the civil suit brought by the shareholders.

Austin hasn’t assigned dates for the final days of testimony.

In at least eight days of testimony spread out over the last six months, witnesses have described financial and bookkeeping irregularities at the race track, including nonpayment of certain employee taxes.

Moe, a legend in drag strip and oval track racing circles, is vigorously opposing the attempt by investors, who are limited partners, to shove him out.

The 67-year-old businessman controls Spokane Raceway Park Inc., which is the general partner with Washington Motorsports Inc., which owns the track.

The limited partners contend Moe is using general partnership funds, which includes profits from track operations, to wage his legal fight against them.

The drag strip and oval track complex was built in the 1970s on a square mile of land originally purchased by Moe’s father.

To help build and finance the track, about $2.5 million in stock was sold to an estimated 500 investors – many of them racing enthusiasts living in the Spokane area – who became limited partners in Washington Motorsports.

In their suit seeking a court-appointed receiver, the limited partners accuse Moe of fraud, criminal profiteering and evasion of state and federal taxes.

They have built their case in part around the expert testimony of Nathan Transeth, a forensic accountant who once worked for the FBI and the U.S. Office of Inspector General.

At an earlier hearing, the expert testified that business records supplied by Moe show he has paid employees in cash “under the table” and failed to fill out state and federal employment forms.

Moe also engaged in “self-dealing” by directing race track concession, souvenir, video and advertising business to subsidiary companies he controls that provide services at the raceway, the expert testified.

Moe denies wrongdoing, but couldn’t answer several questions put to him on the witness stand during earlier hearings.

When asked to explain a $182,500 “consulting fee” he claimed on a federal income tax return, Moe said that question should be directed to Larry Wyatt, an accountant who has prepared the tax returns and financial statements for Spokane Raceway Park.

The consulting fee did not show up as a payment on expense ledgers provided by Moe and his accounting team.

Moe is expected to be back on the stand today, followed by Wyatt, a senior partner at the accounting firm of LeMasters & Daniels, which prepared tax returns and financial reports for Spokane Raceway Park and the various subsidiary companies that Moe controls.