Two former stockholders in the defunct Marlboro racetrack yesterday sued suspended Maryland governor Marvin Mandel and seven associates for $15 million, charging that the men conspired to defraud them using political manipulations to depress the value of their stock temporarily.
In a civil action filed yesterday in Balitimore, two sons of one of the racetrack's founders, suing on their own behalf of their mother, alleged that Mandel and his associates depressed the value of the stock when the then-governor vetoed a bill that would have doubled the number of racing days at the track. Later, plaintiffs Michael patrick O'Hara and James Francis O'Hara charged, the defendants increased the stocks value by working to override the vetro after Mandels's associates had purchased the track. The political manipulations that increased the stock's value, however, came after the O'Hara had sold their stock, the suit said.
Mandel was convicted in U.S. District Court in August 1977, of using his office for personal profit in a corrupt scheme with five other men who were also named as defendants in the civil suit.
Those men, Irvin Kovens, Harrz W. Rodgers III, William A. Rodgers, W.Dale Hess and Ernest N. Cory Jr., were convicted with Mandel and face confiscation of property, including racetrack stock, If their convictions are upheld.
Also named as defendants in the civil suit filed yesterday were Mandel associates Irving (Tubby) Schwartz and Eugene Casey.
Prosecutors in the Mandel trial charged that the six men on trial had participated in a corrupt scheme with Mandel receiving hundreds of thousands of dollars worth of gifts in exchange for exercising his influence to help his friends by increasing the value of Marlboro, which they secretly owned.
According to the suit filed yesterday, that scheme not only defrauded the voters of Maryland, it also defrauded the former stockholders, who did not get full value for their stock. The former stockholders who filed the suit, the O'Hara brothers and their mother Josephine, had owned 26 2/3 percent of the racetrack's stock.
According to their attorney, the O'Hara sold their stock at $12 a share - for a total value of approximately $600,000 - in December 1971, after Mandel's veto of the bill that would have financially helped the track.