- Introduction
- Scheme to infiltrate and control "Valley of Lakes"
- Land Development Scheme
- Lake Algonquin Scheme
- Building Fees Scheme
- Real Estate Scheme
- Sewage System Schemes
- Arnold Palmer Golf Course Scheme
- Bank's scheme to conceal insolvency of CBG Ltd.
- Scheme to continue Racketeering using Chapter 11 Bankruptcy protection
- Bank's Scheme to operate and manage the Racketeering Enterprise
- Scheme to conceal Racketeering Activity prior to merger and to continue Pattern of Racketeering Indefinitely
- Enterpise
- Pattern of Unlawful Racketeering Activity
- Summary of each defendant's association with and participation in the pattern of Racketeering Activity
- Summary of each plaintiff's injury to Business or Property
- Count II: Interstate Land Sales Full Disclosure Act
- Count III: Civil Rights Violations
- Count IV: N.J. Real Estate Sales Full Disclosure Act
- Count V: Common Law Fraud and Deceit
(H) FIRST EASTERN BANK'S SCHEME TO CONCEAL INSOLVENCY OF CBG LTD.
194. As a further part of the land development scheme, commencing on or about November 13, 1990 and continuing until on or about March 30 1992, the Defendants, FRANK M. CEDRONE, C.B.G. LIMITED, FIRST EASTERN BANK, and other defendants, did knowingly and willfully devise a scheme and artifice to defraud lot owners and prospective lot owners in the subdivision by concealing the insolvency of CBG for the purpose of continuing the land development scheme. The defendants executed this scheme through numerous omissions of material fact, false and fraudulent pretenses, representations and promises relating to C.B.G.'s land development plan for the subdivision, to wit:
a. as a part of FIRST EASTERN BANK'S scheme to conceal the insolvency of CBG, FIRST EASTERN BANK permitted CBG to trade its lots for debt exchange. A copy of a Memorandum dated November 13, 1990, from Frank M. Cedrone, on "Valley of Lakes and Eagle Rock Resort" letterhead, to Dante Mattioni/John Mattioni is annexed hereto and made a part of this complaint, and marked Exhibit 111.
b. FIRST EASTERN BANK had acknowledge knowledge of CBG's insolvency. A copy of a Memorandum dated December 21, 1990, from Suzanne Litwhiler, on "Valley of Lakes and Eagle Rock Resort" letterhead, to Jay Parmar is annexed hereto and made a part of this complaint, and marked Exhibit 112.
c. as a part of FIRST EASTERN BANK's scheme, FIRST EASTERN BANK secretly subordinated all of its mortgages secured by the land in the "Valley of Lakes" owned by CBG to a $2,000,000 promissory note of one J.L. Wolgin, so that the sum of $1,300,000 would be paid to FIRST EASTERN BANK immediately to service its debt, and other sums would follow. A copy of a Promissory Note dated June 28, 1991, between CBG Ltd., Maker, and J.L. Wolgin, Payee, for the sum of $2 million is annexed hereto and made a part of this complaint, and marked Exhibit 113-1 to 113-14.
d. A copy of a memo dated July 2, 1991, from Jay Parmar, to Frank M. Cedrone, regarding "Equity in mortgage receivables financing," on letterhead reading "Valley of Lakes and Eagle Rock Resort" is annexed hereto and made a part of this complaint, and marked Exhibit 114-1 to 114-2.
e. A copy of a memo dated July 22, 1991, from Jayant H. Parmar, to Wayne F. Guidotti, regarding "Payroll check returned unpaid," on letterhead reading "Valley of Lakes and Eagle Rock Resort" is annexed hereto and made a part of this complaint, and marked Exhibit 114A-1 to 114A-2.
195. A copy of Averment of Default dated August 8, 1991, by J.L. Wolgin is annexed hereto and made a part of this complaint, and marked Exhibit 115-1 to 115-2.
196. A copy of a newspaper article titled "Stockholder charges First Eastern with mismanagement," by Chuck Gloman, Assistant Editor of the Standard-Speaker, published circa December, 1992, in the Hazleton Standard Speaker of Hazleton, Pennsylvania is annexed hereto and made a part of this complaint, and marked Exhibit 116.
197. As a result of FIRST EASTERN BANK's scheme to conceal the insolvency of CBG, numerous purchasers were defrauded by relying on the promises of CBG to complete the promised improvements. FIRST EASTERN BANK and CBG caused numerous mass mailings to be placed into the U.S. Postal Service in furtherance of this scheme. Among others:
a. A copy of a letter mailed as a group mailing sent to all property owners, on or about September, 1991, from Frank M. Cedrone, on "Valley of Lakes and Eagle Rock Resort" letterhead, is annexed hereto and made a part of this complaint, and marked Exhibit 117-1 to 117-2.
b. A copy of a letter mailed as a group mailing sent to all property owners, on or about November, 1991, from Frank M. Cedrone, Managing General Partner, on "Valley of Lakes and Eagle Rock Resort" letterhead, is annexed hereto and made a part of this complaint, and marked Exhibit 118-1 to 118-2.
198. A copy of a letter mailed as a group mailing sent to all property owners, on or about February 13, 1992, from Wayne F. Guidotti, Director of Operations, on "Valley of Lakes and Eagle Rock Resort" letterhead, is annexed hereto and made a part of this complaint, and marked Exhibit 119-1 to 119-2.
199. A copy of a letter dated January 28, 1992, from Robert M. Chasnow, Ingersoll and Block, 1401 Sixteenth Street, N.W., Washington, D.C. 20036, addressed to Mr. Robert K. Carter, Acting Chief, Bureau of Subdivided Land Sales Control, New Jersey Real Estate Commission, 20 West State Street, CN 328, Trenton, New Jersey, 08625-0328, is annexed hereto and made a part of this complaint, and marked Exhibit 120-1 to 120-2.
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