Valley of Lakes Racketeering Class Action against PNC Bank, N.A., et al.

(E) REAL ESTATE SCHEME

149. Commencing on or about September 30, 1986, and continuing through the present, the Defendants, FRANK M. CEDRONE, C.B.G. LIMITED, RALPH CONTE, ARLENE RAINESS, and other defendants, did knowingly and willfully devise an extortion scheme based on their control of the buying and selling of all real estate in the area known as "Valley of Lakes". Through this extortion scheme, defendant's were able to: (a) extort a percentage of the sales commissions from all real estate agents; (b) artificially lower the supply of property in the "Valley of Lakes" by preventing owners from selling their property themselves and by favoring the sale of CBG's own lots over the sale of lots of property owners who had no choice but to contract with CBG for the sale of their property; and (c) undertake numerous frauds by virtue of their control of the real estate market in the "Valley of Lakes" such as the two fraudulent schemes perpetrated on Plaintiff John Miele, discussed infra.

150. For the purpose of executing this extortion scheme, CBG harassed Real Estate Agents, and delayed and obstructed their passage in interstate commerce, through enforcement of CBG's rules and regulations which were established for this purpose. Paragraph 4, of Article XI of CBG's rules and regulations, (Exhibit 13-37) expressly mandates that:

"4. Any time any existing property owner or retained private real estate agent wishes to permit a prospective purchaser to visit and inspect a property or to showcase property to a prospective purchaser, notice shall be given to the administrative office of the Valley so that an authorized representative of the Developer can be present to escort any prospective purchasers and/or real estate agent during the inspection. Notice shall be given a full twenty-four (24) hours prior to the scheduled showcasing. Developer will assign a representative to attend the showcasing. It is the sole responsibility of the Owner or private real estate agent to ensure the necessary notice is conveyed to the Developer within the required time period. Under no circumstances shall a showcasing take place without an authorized representative of the Developer present."

151. For the purpose of executing this scheme, CBG established a "no for sale sign" rule, and strictly enforced it by having its "security guards" physically remove signs from owner's properties in order to prevent owners from selling property on their own, without the representation of CBG and other defendants, . See e.g., "Exhibit 13-21 and 13-37"

152. And as a specific part of this real estate scheme, commencing on or about Spring, 1988, RALPH CONTE, ARLENE RAINESS, CBG, FIRST EASTERN BANK as successor to Peoples First National Bank and Trust Company, and other defendants, did knowingly and willfully devise a scheme to defraud Plaintiff John Miele, a New Jersey Resident, of $10,000 by fraudulently representing that the house located on lot No. 19 on Plat A of "Valley of Lakes Development" was owned by Paul Mallone Associates, a close associate of CBG, and that he was asking $55,000 for the house, when in truth and fact the house was owned by Rocco F. Messina and Ingrid Messina, who were asking $45,000. As a result, John T. Miele paid $55,000 to Paul Mallone Associates, who contemporaneously purchased the house from Rocco F. Messina and Ingrid Messina. This fraud was only possible because of the complicity of FIRST EASTERN BANK as successor to Peoples First National Bank and Trust Company, and through the control exercised by CBG and RALPH CONTE over all of the real estate in the Valley of Lakes. Thomas Hawke, Jr., Vice President, Peoples First National Bank and Trust Company, One West Broad Street, Hazleton, Pennsylvania made this fraud possible.

153. And as a further part of this real estate scheme, commencing on or about Spring, 1988, RALPH CONTE, ARLENE RAINESS, and CBG, FIRST EASTERN BANK as successor to Peoples First National Bank and Trust Company, and other defendants, did knowingly and willfully devise a scheme to defraud Plaintiff John Miele, a New Jersey Resident, by fraudulently representing on the deed conveying lot No. 19 on Plat A of "Valley of Lakes Development" that ARLENE RAINESS was a co- owner with Plaintiff John Miele "as joint tenants with right of survivorship", when in truth and fact John Miele was led to believe that ARLENE RAINESS would help him by co-signing the mortgage application. The purpose of this scheme was for ARLENE RAINESS to defraud the heirs of John Miele of the house on lot No. 19 on Plat A of "Valley of Lakes Development" since John Miele was at the time, and is, a senior citizen with significant heart problems, which was known by defendants. Thomas Hawke, Jr., Vice President, Peoples First National Bank and Trust Company, One West Broad Street, Hazleton, Pennsylvania made this fraud possible.

154. ARLENE RAINESS and RALPH CONTE committed numerous violations of 18 U.S.C. 1952 by driving John Miele from New Jersey into Pennsylvania to execute these schemes to defraud John Miele; and violations of 18 U.S.C. 1341 and 18 U.S.C. 1343 in the course of closing the transactions, and covering up the fraud.

155. A copy of a Deed between Rocco F. Messina and Ingrid Messina, His Wife, both of Asbury Park, New Jersey, Grantors and Paul Malone Associates, Grantee, for Lot No. A-19, of "Valley of Lakes Development," recorded in the Office for the Recording of Deeds, County of Schuylkill, Pennsylvania, in Deed Book 1407, Page 715 to Page 717, on or about May 10, 1988, is annexed hereto and made a part of this complaint, and marked Exhibit 82-1 to 82-3.

156. A copy of a Deed between Paul Malone Associates, Grantor and John T. Miele and Arlene Rainess, both single individuals, "of 312 Rex Land Drive, Boonton, New Jersey, as joint tenants with right or survivorship," Grantees, for Lot No. A-19, of "Valley of Lakes Development," recorded in the Office for the Recording of Deeds, County of Schuylkill, Pennsylvania, in Deed Book 1407, Page 718 to Page 720, on or about May 10, 1988, is annexed hereto and made a part of this complaint, and marked Exhibit 83-1 to 83-3.

157. The mortgage entered into by FIRST EASTERN BANK as successor to Peoples First National Bank and Trust Company, between John Miele and Arlene Rainess as mortgagors was fraudulently induced.

158. A copy of the Mortgage between Arlene Rainess and John T. Miele, single individuals, residing at "312 Rex Land Drive, Booton," New Jersey, Mortgagors, and Peoples First National Bank and Trust Company, Mortgagee, dated May 5, 1988, and recorded in the Office for the Recording of Deeds, County of Schuylkill, Pennsylvania, in Mortgage Book 37V, Page 205 to Page 208, on or about May 10, 1988, is annexed hereto and made a part of this complaint, and marked Exhibit 84-1 to 84-4.

159. A copy of a letter, dated July 12, 1989, from Thomas Hawke, Jr., Vice President, Peoples First National Bank and Trust Company, addressed to Mr. Paul Malone, 1420 Roberts Avenue, Hazleton, Pennsylvania 18201 is annexed hereto and made a part of this complaint, and marked Exhibit 85.

160. A copy of a letter mailed as a group mailing, dated March 17, 1992, from Harry E. Filbert, Jr., Chief Executive Officer, Senior Vice President, Peoples First National Bank and Trust Company is annexed hereto and made a part of this complaint, and marked Exhibit 86.

161. A copy of an affidavit by John T. Miele executed on or about May 31, 1994 is annexed hereto and made a part of this complaint, and marked Exhibit 87.

162. A copy of a letter, dated June 10, 1993, from Robert W. Heck, Adjustment Department, First Eastern Bank, addressed to John T. Miele, PO Box 295, Nuremberg, PA 18241-0295 is annexed hereto and made a part of this complaint, and marked Exhibit 88.

163. A copy of a letter, dated June 24, 1993, from Robert W. Heck, Adjustment Department, First Eastern Bank, addressed to John T. Miele, PO Box 295, Nuremberg, PA 18241-0295 is annexed hereto and made a part of this complaint, and marked Exhibit 89.

164. A copy of a letter, dated July 6, 1993, from Jerry Scott, Assistant Cashier, First Eastern Bank, addressed to John T. Miele, PO Box 295, Nuremberg, PA 18241- 0295 is annexed hereto and made a part of this complaint, and marked Exhibit 90-1 to 90-2.

165. A copy of a letter, dated June 6, 1991, from Martin K. O'Dea, C & E Collection Services, 16 Chestnut Street, P.O. Box 299, Emerson, NJ 07630, addressed to John Miele, Box 295, Nuremberg, PA 18241 is annexed hereto and made a part of this complaint, and marked Exhibit 91.

166. A copy of two "Valley of Lakes" Visitor Pass is annexed hereto and made a part of this complaint, and marked Exhibit 92.

167. A copy of a letter, dated March 12, 1990, from Jayant Parmar, Chief Accounting Officer, on "Valley of Lakes and Eagle Rock Resort" letterhead, addressed to Mr. Miele is annexed hereto and made a part of this complaint, and marked Exhibit 93.

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