- 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
(A) SCHEME TO INFILTRATE AND CONTROL THE AREA KNOWN AS "VALLEY OF LAKES"
50. Commencing on or about September 30, 1986, and continuing through the present, Defendant FRANK CEDRONE, FIRST EASTERN BANK, MLA, and other defendants, through a pattern of racketeering activity acquired control of the enterprise of illegally operating and managing High Vista's subdivision, named "Valley of Lakes", which had been defunct for approximately seven (7) years, in violation of 18 USC 1962 (b) ,(c) and (d). The defendants knowingly and willfully devised a scheme and artifice to defraud lot owners and prospective lot owners in the defunct subdivision through numerous false and fraudulent pretenses, representations and promises, among others:
a. representing, in numerous mass mailings, that CBG had bought the "Valley of Lakes", including all of the rights reserved to High Vista Inc. in the old abandoned, Covenants and Restrictions recorded by the old developer, when in truth and fact CBG was only a "purchaser" of land pursuant to the Covenants and Restrictions;
b. representing, in numerous mass mailings, that CBG had the right to collect the maintenance fees owed to Meridian Bank, which it had not collected during the entire seven years after High Vista had abandoned the property, when in truth and fact Meridian Bank did not collect the maintenance fees because it had no right to do so;
c. representing, in numerous mass mailings, that CBG had the right to collect maintenance fees, unilaterally set by CBG, based on the rights of High Vista in the old Covenants and Restrictions;
d. representing, in numerous mass mailings, that CBG had the right to install security check points at both entrances to the subdivision, and to allow only cars which were identified by CBG issued "stickers", evidencing payment of maintenance fees to CBG; and to force owners of property without such "stickers" to submit to a time consuming process of being inspected and receiving a "visitors pass" for each entry;
e. representing, in numerous mass mailings, that CBG had the right to permanently deny entrance to any person not a property owner.
f. representing, in numerous mass mailings, that CBG was taking control of the subdivision for the purpose of developing it into the "Premier Resort in the Northeast", including numerous improvements, discussed infra, when in truth and fact CBG intended to defraud unsuspecting purchasers of lots.
51. In furtherance of their scheme to infiltrate and maintain control the subdivision known as "Valley of Lakes", the defendants implemented numerous extortion schemes, commencing on or about September 30, 1986 and continuing to the present, which are executed by obstructing, delaying, and affecting commerce by stopping all vehicles at both entrances to the subdivision at security check points operated by CBG and MLA at both entrances; and allowing only cars which are identified by CBG issued "stickers", evidencing payment of maintenance fees to CBG; and to delay and obstruct other property owners by forcing them to submit to a time consuming process of being inspected and receiving a "visitor's pass" for each entry; and permanently denying entrance to any person not a property owner including law enforcement personnel such as the Pennsylvania State Police, local Sheriff's deputies, etc.; and denying entrance to all construction companies not approved by CBG; and delaying and obstructing entrance by real estate agents. The operation of these security check points permits the defendants to extort an illegal fee of approximately eight percent (8%) of the cost of construction, as discussed infra., and to control the real estate market within the "Valley of Lakes", and to extort similar fees from real estate agents wishing to do business within the "Valley of Lakes." Further, this extortion scheme is used by CBG, MLA, FIRST EASTERN to illegally enforce defendants control over all individuals living within the subdivision by threatening to declare any person who disobeys any of defendants "rules and regulations" or covenants and restrictions "an owner not in good standing" and thereby:
(a) denying them a "sticker" to enter without delay,
(b) denying them access to the common areas, and
(c) imposing fines on the said individuals. As part of its rules and regulations, and covenants and restrictions, in furtherance of its extortion schemes, CBG established a" Valley of Lakes disciplinary board" for the purpose of legitimizing fines.
52. For the purpose of executing the land development scheme, Defendants Frank Cedrone, CBG, FIRST EASTERN BANK, and other defendants, devised a fraudulent tradename, scheme, device, artifice to defraud, and/or representation by appropriating the old developer's tradename "Valley of Lakes" and its logo and using same for the purpose of holding themselves out as the legal successors to High Vista, Inc., with the right to enforce the covenants and restrictions recorded by High Vista Inc., and to market the same development plan, when in truth and fact the defendants only purchased the land, which had been foreclosed by High Vista Inc.'s mortgagee and no other right. Defendants caused to be mailed numerous letters through the U.S. Postal Service using this fraudulent device, as detailed infra.
53. CBG refused to recognize the Property Owners Association, and began a campaign of denying access to community areas to property owners sponsoring VOLCA events. In furtherance of this scheme to infiltrate and maintain control of the subdivision, CBG, FRANK CEDRONE, and other defendants made numerous misrepresentations in the "Property Reports" stating that a property owners association had not been formed, when in truth and fact an active property owners association had been formed and in existence since 1976. See e.g. , among numerous others, Exhibit 14-26, Exhibit 15-17 , Exhibit 16-10.
54. A copy of a letter from CBG Ltd., signed by Frank M. Cedrone, as Managing General Partner, addressed to "Valley of Lakes Property Owner," and mailed to all owners of property in the "Valley of Lakes" subdivision, circa November 15, 1986 is annexed hereto and made a part of this complaint, and marked Exhibit 5-1 to 5-3.
55. A copy of a Memorandum, dated December 12, 1986, from CBG Ltd., addressed to "All Property Owners" and mailed to all owners of property in the "Valley of Lakes" subdivision is annexed hereto and made a part of this complaint, and marked Exhibit 6-1 to 6-5.
56. A copy of a letter on letterhead reading "Valley of Lakes and Eagle Rock Resort," which was mailed to all owners of property in the "Valley of Lakes" subdivision, circa December, 1986 is annexed hereto and made a part of this complaint, and marked Exhibit 7.
57. A copy of a letter dated January 22, 1987, from Frank M. Cedrone, General Partner, addressed to "Property Owner," on letterhead reading "Valley of Lakes a C.B.G. Limited Development," and mailed to all owners of property in the "Valley of Lakes" subdivision is annexed hereto and made a part of this complaint, and marked Exhibit 8-1 to 8-3.
58. A copy of a letter on letterhead reading "Valley of Lakes and Eagle Rock Resort," titled "NOTICE TO ALL VALLEY OF LAKES PROPERTY OWNERS," and mailed to all owners of property in the "Valley of Lakes" subdivision, circa January, 1987 is annexed hereto and made a part of this complaint, and marked Exhibit 9.
59. A copy of the "DECLARATION OF AMENDMENTS TO DECLARATION OF EXCEPTIONS, RESERVATIONS, COVENANTS, RESTRICTIONS AND CONDITIONS FOR THE VALLEY OF LAKES DEVELOPMENT," recorded by Frank M. Cedrone, General Partner, on behalf of C.B.G. Limited on or about January 30, 1987, in the Office of Recorder of Deeds for Schuylkill County in Miscellaneous Book 249, Pages 885 to 902 is annexed hereto and made a part of this complaint, and marked Exhibit 10-1 to 10-18. These Covenants and Restrictions are a fraudulent device used to commit numerous extortion schemes, and were fraudulently recorded. CBG had no right to unilaterally control the entire subdivision or to collect maintenance fees based on these covenants and restrictions, particularly since an active property owner's association, VOLCA, had been in existence for ten (10) years prior to CBG buying property in the subdivision.
60. CBG 's EXEMPTED itself from paying maintenance fees on lots it owned, and on lots owned by friends and associates. See e.g., Exhibit 14-10. 61. A copy of the Building Code of CBG Ltd., dated December 1, 1986, prepared by Management of Valley of Lakes, Architectural Control Committee is annexed hereto and made a part of this complaint, and marked Exhibit 11-1 to 11-12.
62. A copy of a Memorandum dated June 24, 1987, signed by Frank M. Cedrone, Managing General Partner, addressed to "All Valley of Lakes Residents/Property Owners," and mailed to all owners of property in the "Valley of Lakes" subdivision is annexed hereto and made a part of this complaint, and marked Exhibit 12-1 to 12-2.
63. A copy of CBG Ltd.'s "Rules and Regulations," adopted circa January, 1987 is annexed hereto and made a part of this complaint, and marked Exhibit 13-1 to 13-44.
------------------