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Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: exhibits

Valley of Lakes Letterhead

April 6, 1993

Mr. James M. Sysko
Agent Supervisor
Office of Attorney General
Bureau of Consumer Protection
Commonwealth of Pennsylvania
Scranton Regional Office
214 Samters Building
101 Penn Avenue
Scranton PA 18503-2025

RE:	George Morris
Your File No. E93-0652

Dear Mr. Sysko:

Reference is made to your letter of March 12, 1993, relative to a 
complaint registered by the above cited individual.

Mr. Morris' first statement, that he could not use a builder of his 
choice is not true.  C.B.G. Limited's Sales Department personnel will
not recommend a builder to any prospective purchaser unless the builder 
has achieved "Preferred Builder Status".  In order to achieve a 
"Preferred Builder Status", the builder must first complete an 
application, listing among other things, his bank of account, at least 
three trade references and a minimum of three homes that he has 
constructed in the past that are at least one year old.  C.B.G. receives 
permission from the builder to verify his financial status and banking 
experiences, his-pu@cliases and payment record with suppliers and 
customer satisfaction with construction performed.  Assuming the builder 
satisfactorily passes this examination, he is required to enter into an 
agreement with C.B.G. that calls for strict compliance with our Building 
and Safety Codes, Rules and Regulations and Covenants and Restrictions, 
all of which are recorded , run with the land, are included on every lot 
purchase agreement and the recorded deeds to the property.

All of these procedures are community and property owner beneficial, and 
protective in nature.  For example, builders agree to comply with the 
BOCA Code (11th edition), National Electric Code, National Plumbing Code 
and all local codes and ordinances.  Builders must include a Ten Year 
Home Owner's or Home Buyer's Warranty Insurance Plan, (adopted after the 
Morris' purchased) utilize only plans prepared by a registered Pennsylvania 
Architect and provide the following certifications for home buyer's protection:

April 6. 1993
Mr. James M. Sysko
Page 2

	1.  Certificate of Architect attesting to proper and safe 
	2.  Certificate of Accredited Fire Underwriter attesting to proper 
	    installation of service, vliriyig and all final connections.

	3.  Certificate of Compliance from plumbing, heating and air 
	    conditioning contractors.

	4.  Certificate of Compliance from alarm system installer.

	5.  Certificate of Occupancy from C.B..G's Architectural Control
	    Committee, which is chaired by a registered architect 
	    (independent of C.B.G.)

	6.  Agree to four stages of inspection, i.e. at stakeout of home 
	    prior to breakground; after excavation and construction of 
	    foundation (before backfilling); when under roof, at roughin 
	    and when completed.

Mr. Morris, a former Ozone Park, New York resident, purchased a resale 
lot from the prior owners, (Arizona residents) utilizing the services of 
a Hazleton Real Estate broker.  It was a fact in this particular case 
that the Hazleton broker personally recommended the builder selected by 
Mr. Morris, who happened to be a Preferred Builder in the Valley of Lakes.

In answer to Mr Morris' claims that he could not use a builder of choice, 
I will cite three cases disproving his statement.  In the first case, a 
property owner requested the right to use a contractor that C.B.G. would 
not grant preferred builder status, being of unfavorable background 

When the property owner insisted, C.B.G. agreed providing we were 
relieved of any responsibility for the builder's performance.  The 
builder promptly went bankrupt leaving substantial unpaid bills and an 
incomplete construction.

In the second case, a longtime property owner who lived in the Valley, 
had a son whom he claimed had limited capital and wished to serve as his 
own general contractor, utilizing the services of known and qualified 
sub-contractors and performing some of the work himself.  They assumed 
full responsibility, agreed to comply with all requirements, made 
revisions requested and have performed well to date.

April 6, 1993
Mr. James M. Sysko
Page 3

In the case of a third property owner who utilized sub-contractors and
had a relative serve as supervisor, more than $45,000 in damage was 
incurred when improperly installed and un-insulated plumbing froze up 
during severe weather, burst and flooded the still incomolete
construction.  C.B.G.'s use of Preferred Builders prevents such catastrophes.

Mr. Morris' statement that C.B.G. added "an additional 8%" to the cost 
of his home is also untrue.  Preferred Builders have the "option" of 
entering into a marketing agreement with C.B.G.'s Real Estate Sales 
Department.  C.B.G. then advertises the builder and his products, 
promotes the property on radio and television, through direct mail and 
magazine advertising, enters trade shows and conventions and produces 
prospects for sales.  Requests for home designs and prices are 
distributed to our builders for quotes and C.B.G. consummates the 
contract.  In addition, C.B.G. assists in mortgage applications 
preparation, change orders, communication back and forth between 
builders, purchasers, lenders, credit agencies, Architectural Control 
Committee and a host of other services.  Out of the 8% commission 
charged the builder, C.B.G. pays commissions to on-site sales and sales 
management personnel, outside broker agencies who become involved, sales 
administrative personnel, all advertising and promotional costs and a 
contribution to road maintenance and repairs.  Since much heavy 
equipment is involved with home construction, constant upkeep is 
required.  Without C.B.G's voluntary subsidy, Community Road 
Maintenance Fees charged all property owners would require dramatic 
increases.  Unless a builder pays for and handles his own marketing, a 
commission agent is employed.  This becomes a part of the cost of the 

Mr. Morris' statement that he received "nothing" and had no assistance 
from C.B.G.'s housing department is also untrue.  No less than four (4) 
Housing Department sales and sales management personnel and a variety of
office personnel attended to the needs of Mr. Morris during the entire 
length of his construction, as well as before and after completion. 
(Please the attachments submitted in proof) Approximately 18 
months of service.

Mr. Morris' statement that they went out on their own to pick out 
appliances and cabinets is probably true.  If customers do not wish to 
make their selections from catalogues, and/or existing models, we refer 
them to local stores and/or supply houses who display their wares.  C.B.G. 
does not provide limousine service to and from department stores and/or 
suppliers.  Nor do we provide an escort. We know of no other developer 
who does.

April 6, 1993
Mr. James M. Sysko
Page 4

This detailed explanation should satisfactorily answer Mr. Morris'
final question, i.e. "What was the 8% commission for"?  This explanation 
should also make him aware of the reasons why property values in the 
Valley of Lakes have appreciated far more dramatically then those in the 
surrounding area.

An objective person, reading this narrative and the support material, 
could ask the following questions:

1.  If an objection occurred at the time of contract, why did the 
    Morris' enter into the agreement?

2.  Why did the Morris' not select another builder as their friends had 

3.  Finally, why wait three (3) years to register an objection or even 
    ask the question?

I trust my letter is completely responsive to your request.  Thank you 
for allowing me the opportunity of providing our side of the story.



Frank M. Cedrone
Managing General Partner

Valley of Lakes RICO Class Action against PNCBANK, et al.

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