Closure recommended for raceway

Spokane Raceway Park should be closed and its general manager fired, court-appointed receiver Barry Davidson recommended Monday in a 45-page report.

Orville Moe, the public face behind the 600-acre drag strip, has given “misleading and false information” to more than 400 limited partners whose money helped build the facility, Davidson said in his report.

It now goes to Superior Court Judge Robert Austin, who appointed the receiver in early July to sort out claims of fraud and self-dealings by subsidiary companies controlled by Moe.

The judge is now expected to schedule a hearing, probably after Jan. 1, on the receiver’s report and future of the drag strip and race track complex in Airway Heights, west of Spokane.

The court could direct the receiver to hire an interim operator or could order the sale of the facility to satisfy claims of the limited partners who invested in Washington Motorsports, the parent company.

Those investors, in a lawsuit that led to the appointment of the receiver, contend they have seen no return on more than $2 million in stock they bought from Moe in the 1970s.

“I’m not surprised by this report,” said Troy Moe, Orville Moe’s nephew who has led the disgruntled limited partners. “It’s confirmation of the allegations we’ve brought forth in the court hearings over the past two years.”

Troy Moe said the report moves the limited partners one step closer to recovery of the money they invested three decades ago.

The investors, led by Don Materne and Ed Torrison, say Moe has told them their stock is worthless, but Moe and his daughter, Susan Ross, have bought back several shares at pennies on the dollar.

Moe controls Spokane Raceway Park Inc., which is the general partner in the race track operation.

Moe sold 40 acres of the race complex to the Kalispel Tribe, which built Northern Quest casino. He also leased another portion of the property to Inland Asphalt, which has removed 20,000 tons of gravel a year since 1994.

The receiver’s report said Inland Asphalt has paid Orville Moe $545,615 for the gravel removal, but the limited partners didn’t see any of that money, nor did they see profits from the sale of the land to the Kalispels.

Shortly after being named to take over operation of Spokane Raceway Park, Davidson said he ordered Moe removed from signatory authority on all Washington Motorsports bank accounts.

“Orville Moe, after the appointment of the receiver, promulgated misleading and false information to the limited partners,” Davidson said in his report.

Moe “has not demonstrated a willingness to work under the direction and supervision of the receiver,” the report said, and he “should be removed as general manager.”

“The operations of Spokane Raceway Park under the management of Orville Moe will not provide any meaningful (financial) distributions to the limited partners,” it said.

“Under the circumstances that now exist, there is no business justification for continued operation of (Spokane Raceway Park) during the receivership,” the report said.

Moe has refused to provide “essential” business records, including bank records, deposit slips, check registers and details about ticket sales and advertising, it said.

Moe’s claims of ownership of partnership units acquired from limited partners are in direct conflict with ownership claims of some limited partners, the report said.

Moe’s attorney, Robert Kovacevich, his wife, Deonne Moe, and daughter Sally Ross also claim ownership of shares acquired from limited partners who believed their stock was devalued.

But they have refused “to provide requested information and documentation to the receiver,” in violation of the law, and impeded the receiver from accomplishing duties mandated by the court, the report said.

As receiver, Davidson said he also requested information from the accounting firm LeMaster & Daniels, which handled accounts for Spokane Raceway Park and Moe and prepared annual tax reports.

“The partnership information that was provided to the receiver from LeMaster & Daniels was not accurate or complete,” the report said. Deficiencies “well-known to LeMaster & Daniel” were routinely listed as belonging to “missing” shareholders.

“Remarkably, certain of these (annual tax reports) contained fictional Social Security number, such as 123-45-6789,” the report said. “The tax reporting in the case of one limited partner resulted in the apparent issuance of a (tax report) to that partner in the amount of $3.3 million.”