The Anden Group has brought an $8 million lawsuit alleging fraud and conspiracy by the former head of the California-based firm's office here in the development of Cameron Knolls, an Alexandria town house subdivision.

The complaint, filed last week in U.S. District Court in Alexandria, charges that former Anden division president Ray F. Smith Jr. improperly diverted the Cameron Knolls project to a second development company while still employed by Anden.

The 97-unit project at 3968 Duke St. is being developed by Sequoia Building Corp., a Fairfax County firm owned by Smith and codefendants Herbert N. Morgan, president of Real Title Co. Inc., and Morgan's son Mark, according to the complaint. Herbert Morgan is a former Republican delegate to the Virginia statehouse.

Attorney David Fisk, representing Smith, the Morgans and Sequoia, last week characterized the complaint as "ill-founded" and said a countercomplaint is under consideration.

Anden, the developer of the Wingate and Court Bridge subdivisions in Arlington, contends that Smith's alleged actions were a breach of his duties as a company officer and a violation of a U.S. racketeering law originally aimed at organized crime.

Use of the racketeering statute to attempt to recover civil damages is a rarity in the U.S. 4th Circuit, which includes Virginia, Anden's attorneys said.

According to the complaint, Smith, acting on Anden's behalf, considered purchasing the 5.4-acre tract, then known as Strawberry Hill, early in 1980. Smith later "abruptly terminated" discussions with the sellers in a meeting that "was over in five minutes," the complaint said.

Based on Smith's advice, Anden said it withdrew from consideration of the tract. Later that year and in early 1981, another codefendant, K. Roger Moore, with financial aid from Smith, purchased the right to buy the property, the suit alleges.

According to the complaint, Smith and the Morgans formed Sequoia Building Corp. in April of last year without Anden's knowledge and, two months later, Moore sold the Strawberry Hill option to Herbert Morgan for $110,000. The option was transferred to Sequoia in June, one month before Smith quit his job at Anden and moved to Sequoia, the complaint said.

Anden said Sequoia's profits from the Cameron Knolls development will be an estimated $1.6 million.