Aileen Brown Et Al Filed Orig Complaint 12 12 07

5/13/2018 Aileen Brown Et Al Filed Orig Complaint 12 12 07

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF TEXASHOUSTON DIVISIONAILEEN BROWN, TERRY CHARLES, ROY CULBERSON, KNOLLIE DAVIS, LUEVERTA DAVIS, HENRY GREEN, HENRY ANDBEVERLY HARRIS, KASHIF A HARRIS, JERRY JOHNSON AYOOLA OGUNBIYI, REGINALD POLLARD, KERON RICHARDS, VALERIE SHARP, and DAVIDWILLIAMS PLAINTIFFS vs

US HOME CORPORATION (a Delaware Corporation), NORTH AMERICAN TITLE GROUP, INC. (a Florida Corporation) VIP REALTY OF BONITA SPRINGS, LLC (a Florida Limited Liability Company) BANYANTITLE OF FLORIDA, LLC (a Florida Limited Liability Company) CIVIL ACTION NO. 4:07-cv-03427BENCHMARK FLORIDA MORTGAGE CORPORATION (a Florida Corporation) d/bla Breeze Mortgage DENNIS ALLISON, Individually and D/B/A PROFESSIONAL APPRAISAL SERVICES OF SOUTHWEST FLORIDA, INC. (a Florida Corporation) JOHN A. LENTZ, JR. Individually and DIBIA LENTZ APPRAISAL GROUP, INC. (a Florida Corporation) 2 BABUSINESS SYSTEMS, LLC (a Texas Limited Liability Company) PREMIER MORTGAGE FUNING, INC. (a Florida Corporation) TOWER CITY TITLE AGENCY, LLC (an Ohio Limited Liability Company) JOHN A. SOLAKIAN, and EDWARD L. WADDELL DEFENDANTS

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PLAINTIFFFS' ORIGINAL COMPLAINTTO THE HONORABLE JUDGE OF THE UNITED STATES DISTRICT COURT:

COM ES NOW PLAINTIFFS, AILEEN BROWN, TERRY CHARLES, ROYCULBERSON, KNOLLIE DAVIS, LUEVERTA DAVIS, HENRY GREEN, HENRY ANDBEVERLY HARRIS, KASIDFA HARRIS, JERRY JOHNSON, AYOOLA OGUNBM~REGINALD POLLARD, KERON RICHARDS, VALERIE SHARP, and DAVIDWILLIAMS and files this Plaintiffs' Original Complaint alleging as follows:

A. PARTIES1.2.3 .4 .

Texas.5 .

Texas.6.7 .

Plaintiff, AILEEN BROWN, is an individual who resides in Lizella. Georgia.Plaintiff, TERRY CHARLES, is an individual who resides in Houston, Texas.Plaintiff, ROY CULBERSON, is an individual who resides inDallas, Texas.Plaintiff, KNOLLIE DAVIS, is an individual who resides in Missouri City,

Plaintiff, LUEVERT A DAVIS, is an individual who resides in Missouri City.

Plaintiff, HENRY GREEN, is an individual who resides inHouston, Texas.Plaintiffs, HENRY AND BEVERLY HARRIS, are married individual who

resides in L a P lace , L ouisian a.8. Plaintiff, KASHIFA HARRIS, is an individual who resides in Smyrna, Georgia.9. Plaintiff, JERRY JOHNSON, is an individual who resides in Houston, Texas.10. Plaintiff, AYOOLA OGUNBIYI, is an individual who resides in Houston,

Texas.11. Plaintiff, REGINALD POLLARD, is an individual who resides in Birmingham,

Alabama.12. Plaintiff. KERON RICHARDS, is an individual who resides in Houston, Texas.13. Plaintiff. VALERIE SHARP, is an individual who resides in Pleasant Grove,

Alabama.14. Plaintiff, DAVID WILLIAMS, is an individual who resides inHouston, Texas.15. Defendant, US HOME CORPORATION, upon information and beliefis a

De laware co rpo ra ti on that is a w holly ow ned subsidiary of L ennar Corporation s in c e Februa ry 17,2


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2000. U S Hom e Corporation m ay be served by serving its re giste re d ag en t T he C orpo ratio n T rustCompany, Corporation T rust C enter, 1209 O range Street, W ilm ington. D E 19801.

16. Defendant, NORTH AMERICAN TITLE GROUP,INC., UPON informationan d be lie f is a F lo rid a c orp oratio n that is a w holly ow ned subsidiary ofLennar C orporation. N orthA merican Title G roup, Inc. m ay be served through its registered agent C T CORPO RA nONSY STEM , 1200 South Pine Island Road, P lant at io n, F lo ri da 33324.

17. Defendant, VIP REAL TV OF BONITA SPRINGS, INC., ("VIP Realty") uponin fo rma tio n a nd belief is a F lo rid a lim ite d liability company and m ay be served through itsregistered agent, Charles C. A shby, 13131 University Drive, Ft . Myers F lo rid a 3 39 07 .

18. Defendant, BANYAN TITLE OF FLORID~ LLC, upon inform ation and beliefis a Florida limited liability com pany and m ay be served through its registered a ge nt, S an dr aPastoor, 5651 Naples Boulevard, Naples. Florida 34109.

19 . Defendant, BENCHMARK FLORIDA MORTGAGE CORPORATION,INC ( '"Benchmark or Breeze") is a Florida corporation that also does business as BREEZEMORTGAGE. It may be served through its registered agent Heather Pastoor, 11012 N.W. 181 hCourt, Gainesville. Florida or by serving its principal officer and Dire cto r, G eorg e Pastoor at8970 Fontana De Sol Way. #2, Naples, Florida 34109.

20. Defendant, DENNIS ALLISON, Individually and D/B/A PROFESSIONALAPPRAISAL SERVICES OF SOUTHWEST FLORIDA. INC. is an individual who performsresidential appraisals under the nam e of the aforem entioned Florida corporation and may beserved individually and as the corporate registered agent as Dennis Allison, 12820 KenwoodLane #1, Ft. Myers. Florida 33907.

21. Defendant. JOHN A. LENTZ, JR. Individually and D/B/A LENTZAPPRAISAL GROUP, INC. is an individual who performs residential appraisals under thenam e of th e aforem entioned Florida corporation and m ay be serv ed indiv idually and as thecorporate reg istered ag ent as John A. Lentz. Jr., 5405 Freeport Lane. N aples, Florida 34119.

22. Defendant, 1A BUSINESS SYSTE~ LLC, is a Texas Limited LiabilityCompany that may be served through its registered agent Amanda A. Martin. 11500 NW Freeway.Suite 345, Hou sto n, T exa s 7 70 92 .

23. Defendant, PREMIER MORTGAGE FUNDING, INC. is a Florida Corporationtha t m ay be served throug h its reg iste red a gen t C T Corp ora tio n System, 1200 South Pine Road,

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P lant ati on , F lo rid a 33324 .24 Defendant, TOWER CITY TITLE AGENCY , LLC, is an Ohio Lim ited Liability

Company an d m ay be served through i ts r eg is te re d age nt Marilyn A . M ana rin o, 6 15 1 W ilson MillR oad, S uite 110 , H ighland H eights, O hio 44 143 .

25 . Defendant, JOHN A. SOLAKIAN, is an i nd iv id ua l who performs residentialappraisals an d is so licensed in the State of Florida. H e may be served at his m ain address 223Silverado D riv e, N aples, F lorida 34 119, or his license m ailing address 117 25 C ollie r B oulevard,N aples. F lo rida 3 41 16 .

26. Defendant, EDWARD L. WADDELL, Jr., aka Edward Lee Wardell, aka.James Lee Edward, aka Autrae Sterling Waddell, aka Ardare Waddell, aka Ardrae Waddell.Ardrae Sterling Waddell, ("Waddell") is an individual who may be served at 8619 Quail Hills,Missouri City, Missouri City, Texas 77489

B. JURISDICTION AND VENUE27. This court has jurisdic tion over Plaintiffs' c laim s based on 28 U .S.C. 1331

a nd /o r U .S .C . 13 37 , w hich provides jurisdic tion for R acketeer - Influenced and C orruptO rg anizations ("R ICO") claim s, 18 U .S .C . 1961-1967 ET SEQ; AND 29 U .S.C . 1367, whichp ro vide s jurisd ic tio n for sup plem ental state c laim s, in clud in g A lab am a, F lorid a, G eo rg ia,Louisiana, and Tex as c or ru non law fraud, negligence, contract, conspiracy claims and tortclaims.

28 . Venue is proper under 28 U .S.C. 1391.C. FACTS AND NATURE OF ACTION

29. Plaintiffs allege that defendants conducted a m assiv e schem e of fraudulent reale sta te tra nsac tion s in volv in g re side ntial prop ertie s lo cated in F ort M ye rs an d Es te ro , F lo ri da .

30 . U .S. Hom e developed and offered for sale condom inium units nam ed OspreyCove. Osprey Cover is a 328 unit m ulti-fam ily residential com munity located on 30 acres. Thetw o, three and four story b uild in gs c on ta in u nits r an gin g insiz e from 1.200 to 1,500 square feetand U .S. H om e stated prior to development that the prices w ould rang e from $170 ,0 00 to$260,000. The pricing w as optim istic in that w hen the units were planned it was at the height ofth e S outhw est F lorida housing boom in L ee C ounty , F lorida.

31. By late2005. it was becom ing apparent that the area was saturated with multi-fam ily units - condos, attached villas, tow nhouses. B y late 2 006, a tw o-bedroom , tw o-bathroom

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co ndo at O sp rey C ov e on E stero P ark way rented for $ 85 0 a m onth. T his w as an inv estor'snightmare.

32. Upon in fo rm a tio n a nd b elie f, Bill Hagan, Division Vice-President of U.S. HomeinSW Florida along with other U . S. H om e officials inOsp re y Cove a nd s ur ro un din gdevelopments decided to engage in a fraudulent scheme to seU all remaining units inFort Myers.Estero and sur rounding a reas t o uns crupu lou s and/or unknow ing inve st or g roup s.

33. Upon info rmat ion and belief, U. S. Home decided to inflate the value of itscondominiums and elicit the help of Defendants, 2 SA Business Systems LLC and Edward LeeWaddell, Jr. along with some o f h is a sso cia te s in Hous to n, Texas. Edward Lee Waddell. Jr. and2 BA Busine ss Sy st ems LLC were engaged to market t he un it s for a s ub st an tia l r et ur n o f c ap it alto U .S. H om e and huge referral fees to Edw ard L ee W addell and 2 BA Business Syst ems andinc lu si ve o f t he o th e r De fendan ts .

34. Upon information and belief, U.S. Home was a lso a ble to elicit the assistance ofi ts s is te r company, a Lennar Corporation subsidiary , North American T itl e G roup , Inc. to ass is tas the Title Company to f os te r th e a ntic ip ate d fr au du le nt s ch eme .

35. Upon information and belief. U.S. Home elicited th e assistance of DefendantBanyan Title Company also to a ss is t i n T it le work and to dupe any of the unwitting Plaintiffinvestors to believe that the fraudulent referrals, inflated prices and other unlawful activities werelegal.

36. U pon inform ation and belief, U .S. H om e on a m ore lim ited basis elicited thea ssista nc e o f T ow er T itle A g en cy in O hio to carry out th e f ra ud ule nt c lo sin gs a nd title tr an sfe r o ft he scheme .

37. Upon information and belief, U.S. Home , De fendant 2 BA Business Sys tem andDefendant Edward Waddell, Jr. also e lici ted the assistance o f V IP Re alty and its principals toassist in th e fraudulent s cheme whe reby VIP Realty would serv e as a real estate b ro ke r in e ac htr an sa ctio n a nd re ce iv e a T hre e (3 ) p erc en t c omm issio n fo r e sse ntia lly d oin g n o w ork . U . S .Home has its ow n sales fo rce o n its condomin ium premises . On n o o ccasion d id the V IP reale st at e agen t and any Plaintiff actually meet o r e sta blis h a n a ctu al wo rk in g r ela tio ns hip . T hisre fe r ra l a r rangemen t with V IP R ealty of Bonita was actua ll y agai ns t the writte n p olic y o f U .S .H om e whic h p ro hib ited a sa le s c omm issio n w he re th e b uy er w as n ot g en er ate d b y th e re al e sta tebro ker or ag en t. S ee Exhibit A. As stated, U . S . H om e h ad its own sa le s fo rc e o n-site a nd e ac h

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of the Plaintiffs was referred by 2 BA Business System s LLC, Edward L. Wadd ell, Jr. and hisassociates.

38 . U pon inform ation and belief, Defendant Benchm ark Florida M ortgageC orporation, Inc. doing business as B reeze M ortgage bandled the preponderance of the m ortgagebroker transactions. Benchmark or Breeze Mortgage, as it is known, is operated by GeorgePastoor who is the husband of Banyan Title C om pany 's ow ner/operator Sandra Pastoor. A s partof the fraudulent schem e B reeze and its loan officer-processor, W ayne R ice, w ould subm it thenecessary paperw ork and inform ation, often fraudulent to conv ince m ortg ag e lenders to loan tothe P laintiffs. B reeze and its em ploy ees w ould assist the P laintiffs in buying m ultiple propertieswhether they were qu alified o r n ot.

39 . Upon inform ation and belief, D efendant P rem ier M ortg ag e F unding Inc . serv edthe same role as Breeze in these fraudulent transactions which was to qualify buyers forproperties that they were not qualified to purchase .

40 . Upon inform ation and belief, Defendants Edward Lee W addell, Jr. is a m ultiple-c on vic te d fe lo n in th e State of Texas. W addell and 2 BA Business System s in which he is aprincipal concocted with the knowledge and consent ofU. S. Home representatives and others tolo ca te b uy er s that w ould pay inflated prices for the O sprey Cove and r el at ed c ondom in ium s inth e Ft. M yers area of Southw est Florida. As is the pattern in these schem es the Plaintiffs were allsolicited by W addell, 2 BA Business System s, a M ike Newsom e and an Anson M assey. Allthese indiv iduals and 2 B A B usiness System s LLC are affiliates and are located in the H ouston,Texas area. At Waddell's in sis te nc e, N ewsome and Massey recruited the Plaintiffs with thepromise of a "can't lose" investment scheme. Waddell directly and through his proxies promisedeach of the p lain ti ff s that if they (P la in tiffs ) p urc ha se d/in ve ste d in the Ft. M yers U . S. Hom ep ro pertie s e ach P la in tiff w ou ld rec eiv e an imm ediate cash re turn on their in ve stm e nt a t c lo sin gwhich would range from $10,000 to $40,000. Thereafter, the properties would be held for ap erio d n ot to exceed one year when W addell and/or 2 SA Business System s LLC and/or a ThirdParty would purchase the properties for a profit of at least another $100,000 to each of the ,Plaintiffs. Plaintiffs w ere prom ised that they w ould have to m ake no out of pocket closing costsor down paym ents in the purchase of the properties. L ikew ise . plaintiffs w ere prom ised that allmonthly mortgage pay ments, taxes, insurance and maintenance fe es w ou ld be paid by E dw ardL ee Wa dd ell, Jr. d irec tly or through his proxies 2 BA Business System s LLC, M ike Newsom e

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and/or A nson M assey .41. The Plaintiffs all e nte re d in to purchase a gre em e nts w ith U. S. H om e for the

purchase of th e condominiums inFt. M yers and/or surrounding areas. The U . S . H om e purchasecontracts all f ra ud ule ntly in du ce d P la in tif fs to pay w ell inexcess of the actual m arket value oft he ir condomin iums with th e promise that th e u nits w ou ld a pp re cia te imm e nse ly in value once allthe condom inium s of th e com plex w ere sold.

42. Upon information and b elie f, D e fe nd an t, D enn is A llis on . I nd iv id ua lly and d/b/aP ro fe ss io na l Appr ai sa l Services o f Southwest Florida, Inc., Defe nd an t, J oh n A. L entz, Jr.in div id ua lly a nd dlb/a L en tz A pp ra isa l G ro up , Inc., andlor D efendant John A. Sola kia n, e ac hconspired with Defendants U.S. Home , a nd lo r VIP Realty, and/or N orth Am erican T itle G roup.Inc. and/or B reeze M ortgage andlor Prem ier M ortgage Funding Inc. and/or T ow er C ity T itleA gency, Inc . andlor E dw ard W addell and/or 2 B A B usiness System s to fraudulently inflate theappraised value of each of the Plaintiffs purchased condom inium s to a value that e xc ee de d th eactual m arket value of the individual condom inium s. E ach appraiser m ade a false declarationthat the appraisal in each instance w as perform ed in conform ity w ith the U niform Standard ofProfessional A ppraisal Practice in place as of the effective date of the appraisal. The appraisalsw ere m aterial m isrepresentations relied upon by the P laintiffs and their lenders. T he appraisalsw ere m ade with the intent to m islead the Plaintiffs and their lenders. A s a direct result of thesea pp ra isa ls, P la in tiffs h av e su ffe re d, a nd w ill c on tin ue to s uf fe r, d amages .

43. Upon inform ation an d b elie f, P la in tif fs we re d ir ec te d by D efendants U . S. H om eand/or V IP Realty and/or 2 BA Business System s that they had to deal w ith the follow ing titlecom panies (1) D efendants N orth American T itle G roup, Inc., and/or (2) Banyan T itle o f F lo rid a,L LC , and/or (3) T ow er C ity T itle Agency. Eac h o f th e title c omp an ie s in te ntio na lly a nd /o rrecklessly r atif ie d a nd /o r f aile d to d is co ve r ma te ria l m i sr ep re se nta tio ns necessary fo r th e variousPlaintiffs and/or their mortgage le nd ers to issu e or h av e is sue d lo an s to the Plaintiffs. Each o f th eherein m entioned title com panies knew or should hav e know n that t he c lo si ng s ta tement sm i sr ep re se nte d a nd /o r c on ce ale d ma te ria l f ac ts . n ame ly . th e buyers' f in an cia l in fo rma tio n, th esource of th e d own p aym en t, th at th ere w ere o bv io us ille ga l re fe rra l fe es a nd /o r d isg uise d re fe rra lfe es id en tifie d a s in ve nto ry in ce ntiv es. T he se re fe rra l fe es/in ve nto ry in ce ntiv es w ere d eliv ere d to 2SA B usiness System s L LC at closing and ranged f rom app ro xima te ly $ 62 ,0 00 to $104,000 perin div id ua l c on dom in ium s ale . Ineach instance, none of the P laintiffs w ere in a tte nd an ce f or the

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closing.4 4 . The United States' m ail and w ires w ere th e conduits o f ch oice fat each of the named

Defendants to c on du ct th eir f ra ud ule nt in ve stment enterprise with the Plaintiffs.45. Prior to c lo sin g. U . S . H om e rep resen ta tiv es, inc lu siv e o fM s. Emily Cox, would

mail aU . S . H om e purchase contract A ddendum A 1 (see &IIibit B) which would require that eachindividual Plaintiff w ould keep the " ... te rm s a nd c on ditio ns o f this Set tl ement Agreement . .. s tr ic t lycon fiden t ia l be tween th e p ar tie s a nd not be disclosed to any other party, wha ts oe ve r, w ith ou t th eprior written con sen t o fU S. Home ... o r d is clo se a ny materia l te rm o f this Sett lement Agreementand Release to any other party w ithout the express w ritten consent of U S. H om e or upon closing ofthis home with U S. Home, then U . S. H om e shall be entitled to m onetary dam ages in the amount ofTw enty Thousand D ollars ($20,000) to be exacted a nd p ai d f rom The Buyer fo r each and everyevent that disclosure ismade to any person without the express written consent of U. S. H om e ."T he Ad dend um A 1 furth er sta te s th at "B uy er u nde rsta nd s a nd agrees that the home cannot bem arketed for sale or sold until U S Hom e has sold and closed all hom es in Osprey Cove . "Addendum A 2 e ntitle d " Pu rc ha se Ag re ement Summary" (see "Exhibit C")would indicate to eachin div id ua l P la in tif f th at U. S . H om e was taking the Base Sales Price and would reduce that amountfo r Custom Features "purportedly" selected by the ind iv idu al P la intiff." T his amo un t would rangefr om app ro xima te ly $ 62 ,0 00 to app roximat el y $104 ,000. Instead o f g oin g to th e P la in tif f p ur ch as er ,as s ta ted inthe Contract Addendum , this am ount rang ing from approxim ately $62,0 00 toapp roximate ly $104 ,000 would be paid directly to 2 BA Business System s LLC an d Edward LeeWadd ell. Jr. at closing. T he referral fee/inventory incentive would ap pe ar on th e HUD -l C losingstatement typically as a section 7 00 item in dic atin g that itwas a real estate broker fee orcommission or sim ply as a section 50 0 item show ing a Reduction inAmount Due to S eller. T hefraudulent nature of the transaction w as hidden and obscured from the Plain t iffs. (see "Exhibit D"Line 508).

46 . After each Plaintiffs closing, Edw ard W addell and 2 BA Business System s LLCwould make a few of th e mortgage and maintenance fees on behalf of each of th e P la in ti ff s but thatcharade w ould soon stop a lto ge th er . The re afte r. Edward l.ee Wadd ell, J r. and 2 BA B usinessSystems LLC s to pp ed making referral payments to M ike New som e and Anson Massey an d stop pe dconununicating with Plaintiffs inany fashion. Anson Massey m ade tw o m onths of paym ents for al im i ted f ew P la in tif fs inlate 2006.

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47. U ltim ately , Plaintiffs did not have the financial m eans to c on tin ue th e month lymo rt gage , in su rance, tax, and m aintenance fees and becam e delinquent which th~ resulted inforeclosu re p roceed ings.

D. COUNT I-VIOLATION OF RESPA, 12 U.S.C. 2607-ALL DEFENDANTS

48. By this reference, Plaintiffs hereby incorporates the allegations set forth abov e asthoug h fully set forth herein.

49. Congress enacted the Real E state S ettlem ent P rocedures A ct in 1974 to shieldhom e b uy ers "from u nne cessa rily high settlement c ha rg es c au se d by certain abusive practices."12 U.S.c. 260J(a). Section 8(a) o fRESPA pro scrib es giving or accepting "any fee, kickbackor thing of value pursuant to any agreem ent or understanding ... that business incident to or a partof a real estate settlem ent service '" shall be referred to any person." 12 US. C. 260 7(a).Section 8(b) sim ilarly prohibits the paym ent of any percentage or division of a charge except forse rv ic es a ctu ally r en de re d.

50. U . S. H ome and 2 BA Business S ystem s L LC exchang ed kickbacks and referralswith each other and likew ise required thai Plaintiffs solely conduct business with one of th e othernamed Defendants in that particular Defendant's field of alleged expertise. Either U. S. Hom e or2 BA Business Systems LLC made the referral to the Title Company, real estate broker, orr es id en ti al app ra is er and paid for the service. U . S. Hom e and/or 2 BA B usiness Sy stem alsomade th e referral to the M ortg ag e B roker with the expectation that the broker w ould falsifydocuments or fraudulently qualify the nam ed Plaintiffs for a loan that th ey wou ld n ot ord in arilyqualify and at a significant higher than market cost to the Plain t iffs.

51. Plaintiffs seek as a penalty an amount equal to three (3) tim es the amount of anycharge paid for the settlement se rv ic e ren de re d by D efe nda nts, in div id ua lly a nd c olle ctiv ely .E. COUNT 2-VIOLATION OF RICO 18 US.C. 1962 (a) AND (el -ALL DEFENDANTS

52. By r ef er en ce , P la in ti ff s hereby incorporate the allegations set forth above asthoug h fully set forth herein.

53. As described above, subject defendant s ope ra ted as an en te rp r ise within themeaning of 18 U .S.C. 1961(4). This enterprise eng aged in inter-state and intra-state activities,and its activities affected interstate and foreign comm erce. This enterprise operated out ofTex as . F lo rid a, Lou isia na , Alabama and G eorgia. T his enterprise ha s conducted its affairs

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through; (a) a pattern of racketeering activities; (b) exercising significant control over a nd w ith inthe enterprise; andlor (c) conduct of the enterprise's affairs are fraudulent, and have resulted ininjury to each an d every Plaintiff. Defendants individually and collectively have used the mailand wires to transmit false and fraudulent information across state lines.

54. Subject Defendants were all members of the RICO enterprise; however, theenterprise found its nucleus and decision making center inU. S. Home Corporation and itsemployees and agents, Mr. Edward Le e Waddell, Jr. an d 2 BA Business Systems. These actorsare common to every transaction in this lawsuit related to each sale to a Plaintiff. U. S. Home,Edward Lee Waddell, Jr. and 2 SA Business Systems LLC coordinated with each other to inflatethe sales prices of the U. S. Home Corp. condominium units.jointly these Defendantsdeceptively devised a means to filter between $62,000 and $104,000 to 2 BA Business SystemsLLC and Edward Lee Waddell, Jr. on each transaction and said Defendants conspired with eachof th e other individual defendants to misrepresent to Plaintiffs and their lenders th e true nature ofth e transactions and the true information regarding the Plaintiffs assets. liabilities. income andfinancial condition which was a prerequisite to obtain the U. S. Home condominiums offered byDefendants.

55 . Defendants each knowingly and willfully associated with the enterprise an dconducted, and participated inthe conduct of the enterprise's affairs, directly and indirectly bydefrauding the Plaintiffs. individually an d collectively, through a pattern of racketeering activityinviolation of 18 U.S.C. 1962{c). Inorder to engage inthis pattern of racketeering activity,Defendants inflated the actual market purchase price of each individual condominium. obtainedand submitted false and fraudulent appraisals. submitted fraudulent mortgage loan applicationswithout the knowledge or consent of Plaintiffs and submitted false and misleading information tosupport the loans. Lastly, Defendants reneged on the promise to pay all Plaintiffs mortgagepayments, insurance assessments, maintenance dues, and related expenses as promised toPlaintiffs.

56. Each Defendant is a "person" as that tenn is defined in 18 U.S.C. 1%1(3).57. Each Plaintiff is a "person" as that term is defined in18 U.S.C. 1961(3).58. Defendants willfully combined, conspired, and agreed to form an association in

fact which constitutes an "Enterprise" under 18 U.S.C. 1961(4). This enterprise was engaged inand its activities affected interstate commerce. Defendants were all associated with th e

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Enterprise at all times relevant to the events alleged herein.59. Subject Defendants pattern of racketeering activities spanned throughout 2006

and threatened to continue indefmitely until Edward L. Waddell, Jr. and 2 BA ~usiness SystemsLLC failed to continue payments to the Plaintiffs' lenders and homeowner associations andfailed to continue referral fees to Mike Newsome an d Anson Massey.

60. The pattern of racketeering further involved fraudulent acts in support of th escheme or artifice to defraud (18 U.S.C. 1341) constituting mail fraud, wire fraud (18 U.S.C 1343), and financial institution fraud (18 U.S.C. 1344) all ofwbich are "racketeering activity"as defined in18 u.S.C. 1361(1)(8).

61. Collectively, defendants obtained millions of dollars in ill-gotten gains inthefraudulent U. S. Home condominium investment enterprise. Upon information and belief,defendants reinvested these ill-gotten gains in extravagant living, to support other real estateventures, front payments to "new" buyers and payoff a portion of th e debts accrued inth e courseof operating the enterprise.

62. Plaintiffs and their respective lenders suffered damage to their livelihood, health,an d suffered financial losses, credit disparagement and other damages, both economic an d non-economic.

F. COUNT 3-VIOLATION OF RICO CONSPIRACY18US.C. 1962 (d)-ALL DEFENDANTS

63. By this reference. Plaintiffs hereby incorporate the allegations set forth above asthough fully set forth herein.

64. As described more specifically above, throughout 2006, Defendants knowinglyand willingly conspired to violate 18 U.S.C. 1962(a). (b) and (c).

65. As a direct and proximate result of the Defendants' conspiracy, Plaintiffs andtheir lenders suffered damages to their business, credit, livelihood. property and health.

G. COUNT 4-CIVIL CONSPIRACY66. By this reference, Plaintiffs hereby incorporate the allegations set forth above as

though fully set forth herein.67. As described above, the facts establish that Defendants entered into an agreement

or understanding with each other to act unlawfully or to use unlawful means to do a lawful actwhen they induced Plaintiffs to accept this unlawful investment scheme and provided false

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appraisals. false information and failed to disclose material facts to Plaintiffs and their lendersr el ated to the su bje ct lo an s o n the subject propert ies.

68. Defendants entered into a civil conspiracy with each other with the unlawfulobjective to deceive Plaintiffs and their lenders afmoney, Plaintiffs' good credit, and Plaintiffs'financial goodwilL

69. There was a meeting of the minds between Defendants to defraud Plaintiffs andtheir lenders of money, Plaintiffs' good credit, and Plaintiffs' financial goodwill.

70. Defendants each comm itted at least one ac t in fur the rance of the conspiracy.including but not limited to providing false information to Plaintiffs to induce them to allow theuse of their credit and providing false, misrepresented and inaccurate information to th e variouslenders on the subject loans to Plaintiffs for the subject properties.

71. As a result of this civil conspiracy. Plaintiffs and their lenders were caused toincur damages to their business, credit, livelihood, property and health.

H. DEMAND FOR RELIEFWHEREFORE, PLAINTIFFS, A ileen B ro wn , T erry C ha rles, Roy Culb er so n, K n ollie

Davis, Lueverta Dav is, H en ry G re en , H en ry a nd B eve rly H ar ris , K ash ifa H arr is, J er ry J oh nso n,Ayoola Ogunhiyi, Reginald Pollard, Keron R ic ha rd s, V ale rie S ha rp . and Da vid W illiam s demandjudgment as follows:

A. An order awarding as a penalty an amount equal to three (3) times the amount of anycharge paid for the real estate settlement services in violation of RESP A.B. AnOrder awarding treble damages against all defendants pursuant t 18 U.S.C. 1964(c).

C. AnOrder awarding such damages as necessary to prevent unjust enrichment andcompensate Plaintiffs for injuries arising out of Defendants violations of federal, stateand common law pursuant to civil conspiracy and further plead causes of action.

D. AnOrder against all Defendants awarding punitive damages to Plaintiffs in an amountthat would punish those Defendants for th e fraudulent and malicious conduct alleged inthis complaint and that would effectively deter those Defendants from future unlawfulbehavior.

E. AnOrder against all Defendants awarding Plaintiffs their costs and attorney's fees; andF. AnOrder against all Defendants for all other legal and equitable relief to which Plaintiffs

are entitled.

12


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RESPECTFULLY SUBM IT TEDLAW OFF ICE OF JAM ES A. M cGUIREAtto rn ey s and Counselo rs a t LawP.D Box 22717 (for Mailing)H ton. Texas 77227(7 7716300Phone( 13 771-630

13


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EXHIBIT A


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LEE/COLUER DIVISION

_.REALTO R REG ISTRAnON 'FORM.4Qent 's Name: ---I....J..L.oo~..L..Ul...a.....---I-Jt....!.4~--I--t:=:L...L..L::.u.....o...l- _Bro~SNa~: __ ~~~~~~~~~~~~ _

I wiSh to register the followina djent;Name: V l L v i J , - J t' I J ; a . l 4 - S - _ -Address: J 5'1'2 2- i;J,J d - l ! ) o . _ fa y'" Ie - Ct:Oty: /1t)}(sty,~ -srate: T " A . - Zip: 17t>+9Registration Date: - _ . ; . 5 . = - . . ~ , - , 2 . C : S . . . . J ; ; ~ ~ ~ ' b : . , _ _ _

ThisRegistalitm ;. valid fDr ninety (flO) days from abtwe reg/strIItIOn ..US H om e N e w H om e C ons ultan t: Z I n ? ~ ( } ) ) ( , . . . , .US Hom e W e lcom e Hom e Center: ~ a v . . e .Customer AuthorIzatIon: - J YJ . -'/_ / ,(Acknowledging broker representation) tJt.-t!/ h-'/v~- ~ j ~ - - ~ ~ ~ - - - - - - - - - - - - - -(~) Broker/Agent signature reguked on Code of-Mutual Understanding

___""". Onback of this Begist@tigh form _ . _ _ < . ,un_ -


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-:tIS HOME C O R P O R A n o N .8R.OKER:REG ISrRAnON PROCEDURES .This II'"Idielsbl\ding IS e s t a b l i s h e d fo r th e m u t u a f benefit of U s H om e Corporat ion and r n e I I l b e r s rI lh e real estD, : s . o f e s s I O i ' " lo It IS e s t a b l i s h e d s o n o misunderstanding o c c u r s between U S H o m e CoJpcqtlon iOd th e b ro ke r. The Intent I sthat th is ~ replac;a, and Is in l i e u r J , a formal C O I ' l t r 4 I d .WIth US H o r n e ' s outstand\ng - i n v e n t o r y fimoderately priced home s r ea dlly a v a I a b A e for f i n a r i d n g , t h e s e pnx:edwess n o u k l e n 2 I b I e th e broker to m a I c e m a n y a d d It : i o M I sales 'NIh a m i nimum of ef for t . In order fo r a f i1 1 1 0 0 t h w c : x 1 c Ip g . . klng-tam r e l l 1 t k l n s t 1 l p trJ develop, it Is necessary that both part ies att in good f ait h an d idJere to the guidelines below. In thea b s e n c e d a written ~ between a I lrc*er and an o f f i c e r o f US H o m e Ccxpcntian, these QlideIines wi PI'MIrNB th e & p O k e n word. The Intent is fo r th e b r o k e f to sIVN homes built 11( US Home a n d Ie oe iv e I c ammJ ls ia n fo r a. ~ sale . U S H o m e maiQins It s CMn sales bee twId wit no t pay 8 bIoker fo r an ~.saIe.In order to estIbIIsh a t o o - b r o k e r anangement whereby a c o m m i s s i o n m ay be due on a ~ sale, di efollowing guidelines mus t be f o ll o w e d :1) The b r o k e r or hIS repteSentative must personally aa:ompany h i s / h e r die nt on the dlent's fDt mil to IIW U S Home. H o~ Home cen te r .2) At th e t ime of the illtlalmil to a ~ Home. Q7tBr, th e broker or his repleser&ttve D I . I S t regIsb!r *Iher d J e n twith a U5 Home representative. 7bt t ic:g/$tJatJM t JO Ike must be .dated.P I . . "P"i. The r e g [ _ s t u I t k l n n o t t c e _ i t s to c i n I y tN ! U S Home WetmJe Home C'.Rw'Mla'e-.1t 1 & e l l !e l l ted. F o ri ' I S t 2 I n c e , If you reglsta" a c:Ient at Bella Te rr a S ing le Family an d th e dlent later buys.at , 9/, HerI:age. Bay Terraees.(Whee you did not a a x x n p a n y them o r registEr them), n o co-broker arrangeRlEtt 1 5 e s t a b I I s h e c t t h e r e f o r e . . n o_ _ O r i 1 i n i s s I o n would be due. .(a) ~ vat 1 X H 1 S t i t : u t e 5 - . reg istratkJn even ~ the; registration is ewoalted by th e seiling agent WRhlUt: th eprospedIve buyer pbysIcalIv Signing an y I nS tr umen t ex regislmion. This aim applies to any vIIIDs regiStI!red

by US Home repre sentattves. _ .(b) Th e b r o k e r may I ! l C t e n d th e registratIoo o f a dient fo r an a d d i t i o n a l ninety (9 0) ~ p e r 1 0 d by written notice toUS Home prior /D /h e exp/nJ//on of tile I n i t i a l !XhJay tegIstration pedod .3) lhe b r o k e r w i ll be due a ~ It a sales agreement is executed w t t h i D . ninety (90) days !tom th e dtIIB Q/ tbt Id Ien t 's t /a t vIsIt/n!gIsIrat dale (or MJfhorIzed exImsIon Iht:reof) .4) Th e NI!w H o m e C o n s u l t a n t from US H o m e wll hinIe th e sale, mor tgage f inanCing, a r w ; t dosing.S) No obligation to pay a axnmfssion is Inctned by u s - Home wti the 8dUaI "actdale" (dosing) tJIces P l a c e ata ttiecompany.

a) US HOme mmpub !s c::o-broker oommIssfons at th e rate of 3% of the=ales price. l 1 ' l l S tndudes mode l m:I~homes.b) Paymen t rIin'f f D O I ' n I s s i o n du e will be made by 1M tile c o m p a n y a s s ai d campany dIsturses prOCIIeds at th etine d c;Ia5lng.The b r O I C e r r n J I o r his representBI: ive is expected to do a u in hiS/her power to as sis t U S H o m e ' s rep esentatt.... byshowing t h e . prapesdes an d obtaining an eceaJted sales agreement that meets hlsIMr dient'uaeeds. 'The New H o m e Consultant from US H o m e is responsible fo r providing Q.IfleOt Irtormation regarding US Home's Inwentoryd homes mIabIe fo r p t J I ' C h a $ e , sales prices,. and finardng. '

. . . . .

, 'No b ro ke r Is a l l o w e d to advertise US Home products without wri t ten permission from US Harne 0Jrp0ntI0n.

_ ___ TD : '-{j~~W2 j J . J c w


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EXHIBITB


18/25

= Addendum A 10512412006 Page; 1ob N u l n b e r 16071510345

The p ro vis io ns o ftb ia a dd en dum a r c part o f tile sales a gr eemen t d at ed I I 5 I l 4 I Z O O 6 between _ = : U : : . . : ,. : : : . . : H o = D I : : . C - - . - ~ _81 "'Seller" an d David &. BoBBette Will iam, as "Buyer" for the following described pmperty:Lo t (Unit)H_ Block 4______ Phase~11~4_~ _of Osprey Coy" 4 StyAddress 8451 KINGBIRD [,00' #345

Sectionffract ._0>


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EXHIBIT C


20/25

Job Number lW11510345AddendumA2

0512412006 Page: 5

Buy er D av id &Bonnet te W i ll iamsHomesite Address 8451 KIN GB IRD LOQ P #345

291.990.00

Homesi te P remh lm : 0.00

2ulto.. Features: ~72,998.00

r ot al S a le !! Prke 218,992.00

. Sbaded OptioDI Are Included iD Base Price of Bome

Purchase Agreement Summary

C ity FO RT MYER S State FL Z ip 33912

Amogld !!SAddidoDaI Depo&ltCustom Feature ep&Slt:Add itio na l C usto m F ea tu re D ep os it:Earnl ! l r t MODey DepOSit:Check Number:

ALL DEPOSITS (INCLUDING EARNEST MONEy) ARE NON~REFUNDABLE

0.000.000.000.00

This a d d e n d u m i s n ot binding o n S el le r u nti l a cc ep te d b el ow b y a n a ut ho ri ze d D iv is io n O ff ic er o f S el ic r.

ow Home Consultant I D a t e;~p~

bmtUUfuvBuyer

Ionst rect ion Dale

I

I 5/15/t:l6I Date1 . K / ; u j , 1 J 6I Date/

Buyer I Datevision Off ice rin te d: 0 51 24 12 00 6 0 2: 39 :4 3 PM b y Em ily C ox

I Date


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EXHIBITD


22/25

A. Se tt lement S tat ement U.S. Depa rtmen t o f Housmga nd Urba n Deve lo pment7. Loan Number

11,9


23/25

i1 :Cb,rftS_"ZOO, TOTAL !'lAT.

u . s . D EP A R T M EN T O f H O U S I N G A N D U R B A N D l! V BL O JIM E N TS'l1LllMENT STATEMENT PA

i COM. "" .......... , ......~~ ?01 OQnM @ 1.00 % 1I.7~9.7[1Div:isionof.

7ill. 8.7:59.10P.idFrom~.unds At.202.7m. ,n.in.r 2..7104.800. 1tl:1DI_!'_.J~e in WItD l.Oln

80J Lmn L Pee .50 % to 11_ Mnrto1llH', X I l 2. Ulan Di!COU1lI % 10S03. ADDnaiSal Pe e .J . _to A Dor ai sa J < S3 Z S. 0 0 >&04. DO!:Prenlo Morb!a2e L e n d i t s Network8O.'i. I Fee to ~ Lenders NetwMk806. Broker Fe e to Breeie Mm12a2Broll. I'lond C_ to M-so.. r..... .n : lIlMurntIr809. ''''n"lir~Hnn to A,_,....M_""""

1.459.9;"l'.O.C..250.00~49.0/)1.459.95_j().OO8.50

J66.00HIn YSP d'i!nll ~I"I> nd bv lender III II..,.,.., Mnrkao"1 1 1 I _to&I,. to8 1 3 . In&L4 . 10815. to9@:. ItenuKcqulrlld By Leadn To Be Paid In A4\lance901 , , , - . . < 1 m - . m ID 71Jl2oo6!iil 119.1969 Ida'll 156.79904. Vt:al'S to905. "ean to()()( Reserves With l.eader

mnnth~11002.Monoltf: in~uranec montJW net tn


24/25

Case 4:07-cv-03427 Document 2 Filed 10/18/2007 Page 1 of 1

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF TEXASHOUSTON DIVISION

Civil Action Number: 4:07~cv~03427ORDER FOR CONFERENCE

AN DDISCLOSURE OF INTERESTED PARTIESJudge Keith P. Ellison515 Rusk Avenue, Room 3716Houston, TX 77002on December 7, 2007 at 01:30 PM

COURT PROCEDURES AND ATTACHMENTS, WHICH ARE APPLICABLE TO CASE ASSIGNED TO mDGE KEITH P.ELLISON CAN BE OBTAINED ON THE DISTRICT WEBSITE AT www tx S uscourts. g O Y

1. If Plaintiff would like a scheduling conference earlier than the date and time noted above, once theAnswer has been filed by Defendant(s), please contact Stephanie Vaught, Case Manager to JudgeEllison at (7l3)250~5181 or email to stephanie [email protected].~ov to schedule an earlierinitial pretrial and scheduling conference.

2. Counsel shall file with the clerk within fifteen days from receipt of this order, a certificate listing allperson, associations of person, firms, partnerships, corporations, affiliates, parent corporations, orother entities that are financially interested in the outcome of this litigation. If a group can bespecified by a general description, individual listing is not necessary. Underline the name of eachcorporation whose securities are publicly traded. If new parties are added or if additional persons orentities that are financially interested in the outcome of the litigation are identified at any time duringthe pendency of this litigation, then each counsel shall promptly file an amended certificate with theclerk.3. Fed. R. Civ. P. 4(m) requires defendant(s) to be served within 120 days after thc filing of thecomplaint. The failure ofplaintiff(s) to file proof of service within 120 days after the filing of thecomplaint may result in dismissal of this action by court on its own initiative.4. After the parties confer as required by Fed. R. Civ, P. 26(t), counsel shall prepare and file not lessthan 10 days before the conference a joint discovery/case management plan containing theinformation required on the attached form.5. All counsel shall prepare, fill in dates and bring the SehedulingIDocket Control Order to the initialpretrial and scheduling conference. The Court will enter the pretrial order due date and trial date onthe scheduling order and may rule on any pending motions at the conference. Counsel may obtainthis Court's form of SchedulingIDocket Control Order from the district website.6. Counsel who file or remove an action must serve a copy of this order with the summons andcomplaint or with the notice of removaL .7. Attendance by an attorney who has authority to bind the party is required at the conference either inperson or by telephone. Please inform the Court if you wish to participate by telephone.8. Counsel shall discuss with their clients and each other whether alternative dispute resolution isappropriate and at the conference shall advise the court of the results of their discussions.9. A person litigating l 2 l : Q ~ is bound by the requirements imposed upon counsel in this Order.10. Failure to comply with this order may result in sanctions, including dismissal of the action andassessment of fees and costs.

By Order of the Court


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Case 4:07 -cv-03427 Document 3 Filed 11/29/2007 Page 1of 1

UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF TEXAS

Aileen Brown, et al.v. Case No.: 4:07-cv-03427

Judge Keith P EllisonU S Home Corporation, et al.

Defendant

NOTICE OF RESETTING

TAKE NOTICE THAT A PROCEEDING IN THIS CASE HAS BEEN SET FORTHE PLACE, DATE AND TIME SET FORTH BELOW.

Before the HonorableKeith P EllisonPLACE:ChambersUnited States District Court515 Rusk AveHouston, TXDATE: 1122/08TIME: 02:30 PMTYPE OF PROCEEDING: Initial Conference

Date: November 29,2007Michael N.Milby, Clerk

Documents

Aileen Brown Et Al Filed Orig Complaint 12 12 07