HomeMy WebLinkAboutProperty Owners meeting to enable Federal Claims. HIGHLANDS YgRO BEACH MES'1' AGMULB
Attend According To Last Name
LOCATION: HOLMff INN VIR0 REACH — OCUNSIDE
3384 Ocean Drive, SR 60 grit, Airport 3 mi.
----------------------------- through M
Sebastian/1/ero ---------------------------
-- Beach Residents With Last Names A
Date: Sunday, June 24th. Time: 3:00 pm
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Sebas Yero Beach Residents With Last Names N through Z
Date: Monday, June 25th. Two-- pm
NORTH �RT OUT OF STATE IAT OWNERS• TION
P.O. Boa 130
RIYlUt EDGE, NEW JERM 07661
June 15, 1990
Lawsuit Filed Against GDC by Sebastian/Vero Beach And Other Property Owners)
Rolo, et al. vs. General Development Corp., et al., No. 89-3373-
United
9-3373United States District Court, District of New Jersey )
URGENT MEETINGS FOR SEBASTIAN HIGHLANDS/VERO BEACH PROPERTI OWNERS
TO ENABLE INDIVIDUAL CLAIMS TO BE ADDED IN FEDERAL COURT
The following critical facts and issues, summarized in
attached letter, are part of the Agenda vital to the
interests of GDC property owners at Sebastian/Vero Beach
-- The above -captioned federal court action in which thousands of
home and lot owners seek recovery of all losses and damages.
Facts, legal documents and Association documents that explain how
to have your individual claims added in federal court.
-- Testimony and evidence that led to filing above civil action and
was presented in federal grand jury criminal investigation.
-- The 16 -count indictment of GDC and GDC's chairman and president,
and their respective pleadings of guilty of conspiracy to defraud.
-- The proposed consent decree injunctive and restitution provisions
arising from plea bargain agreement in above criminal conviction.
The GDC whistle -blower evidence obtained from GDC employees by
this Association that you must hear to be truly informed.
-- GDC's filing under Chapter 11 of U.S. Bankruptcy Code.
The malicious "strike suit" filed by GDC to attempt to gag facts
of GDC's fraudulent practices and stop these meetings to inform.
-- The in-depth and never disclosed facts of GDC's multi -decade
scheme and conspiracy to defraud home and lot owners alike.
-- The plight of GDC's communities that is prompting their community
actions against GDC that, while justifiable, could leave irreparably
injured all property owners not filing their individual claims.
-- GDC's unindicted management's astonishing charges and what GDC
employees are today misstating to property owners.
Why financially injured property owners should be individually
represented and have their individual claims filed just as creditors,
other defrauded property owners and GDC's "communities" are doing.
-- The state and federal court orders permitting these property
association meetings and individual recovery actions.
Dear Sebastian Highl*/Vero Beach Home Or CondominitOwner:
You might have been told to communicate with this General
Development Corporation ("GDC") property owners' Association by local or
national media -- the New York Daily News, NBC Television and media
throughout the country have been publishing comprehensive reports of our
GDC property owners' legal actions and the related research and
investigative results of the professionals retained, and telling
inquiring readers or viewers to contact us.
You might have been advised by officers of GDC home or
condominium associations or officials of GDC communities to contact us --
many local GDC property .owner association and community officials
attended our recent Florida meetings and are advising their home or
condominium owners to contact •us concerning their individual claims
against GDC.
You might be among those advised by governmental agencies to seek
legal advice if you wish to demand your legal entitlements for being a
victim of GDC's fraud -- we have been cooperating with several
governmental agencies in their respective criminal and other
investigations of GDC.
Or, you might be a GDC home or condominium owner who either did
not attend Association meetings held before GDC's pleading of conspiracy
to defraud or who resides in an area in which no Association meetings
were held.
Whichever the fact, you are among the Sebastian Highlands/Vero
Beach home and condominium owners whose records we did not previously
have, who had no means to become informed and who therefore do not have
your individual claims for all damages filed as more than 7,000 defrauded
property owners did and/or are presently doing in the above -captioned
federal court action against GDC.
Purchasers of GDC homes or condos at Sebastian/Vero Beach are
urged to attend these meetings. Your damages are great and it would be
unwise not to demand total recovery as thousands who became informed are
doing. GDC pleaded guilty to conspiracy to defraud home and condo owners
by, among other means, giving you misrepresented and non-existent
"appreciation" on initial lot(s) purchased as a credit towards the
purchase of GDC homes or condos that were grossly inflated in price and
backed by GDC bogus appraisals. As a result of this outrageous scheme
and conspiracy, you lost your entire investment and, worse, might remain
with a home worth far less than the amount of your fraudulently obtained
mortgage.
OTHER PAIN BAY HOME OWNERS LFARHSD FACTS TO BE PRESENTED AT
THESE I+(EEPINGS AND DECIDED TO HAVE THEIR IADI UAL CLAIMS FILED
During the past year, more than 7,000 home and lot owners
attended this Association's meetings, became informed and decided to have
their individual claims against GDC filed in U.S. federal court for
recovery of all damages. Many are home, condo and lot owners at
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Sebastian/Vero Bpi. Others are property owners North Port, Port St.
Lucie, Sebastian, ero Beach and GDC's other Fl da "communities," and
those who provided testimony before the federal grand jury in that
criminal investigation that led to GDC's fraud conviction.
Association members' claims include allegations of violations of
the RICO Act (mail and wire fraud) and Interstate Land Full Disclosure
Act, fraud, mortgage fraud and bogus appraisals and breach of contract.
In fact, this Association members' legal action was the first filed
against GDC alleging the mail and wire fraud to which GDC pleaded guilty
in the U.S. Justice Department's criminal action. Since this is not a
"class action," any favorable outcome by settlement or Judgment
concerning Association members'individual legal actions will benefit
only Association members who thereby become individually represented
plaintiffs in this federal court litigation.
Carefully read
court action, GDC's
Association's recovery
certain home owners w
attend scheduled meet
individual claims adde
the facts in this letter concerning this federal
criminal conviction, GDC's chapter 11 filing, this
action, the proposed restitution program for
ho do not sue GDC and other relevant matters. Then
ings to become informed an
d to this federal court act
disadvantage to those GDC home owners in Se
elsewhere who were informed and filed claims.
ASSOCIATION HERS' FEDERAL COURT LAWSUIT
n how to have your
Do not remain at a
n/Vero Beach and
The initial legal action by the individual members of this
Association was filed on August 8, 1989, and is captioned Rolo, et al.,
vs. General Development, et al., No. 89-33739 U.S. District Court,
District of New Jersey. Approximately 39300 lot, home and condominium
owners are plaintiffs in that action, have their individual claims filed
and are individually represented by Association members' counsel. Note
also that this action is not Just a "North Port" action, but includes
claims of defrauded GDC Property owners at each of GDC's Florida
"Communities" Sebastian Highlands, Vero Beach, Port Charlotte, Port
LaBelle, Port St: Lucie, Silver Springs Shores, Myakka Estates, Julington
Creek and Port St. Johns).
Since that initial filing date, approximately 39000 additional
GDC property owners learned of this Association's members' legal actions
and decided to have their respective individual claims filed in this
action. Under these federal court statutes, each Association member can
demand recovery of all payments or losses, interest, punitive and
exemplary damages of three times what they lost (RICO Act) and all fees
and costs of litigation.
Copies of this lawsuit will be given to you at these meetings.
You will learn that, within the pleading of conspiracy to defraud, GDC
admitted that it committed virtually every fraudulent practice alleged in
this action.
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GDC filed motions to dismiss, transfer and sever the above
Complaint. On January 8, 19901 the federal court denied GDC's motions
and ordered that Association members had 120 days to amend the Complaint
with greater specificity concerning each plaintiff's facts of
purchase(s). Accordingly, the initial federal court complaint was but a
fraction of what it became as result of the above court ruling and the
impact of GDC and its former chairman and former president pleading
guilty to conspiracy to defraud.
LAW FIBRES RETAINED FOR ASSOCIATION NEMBERS1 ACTIONS
Three law firms were retained for three different purposes. The
law firm of Richard A. Joel (New Jersey and New York) was retained to
individually represent GDC lot, home and condo owners who joined in this
Association's individual recovery action as of April 15, 1990. Mr. Joel
therefore filed the enclosed Complaint in behalf of those individually
named GDC property owners. In March „ 1990, the law firm of Bishop,
Cook, Purcell & Reynolds (Washington, D.C.) was retained to perform legal
research and amend and restructure the above federal court action (this
law firm does not represent the individual Association members). Kenneth
Traum of Poley & Traum (New Jersey) was retained to represent the
Association itself in, among other things, all matters concerning the
Association's retaining law firms to individually represent Association
members and file their claims. Additional counsel will be retained as
required to individually represent Association members joining after
April 15, 1990, and to file their respective claims as set forth in the
amended complaint to include the far reaching relevance of GDC's fraud
conviction and/or as required in bankruptcy court.
GDC PLEADS GUILTY TO CONSPIRACY TO DEFRAUD
In March, 1990, GDC and its chairman (David Brown) and president
(Robert Ehrling) were indicted after a lengthy federal grand jury
criminal investigation. Each pleaded guilty to the "conspiracy to
defraud” count that was 16 pages and corroborated the claims in
Association members' above complaint. That criminal conviction included
everything from GDC's fraudulent "exchange programs" (giving lot owners
phony "appreciation" for their otherwise worthless and undeveloped lots
as a trade-in on GDC homes and condos grossly inflated in prices and
backed by GDC bogus appraisals) ... to GDC's fraudulent lot sales
practices (misrepresenting appreciation, investment value and status) ...
to GDC's illegal practices at their sites to prevent customers from
learning the true value of GDC properties (including having GDC
customers' phones bugged at hotels to prevent independent builders or
brokers from reaching them).
The key portions of this lengthy indictment, the sworn testimony
admitting guilt to conspiracy to defraud and the proposed consent decree
enjoining GDC from continuing these unconscionable practices, will be
presented at these meetings. Awareness of these shocking facts(that
might never otherwise be disclosed to you) could prove important to you
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regardless of wheth0ou file or do not file your *vidual claims.
GDC FILES FOR PROTECTION UNDER FEDERAL BANSRUPM LAY
On April 6, 19909 GDC filed for'Chapter 11 bankruptcy protection,
an action in which GDC seeks reorganization while being protected from
creditors. GDC's new chairman and president, Charles Simons, blamed
"short term cash needs" as the reason. GDC recently stated that, "the
pending reorganization proceeding will provide it with the opportunity to
obtain financing ..* streamline operations ... continue future
operations."
Just prior to that Chapter 11 filing, GDC agreed as part of its
plea bargain agreement with the government to set up a $80 million to
$100 million 25 -year restitution program for certain defrauded home and
condo owners who bought between 1983 and 1990• That proposed restitution
program is a settlement that will result in but token relief (at best)
spaced over 25 years to certain eligible home owners and has nothing to
do with this Association's members' individual actions that demand total
recovery of all losses and damages. In fact, as a result of GDC's
chapter 11 filing, that restitution program could be drastically altered.
Whatever the case, the true facts of this proposed token restitution
nroaram will be Dresented at these meetings.
NEW GDC MANAGBKNAT CHARGES THAT GDC LAVEMS MISLED AND
LIED TO UNINDICTED GDC DIRECTORS ABOUT GDC'S FRAUD PRACTICES
As if the foregoing is not outrageous and mind-boggling enough
for GDC property owners, the new management at GDC recently added another
bizarre element to this history of what has been publicly described as
"the scam of the century." Briefly: (i) Brown and Ehrling, the convicted
former GDC chairman and president, resigned; (ii) the unindicted members
of GDC's board of directors assumed control of GDC's management; (iii)
those GDC directors not indicted include persons such as Charles Simons
(former vice-chairman Eastern Airlines), former governor of Florida
(Askew) and the head of Shearson Lehman Hutton (Clark); (iv) the
unindicted GDC directors named Charles Simons to take over as GDC
president and chief executive officer; (v) president Simons' first act
was to state that he and the other unindicted GDC directors had no
knowledge GDC's admitted fraudulent sales practices; and (vi) president
Simons then publicly charged that GDC's lawyers for many years, Cravath
Swaine & Moore deliberately misled and lied to the unindicted GDC
directors about GDC's criminal conduct and resulting cruel injury to GDC
customers.
ASSOCIATION RETAINS MAU BINSTRIN FOR RESEARCH/IHVffiTIGATIVE SERVICES
The Association meetings in the Sebastian Highlands area will be
conducted by Mark Binstein. The Association retained Mr. Binstein in
1988 to provide research and investigative services, conduct Association
meetings to inform property owners of the facts of GDC's fraud,'prepare
Association members' individual files for litigation and follow
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directives of resisive Association members' Adhosel as required i
Prosecute members' legal actions.
Mr. Binstein's previous similar services in behalf of at lb,
six other associations comprised of more than 149000 victims of similar
fraud led to nationwide federal court actions, multi-million dollar
recoveries and governmental actions against the targets of Mr. Binstein's
research activities.
Mr. Binstein cooperated with governmental agencies investigating
GDC's fraudulent sales practices by, among other means, obtaining
testimony and evidence from current and former GDC employees that was
presented in the federal grand jury criminal investigation that led to
indictment and GDC pleading guilty to conspiracy to defraud.Part of
that shockine but ealtening testimony will be presented verbatim at
these meetinvo
TSB ASSOCIATION
The "North Port Out Of State Lot Owners Association" (the
"Association") was organized and formed for purchasers of lots, homes or
condominiums from General Development Corporation ("GDC") at its North
Port, Port Malabar, Port St. Lucie, Sebastian Highlands, Vero Beach and
other GDC subdivisions. The purpose of the Association is to inform GDC
home and lot owners of: (1) our research and other litigation concerning
GDC and your homes and unimproved properties; (2) Association members'
individual legal actions; (3) the Association "Recovery Action" in which
You can have your individual claims for damages filed and prosecuted; (4)
law firms and professionals retained to individually represent
Association members; and (5) the impact on defrauded GDC property owners
of the criminal indictment of GDC and its chairman and president, GDC's
pleading guilty to conspiracy to defraud and GDC's subsequent Chapter 11
filing.
Federal Court Ordered That Property Owner Association Is
Peraitted To Institute Recovery Action gractly As Herein
The federal court (unanimously affirmed by the U.S. Court of
Appeals) upheld the legality andpropriety of precisely this type of
association action, invoked the "doctrine of unclean hands" against
developers similarly charged with fraud, and ordered that:
"... the Association ..
permitted to conduct me
cuss ...
---n «4K\i• ... unuer L
where aggrieved individuals
others of their rights and
their activities are protected
individuals ... could affnra +
LI;mpnasis Added
78 C 50449 U.S.
orm, communica
,g Lne Association. its purposes
,itute a recovery action ... and
ne circumstances of this case,
have joined together to tell
to safeguard a common interest,
by the first amendment Few
o pursue recovery on their ovn"
�t Western Cities v.
Association Mark Bi
"I N. Dist. Il].
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As you A note above, it was "Mark Onsteints" research and
investigative activities that similarly exposed the massive fraud of the
"Great Western Cities" companies owned by the multi -billionaire Hunts of
Dallas, all of which led to those well publicized civil and governmental
actions.
Court With Jurisdiction Over Mr. Binstein's Activities
Issues Order Permitting Him To "Organise* This Action Against GDC
The court with jurisdiction over Mr. Binstein's lot and home
owner association activities during the past twelve years [Illinois]
issued an order on June 30, 19899 permitting Mr. Binstein to, among other
things, organize this GDC property owners' association action, engage in
these association research and investigative activities and solicit
litigants to file these lawsuits against GDC. The Attorney General
agreed in writing to that court order.
GDC'S SUIT AGAINST MR. BINSTEIN TO ATTEMPT TO HARASS, GAG THE
FACTS OF GDC 'S MUD AND STOP ASSOCIATION MEETINGS TO INFORM
In October, 1988, GDC filed suit against Mr. Binstein. GDC
alleged that Mr. Binstein was "irreparably injuring" GDC in its
relationship with its lot and home owners by making false statements
about GDC's fraudulent sales practices and fraudulent trade-in programs
that incorporated inflated home prices backed by bogus appraisals. The
thrust of GDC's malicious action was to stop, harass and/or make it
economically prohibitive for Mr. Binstein to conduct his research and
nationwide meetings at which he exposed GDC's fraudulent practices.
Of course, GDC's action failed. The indictment and fraud
conviction of GDC and GDC's chairman and president demonstrated the truth
of Mr. Binstein's statements. In fact, on April 9, 1990, the federal
court described GDC's suit as a "strike suit" devised to harass and
injure Mr. Binstein. The court then issued a riveting admonishment and
warned of severe sanctions against GDC and GDC lawyers for engaging in
such "odorous" conduct.
The meetings in the Sebastian area may therefore beat be
described as the meetings GAC desperately and improperly tried to stop
because of what Mr. Binstein uncovered, what you will learn and how you
can thereupon seek your legal entitlements in perhaps the only affordable
manner.
ACTION AGAINST GDC PLANNED BT GDC 1 S FLORIDA •COMMUNITIES"
GDC created Sebastian Highlands, Vero Beach, North Port and its
other Florida "communities." Hundreds of thousands of defrauded lot and
home owners' payments were the source of GDC's funding the creation and
maintaining of these communities. The tragic irony is therefore that
Sebastian/Vero Beach and all other GDC communities face the possibility
of great financial injury or worse, now that GDC no longer can defraud
property owners as it its means to meet its community obligations that
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include taxes, develoent and maintenance. •
Many of these GDC communities are for self-preservation reasons
hiring law firms and planning "community" legal actions against GDC.
Their actions are altogether meritorious and timely. However, while
these community actions might serve the legitimate interests of
respective communities (road maintenance, taxes, etc.), they will not
lessen the individual damages to property owners defrauded by GDC. Those
GDC "community actions" only highlight the propriety and urgency of of
all GDC property owners (community as well as individual property owners)
retaining counsel to have their claims filed in all appropriate forums.
In fact, GDC communities' recovery of damages in bankruptcy or
other court could leave GDC home owners not similarly filing claims
irreparably injured as a result of GDC's fraudulent sales and bogus
appraisal practices.
MESTIHGS_FOR SEBASTIAN HIGHLANDS/VERO BEACH PROPERTY OWNERS
These Association meetings for Sabastian/Vero Beach Kowa owners
whose records we recently obtained are set forth in the enclosed
"ANNOUNCEMENT OF SEBASTIAN/VERO BEACH MEETINGS" (the blue enclosure).
Please bring this blue meeting announcement for entrance to meeting.
Especially note that meetings are scheduled alphabetically according to
your last names. Because of the possible number of Palm Bay residents
attending, it iscritical that you attend according to your last names.
FINAL MESSAGE
There no longer is any dispute that you were defrauded; GDC's
pleading of guilty to conspiracy to defraud demonstrates that. Your home
or condo was grossly inflated in price, was backed by bogus appraisals
and your purchase(s) probably did or will result in losses of
substantially all or more than you have paid. Your undeveloped lots
bought as an "investment" are virtually not marketable at any price.
GDC's bankruptcy proceeding adds yet additional complex problems.
Moreover. if ever a
►in
be indi
s
or her individual interests and seek recovery of all entitled and/or
possible, this is such a case. That is why we urge that if you have any
doubts, you should seek legal advice from your personal lawyer or any
appropriate governmental agency as so many others did.
To reiterate, do not remain at a disadvantage to those who are
informed and thereby did or may recover because of action in reliance
upon the above and other facts that will be disclosed at these meetings.
Very truly yours,
NORTH PORT OUT OF STATE LOT OWNERS ASSOCIATION
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