N.H. couple sue 3 in Arundel, alleging business idea theft

Current, former member of development agency, businessman named in suit

August 06, 1999|By Laura Sullivan and Matthew Mosk | Laura Sullivan and Matthew Mosk,SUN STAFF

A New Hampshire couple who had hoped to build a telecommunications empire are suing a current and a former board member of the Anne Arundel Economic Development Corp., alleging they stole the couple's business idea after giving them a loan.

Their lawsuit, filed yesterday in Anne Arundel County Circuit Court, asks for $15 million.

It charges that board President Jay Winer, former board member Charles F. Delavan and their business partner, Mark Sapperstein, fraudulently made a fortune off a business idea that George and Mary Chamberlain brought to the economic development corporation in June 1996.

A year later, the lawsuit says, Winer, Delavan and Sapperstein were running with the idea while the Chamberlains had defaulted on the loan they received from the corporation, lost their home and were mired in financial ruin.

FOR THE RECORD - Correction An article in Friday's Anne Arundel County edition incorrectly identified Charles F. Delavan as a defendant in a lawsuit stemming from a business dispute. Delavan's name appears in the suit only as the representative of a company being sued. The Sun regrets the error.

The lawsuit said that after approving the loan, Winer referred the couple to Sapperstein's company, West Shore Communications, never disclosing that he and Delavan were partners in the company.

Mark Sapperstein called the lawsuit baseless.

"We'll go through the process and clear our names just like we did before the [county] Ethics Commission," Sapperstein said yesterday. "We aren't using their business idea and we never have.

"The good thing about this is that he can spend his money in court and we can get to the bottom of this."

Winer and Delavan could not be reached for comment.

The lawsuit comes as the development corporation faces scrutiny for its small-business lending practices.

County Executive Janet S. Owens took control of the board recently, appointing three members (Delavan was not returned) after the board denied her access to their financial records.

Although the board is private, it is heavily supported with taxpayer dollars and is headed by a county employee.

William Voltz of Washington, the Chamberlains' attorney, said the development corporation might be added to the list of defendants.

William A. Badger Jr., interim director of the development corporation, said, "We are confident that our interaction with the [Chamberlains] was to the letter and proper, and I'm not going to comment on [the] lawsuit."

The lawsuit says the Chamberlains, who lived in Annapolis at the time but have since moved to New Hampshire, approached the development corporation in June 1996 with an idea to build a microwave link across Maryland that would improve cellular phone communications.

George Chamberlain, an engineer, and Mary Chamberlain, a marketing expert, put their house up for collateral on a $25,000 loan that Winer approved. They used that money to develop an intricate plan of microwave links and digital carriers. They presented those plans to Sapperstein, who told them the idea had no merit, the lawsuit says.

Voltz said he intends to prove that West Shore scrupulously followed that very plan -- funded by development corporation loan money.

"George Chamberlain wasn't a businessman or a lawyer," Voltz said. "He just had a great idea, and they took him for it."

Winer and Delavan had sold their shares of West Shore to Sapperstein by 1997.

Sapperstein sold West Shore and several other businesses to Pinnacle Towers, a Florida communications company, in May 1998 for $8 million.

Sapperstein told The Sun in February that the West Shore portion was worth $700,000.

George Chamberlain had raised several additional concerns before the Ethics Commission that were not presented in the lawsuit.

He asked why a development corporation president who approved a client's loan would be allowed to insert himself into the client's business plans unless he was using the position to speculate for promising business ideas.

The Ethics Commission never addressed that issue, but absolved Winer and Delavan of any wrongdoing.

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