Multimillionaire developer Mark Raymond Vogel, who was arrested last week on a cocaine charge, plans to relinquish day-to-day fiscal control of Rosecroft Raceway, the track's general manager said yesterday.
Meanwhile, court records show that Vogel owes the federal government more than $600,000 in income taxes, and that he is enmeshed in a tangle of financial difficulties that may threaten the future of his vast real estate and horse-racing empire.
James Murphy, Rosecroft's president and general manager, said he would assume daily control of the track's finances after a meeting between Maryland Racing Commission officials and Daniel Sandler, vice president and treasurer of Rosecroft. Vogel owns Rosecroft, in Oxon Hill, and Delmarva Downs in Ocean City, Md.
The meeting came as legislators and racing officials expressed renewed concern that Vogel might use funds from the racetracks to shore up faltering real estate projects.
"I think they would like to isolate the racetrack from Mark's other ventures," Murphy said. "Mark's still in control, but he's basically isolated the racetrack from his other businesses."
Because Vogel has not been actively involved in Rosecroft's operations since he bought the track in December 1987, Murphy said, the move will not disrupt day-to-day operations. State records show that the two tracks lost $1.2 million for the year ending Sept. 30, 1989.
Vogel, 42, a flamboyant real estate speculator, was arrested Thursday night in Fairfax County after an investigation by the U.S. Drug Enforcement Administration. Charged with possession of four grams of cocaine, which is worth about $400, Vogel was released on $10,000 bond and will plead not guilty to the felony charge, according to his attorney, Plato Cacheris.
Fairfax County prosecutor Robert Horan said Vogel's case is scheduled for a preliminary hearing Oct. 16. But he said details of the case, which was developed by the DEA without help from Fairfax County narcotics officers, remain sketchy.
Federal law enforcement sources say Vogel's arrest was the result of a six-month probe that has expanded into a broad investigation of drug use and political influence peddling by a group of prominent Prince George's County developers and lawyers.
While developing information on Vogel, the law enforcement sources say they also began exploring allegations of improper land transactions and zoning decisions involving the same group of individuals.
Vogel, a Prince George's native who built a fortune from shrewd real estate investments in county land, is the developer of the massive $400 million Bowie New Town Center and a limited partner in PortAmerica, a controversial project planned in Oxon Hill. In recent years, his real estate holdings have expanded into Virginia and Maryland's Eastern Shore.
His ownership of Rosecroft and Delmarva Downs has made him one of the most influential figures in Maryland's horse-racing industry. He also was a prime mover behind recent efforts to legalize off-track betting in the state.
His planned $17 million purchase of the Atlantic City Race Track, which was approved by the track's directors this spring, has been stalled indefinitely by Vogel's financial and legal difficulties. New Jersey racing officials, who learned of Vogel's arrest this week, say state police recently began an exhaustive investigation of Vogel's background and a drug conviction could damage his chances of securing an operating license.
Business associates say he recently negotiated with Saudi Arabian investors for a gigantic umbrella loan to cover his mounting real estate and racetrack debts.
Among his many debts, Vogel and his wife, Judith Ann, of Potomac, face a $606,485 IRS claim for unpaid 1988 taxes, according to Montgomery County court records. Last October, Vogel settled a similar IRS tax lien for $305,484.
Vogel also owes $724,446 to the Jefferson Bank for a delinquent loan, Prince George's County records show.
He recently reached an out-of-court settlement on a $700,000 lawsuit by a former business associate and faces a foreclosure sale next week on an ambitious Prince George's County development project, the Villages of Belmont, after he defaulted on a $4.3 million loan. A member of a real estate partnership from which Vogel purchased land in Crisfield, Md., last year said the developer has also missed payments on an $880,000 mortgage extended to him.
The State Racing Commission, which regulates racing in the state, has the authority to revoke or suspend Vogel's operating license.
Yesterday, state Sen. Edward J. Kasemeyer (D-Howard), who chairs a joint legislative committee that oversees racing, said, "I think we're getting ready to send in a team of people to really look at the operation," he said.
Horse owners have worried about tardy purse payments, which have been averaging 10 to 12 days rather than the usual five to seven days, said Charles Lockhart, executive vice president of the Cloverleaf Standardbred Owners Association.
"It has not gotten worse recently. That's been standard over the past year," Lockhart said. "Is that an indication there are financial problems? From that standpoint, we've had some concerns."Staff writers Patricia Davis, Robert F. Howe, Veronica T. Jennings, Debbie M. Price and Howard Schneider contributed to this report.