• 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

120. As a further part of the land development scheme, Commencing on or about September 30, 1986, and continuing through the present, the Defendants, FRANK M. CEDRONE, C.B.G. LIMITED, FIRST EASTERN BANK, N.A., RALPH CONTE, and other defendants, did knowingly and willfully devise a scheme and artifice to defraud prospective lot owners of "lakefront property" through numerous false and fraudulent pretenses, representations and promises that CBG would complete a proposed lake on a designated site, known as "Lake Algonquin", when in truth and fact the defendants knew that no such lake would ever be completed. Numerous mis-representations, material omissions, etc., were made in the "Property Reports", print advertisements, contracts, etc. This scheme to sell "lakefront property" with no lake was patterned on High Vista Inc.'s scheme to sell "lakefront property" using the same site, and name. See Exhibit 3.

121. In furtherance of the "Lake Algonquin Scheme," CBG entered into numerous investment contracts for lots adjacent to the proposed lake, Lake Algonquin, in which it guaranteed a rate of return of 12.5% Per annum, in violation of the Federal Securities Laws, and CBG breached these contracts. Among numerous others: See Exhibits 28, 29, 30.

122. A copy of a letter dated August 12, 1988, from Frank M. Cedrone, Managing General Partner, addressed to "Edward and Justine Dionne, 1124 Myrtle Road, Walnutport, PA 18088," on "Valley of Lakes and Eagle Rock Resort" letterhead is annexed hereto and made a part of this complaint, and marked Exhibit 60.

123. A copy of a letter dated December 15, 1988, from Frank M. Cedrone, Managing General Partner, addressed to "Mr. & Mrs. Carl Teschke, 1532 Rahway Avenue, Westfield, NJ 07090," on "Valley of Lakes and Eagle Rock Resort" letterhead is annexed hereto and made a part of this complaint, and marked Exhibit 61.

124. A copy of a letter dated February 12, 1990, from Randy A. Galgon, Valley of Lakes Civil Association, to Joseph Ellam, Bureau of Dam Safety, P.O. Box 2357, Harrisburg, PA 17120-2357 is annexed hereto and made a part of this complaint, and marked Exhibit 62.

125. A copy of a letter dated February 21, 1990, from Joseph Ellam, P.E., Chief, Division of Dam Safety, Pennsylvania Department of Environmental Resources, addressed to Randy A. Galgon, Valley of Lakes Civic Association, P.O. Box 150, Oneida, PA 18242 is annexed hereto and made a part of this complaint, and marked Exhibit 63.

126. A copy of a letter dated November 29, 1990, from Randy A. Galgon, Valley of Lakes Civil Association, to Joseph Ellam, Bureau of Dam Safety, P.O. Box 2357, Harrisburg, PA 17120-2357 is annexed hereto and made a part of this complaint, and marked Exhibit 64.

127. A copy of a letter from The Valley of Lakes Civic Association (VOLCA), to Section "E" and "EA" property owners, dated October 24, 1990, is annexed hereto and made a part of this complaint, and marked Exhibit 65.

128. A copy of a Memorandum dated November 1, 1990, from Frank M. Cedrone, on "Valley of Lakes and Eagle Rock Resort" letterhead, with enclosures: (1) A Memo dated October 31, 1990, from William J. Schumacher, Jr., P.E., Schumacher Engineering, Inc., P.O. Box 654, Hazleton, PA 18201, to Mr. Frank Cedrone, CBG, Limited, Valley of Lakes, P.O. Box 2039, Hazleton, PA 19201, titled "Progress Report Lake Algonquin;" (2) A letter dated November 2, 1990, from Russell I. James, President/Aquatic Biologist, Ecoscience, Rd. 4, Box 4294, Moscow, PA 18444, to Mr. Frank Cedrone, C.B.G. Limited, titled "Re: Status Report on Joint Permit Application Process and Wetland Issue(s)" is annexed hereto and made a part of this complaint, and marked Exhibit 66-1 to 66-4.

129. A copy of a Memorandum dated November, 1991, from William J. Schumacher, Jr., P.E., Schumacher Engineering, Inc., P.O. Box 654, Hazleton, PA 18201, which was sent to all owners of property in the "Valley of Lakes" subdivision by CBG, Ltd. is annexed hereto and made a part of this complaint, and marked Exhibit 67.

130. A copy of a letter from Louis Scaduto and Sandra Scaduto, of 1719 New Hampshire Ave., Toms River, N.J. 08753, addressed to "Fellow Property Owner," sent to VOLCA is annexed hereto and made a part of this complaint, and marked Exhibit 68.

131. A copy of a letter dated February 14, 1992, from Ray Dongelewicz, President, VOLCA, P.O. Box 150, Oneida, PA 18242, to Joseph Ellam, Bureau of Dams, Commonwealth of Pennsylvania, DER, P.O. Box 2357, Harrisburg, PA 17120- 2357 is annexed hereto and made a part of this complaint, and marked Exhibit 69.

132. A copy of a letter from Donald Martino, P.E., Acting Chief, Division of Dam Safety, Commonwealth of Pennsylvania, Department of Environmental Resources, Post Office Box 8554, Harrisburg, Pennsylvania 17105-8554, addressed to Ray Dongelewicz, President, Valley of Lakes Civic Association, Post Office Box 150, Oneida, PA 18242, received on March 17, 1992, is annexed hereto and made a part of this complaint, and marked Exhibit 70.

133. A copy of a letter from Steven M. Johns, Ph.D., Certified Senior Ecologist, Manager, Ecological Services, BCM Engineers Inc., One Plymouth Meeting, Plymouth Meeting, PA 19462, dated July 27, 1992, addressed to Mr. J. Edward Wagner, 400 Evansburg Road, Collegeville, PA 19426 is annexed hereto and made a part of this complaint, and marked Exhibit 71-1 to 71-3.

134. In furtherance of the "Lake Algonquin Scheme," CBG made numerous misrepresentations and material omission including the percentage of the project that had already been completed in the numerous "Property Reports." See Exhibit 14.

135. FIRST EASTERN BANK continued to grant mortgages to purchasers, expecting Lake Algonquin to be built, well after CBG had defaulted on its completion dates promised in the "Property Reports" and after FIRST EASTERN BANK knew that CBG was insolvent. FIRST EASTERN BANK undertook this fraud upon these purchasers in order to be paid the money from CBG that it, FIRST EASTERN BANK, received from these purchasers for a release from FIRST EASTERN BANK's underlying mortgage. In doing so, FIRST EASTERN BANK committed numerous acts of, inter alia, 18 U.S.C. 1341, 18 USC 1343, and fraud in the sale of securities by violating Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

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