Meridian Fraud Report

8/14/2019 Meridian Fraud Report

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ANALYSIS OF OBL AUDITORS REPORT

Overview

The Gladys Duffy Pew GST Exempt Trust (GDPT) purchased Unit #207 on or about7/1/2002. At closing, the GDPT was given six-months of HOA fees paid for by thedeveloper as part of a purchase incentive package.

The primary contributor to this report, Nye Lavalle, is the beneficiary of the trust andformer occupant of the unit. Nye Lavalle would serve as both the entity member andagent since he would be best equipped to deal with Association issues since he lived inthe Condo. He also coordinated the close the sale.

Stephen E. Pew is the trustee of the Gladys Duffy Pew GST Exempt Trust and both Mr.Pew and Mr. Lavalle have disputed numerous account transactions related to the trusts

ownership of Unit #207 at the Meridian Buckhead, f/k/a One Buckhead Loop since 2005.

However, it was clearly defined that the trust was responsible for all bills related to theCondominium. Since the trust was managed by Merrill Lynch Trust Company(MLTC), OBL was informed it could either bill the trust on a monthly or quarterlybasis for Unit #207 and OBL was provided contact and billing info in both Florida andNew Jersey.

Contrary to the assertions made in the auditors report, Nye Lavalle never made one payment to OBL for any HOA fees, special assessments, or utility bills. The onlypayments Mr. Lavalle made were for clean up fees to parties; payments for fob keys; and

a $100 fee for a water extraction. Such fees were paid by Lavalle in cash.

However, a major accounting problem occurred when the Association and its lawyersthreatened to sue Mr. Lavalle (See Exhibit A) for bills and invoices that were not only notowed by him nor his personal responsibility, but were not owed by his trust. The utility bills and invoices were over five-years old (1998 2001) and were the legalresponsibility of the original developer of the building.

The bills were for unit #1605 that was leased by one of Mr. Lavalles business partnerscompany and by his family and him for 3 years from 1998 to 2001. Each annual andmonth-to-month lease included utilities. No demand, suit, or claim for payment of these

bills was made by the developer. The developer continued its lease with Mr. Lavalle andhis family. Later, when Mr. Lavalle moved into Unit #109 in a private lease, Mr.Lavalles utilities were also included in that lease and paid for by the homeowner.

In the Winter of 2004/2005 OBL management sent, more than six years later, to Mr.Lavalle and his trustees in Florida, demands for payment of a $2500 utility bill (SeeExhibit B). The bill was for a far larger amount that was typically received by the trustee


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for the Merrill Lynch Trust Company. The amount, over 10 times the amount of anaverage bill, raised a red flag to the trustee.

In exercising his fiduciary duty, the trust manager at Merrill Lynch contacted Mr. Lavalleto inquire as to the legitimacy of the bill. He wanted to know if there were any major

problems with the unit, water leaks or what would cause such a high bill. Since there wasno issue with the unit, the trustee asked Mr. Lavalle to conduct an investigation andanalysis of the issue with OBL management to see what the problem was.

When Mr. Lavalle went about investigating such a large amount, he came to learn thatthe bill was not even the trusts bill, but a bill for utilities from 1998 to 2001 for unit#1605 that was owned by the developer. The Association was created in July of 1999and could not even have a claim for bills from February of 1998 to its creation.

When Mr. Lavalle contacted the law firm, he was told that the amounts claimed owedwere not for utility bills, but for monthly HOA fees. When he checked with the trustees,

he learned that the trust paid the HOA fees a month to two months in advance. Afterreviewing their documents and doing some computations on his own, the trustees wereright.

Mr. Lavalle then approached the OBL board in the early summer of 2005 with this problem and warned the association that he suspected fraud by the former developer,management company, and law firm.

The suspicion was based upon a bill, over six-years old, being on OBLs books, when infact it was the responsibility of the developer to pay the bill. Regardless of ultimatepayment responsibility, the condo documents called for the owners to pay any past dueutility bills that a lessor did not pay.

Further investigation by Mr. Lavalle led to the discovery of other owners and residentswith similar problems. Other owners had leases with utilities included that the developerdid not pay and where the utility bills were carried on the Associations books, ratherthan the developers books and account. There were also commercial enterprises in thebuilding, including a hair salon, whose bills were carried on OBLs books.

In addition, various other utility billing schemes and frauds were unearthed. Lavalle, histrust and OBL owners and residents were receiving fraudulent utility bills that indicatedthat their electric and water bills were metered when in fact the Developer and itsmanagement were

Owners and residents received fraudulent metered bills where the meter readings wereactually falsified and created in thin air could make a claim for fraud, deceptive acts, andeven racketeering. Additionally, Lavalle determined that certain meters were turned offin unit owned and leased by the developer so that the other owners and residents wouldpay a higher share of the developers own utility bill. In essence, the developer allocateda higher percentage of his share of utility bills to other OBL owners and residents.


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Allegedly, the actual meters for electric and water use were damaged in a storm and theassociation, while under developer control, received insurance proceeds to repair andreplace the meters. Instead, the fund were used for other purposes, not the replacement orrepair of meters.

Similar utility billing frauds by the same company involved, led to class actionsettlements in some areas of over $1 million dollars. Lavalle, with the support of otherowners and even former board members, desired the association sue the formerdeveloper, management company, billing company and law firm for their participation inthis fraud and to reimburse the association and its members for new meters, contributionsto reserves, and repayments for excess utility fees.

Further investigation by Lavalle, found that the associations finances were dire and itsaccounting books and records were in complete disarray, missing, and even destroyed.Thousands of dollars in checks to OBL were in a safe un-cashed; twenty-five percent of

OBL homeowners were allegedly 60 days delinquent; and payments to vendors outpacedincoming revenue.

A new board, spearheaded by Joe Grenuk, claimed that it would clean up the books andclean up the building. Without addressing the claims of discrimination that will be thesubject of additional reports, with respect to the books of the association, Mr. Grenuk andthe board took upon themselves several aggressive collection actions as described inletters to the board and in minutes of the association. (Exhibit C).

Mr. Lavalle, a consumer and investor advocate who knew of the dire financial conditionof the association as well as the fraud discussed above, informed the board that such actswere violations of various state and federal laws. He also advised the association ofseveral ways he would help with law firms he consulted to sue the developers and othersfor the abuses that led to the associations financial problems.

Instead of welcoming the advice and support, Grenuk and the board decided toimplement the aggressive actions with the full knowledge of legal liability and risksinvolved. They weighted the legal liability and risks from low to high and ignoredwarnings from Lavalle and others of the liability.

In addition to the prior frauds and abuses, Grenuk, OBLs new manager and the boardimplemented new and additional frauds, abuses, and financial schemes in violation of theOBL condo documents in order to make the associations books look better than theyactually were.

Eventually, the board, management, Grenuk, Lavalle and his trust could not come toagreement over the associations books of account for the trusts unit #207. Lavalle andhis trustees had determined that his trust was defrauded by thousands of dollars and latertens and now even over one hundred thousand dollars in unlawful fees, bills, fines, and


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assessments. The trust has paid its complete obligation and has provided proof thereof tothe association.

Contrary to the Association, their lawyers assertions and even their Presidents falsetestimony, One Buckhead Loop has had major accounting, book and record keeping

issues since its inception. Many of the issues were originally created by its developersand the first management company that managed the Association. First Communitieswas OBLs first management company and they were owned by one of the buildingsorginal developers.

When a new owner board took over management and desired to audit the books of theAssociation, First Communities refused and failed to provide the Association with thenecessary documents to conduct a thorough and independent audit of the Associationsbooks as well as each members account.

What is know is that there was a massive fraudulent scheme documented by this author

that has uncovered known and suspected accounting, financial, and bookkeeping fraudsand abuses.

The report issued by Kevin Baldwin, an accountant hired to conduct an audit on Unit#207s account from date of purchase until December 31, 2007, is yet another attempt toextend and conceal a decade long pattern and practice of fraud and deceptive acts promulgated by OBL, its officers, management, billing agents, and law firms againstOBL members, homeowners, and residents.

No one questions the Associations ability to levy legitimate, lawful, and reasonableassessments according to the OBL Declaration of Condominium and its Bylaws.However, as admitted in the Federal Court case between Nye Lavalle and OBL, owners,members, residents, the association and board members are each governed by theDeclaration and Bylaws. Its simply not a one-way street.

However, past management companies, developers and the current board andmanagement, have obliterated the terms, conditions, and provisions in these agreements.For several years, many homeowners, including past members of the board, complainedto OBL and its boards of these abuses.

The refusal of the OBL board to provide documentation and evidence to support theirdemands has led to state and federal lawsuits seeking over $10 million in damagesagainst the association.

Baldwins four-page report is attached as Exhibit D to this report. His spreadsheets areattached as Exhibit E.


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OBL Accounting & Financial Record Keeping

OBL does not have one system whereby all historical data has been boarded onto anew system to show a total historical account history. Instead, OBL relies on incomplete,redundant, and redacted spreadsheets, account histories, transaction ledgers and otherdocuments from various vendors and outsourcers to reply upon.

Since inception, it appears that OBL has had three systems used by accounting andmanagement outsourcers that include the First Communities System that has yet to beprovided; the Brannen/Goddard system; and the Cinc Systems used by HMS.

There have also been three utility billing systems utilized. The first was the Viterrasystem used from inception until on or about fall of 2004 followed by the AMS systemthat was used until the Spring of 2007 when OBL began reading its own meters andbilling via HMS.

To date, despite over one hundred written and verbal requests and dozens of transactionhistories provided (Exhibit F), the GDPT has not received any of the source documentsrequired from July 1, 2002 to May 10, 2004.

The only document received with any transactions for this time period was the Auditorsspreadsheet, which has been identified as having many errors, frauds, misrepresentationsand abuses as described herein.

In the auditors report, he lists a One Buckhead Loop Condo Association Rent AccountLedger for Unit #207 for a period from 4/1/02 to 5/25/04. Despite all the requests, thisimportant document has not been provided.

Furthermore, OBL claims no source documents exist to analyze utility use prior to9/24/04. As such, OBLs auditor makes invalid and erroneous assumptions byextrapolating what was due, paid, and owed on GDPTs account for utilities.

Except for limited periods, when Mr. and Mrs. Pew would visit and reside, the unit wasoccupied approximately 6 months per year, by Mr. Lavalle. This is evidenced by variousmonthly water bills that show a $0.00 balance due for metered water use. Yet, for thesame time periods, large electric bills were billed for non-usage.


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CRITIQUE OF AUDITORS REPORT

Flawed Scope of Work

In Kevin Baldwins state of scope of work, Baldwin states that he was contracted toreview the account of Unit #207 and to test selected transactions to determine if thebillings and ending balances appeared reasonable. I was not contracted to give myopinion as to the complete accuracy of the accountBaldwin states!

Anyone understanding accounting parlance, would know that what this accountant wassimply doing was checking a sample of numbers to see if they added up. Plain andsimple, does 2 + 2 = 4! In addition, Mr. Baldwin was only testing selectedtransactions and he states he was not even looking at whether the numbers providedwere accurate, lawful or if the formulas used to create the numbers contained any fraud.

For example, if for several months the water meter bills said that between $25 to $50 permonth was owed for water and then the water bill jumped up to $500 per month, Mr.Baldwin was not questioning that number and obvious red flag, he was simply adding thenumbers given to him and not analyzing nor looking at the number to validate itsaccuracy. In summary, this was not an audit, but a math exercise!

In one instance shown in this report, billings for water usage go up 2000% over a bill forthe same time frame. Such an obvious fraud is not only intentionally ignored by theauditor, but concealed and covered up!

Mr. Baldwin made no determination if the figures provided were accurate, lawful,

fraudulently created, or due or credited on the rightful dates. All he was doing in hisreport was to add the numbers given and seen if they came out close to the balance thatwas claimed owed.

An accounting project of this sort is typically taken out to conceal and cover-up financialschemes and frauds and say it all adds up, so it must be owed since the math works.

Yet, even in this very simple exercise, Mr. Baldwin makes drastic professional errors andcommits potential malpractice when he doesnt identify the inconsistencies and obviouserrors in his report as detailed herein.


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ACCEPTED AND UNACCEPTED FACTS & FIGURES IN

BALDWIN REPORT

Baldwin states in his report that for HOA dues the account was correctly charged,according to the documents provided me. There is no disagreement on the trusts part asto the monthly HOA fees since they are what they are. Also, there is no disagreement onthe amount of the properly voted on special assessment and the monthly paymentamounts for the special assessment. The trust accepts the interest calculations asaccurate, until verified by its forensic accountant.

The trust and Lavalle have and continue to dispute all utility fees until appropriate meterreadings, allocation formulas, source documents, and master utility bills can be providedfor an appropriate audit. The trust disputes all legal fees, late fees, fines, misc. chargesand assessments other than the lawfully voted on assessments by the members.

HOA Fees & Special Assessment Approved

Mr. Baldwin states in his report that he prepared separate tabs on his spreadsheet for theassociation fees and the utility fees since they were tracked on separate sources. Unlikethe utility tab and its data, which is variable, the monthly HOA fees and lawfully passedspecial assessments are virtually set in stone.

The trust and Lavalle do not dispute the validity of monthly HOA fees and the specialassessment that was passed by the associations members, including Lavalle.

Table A below is reflects the monthly HOA fee due from the trust for each year of the

trusts ownership from July of 2002 to the end of 2007, which is Baldwins spreadsheet.

TABLE A - - MONTHLY OBL HOA FEES FOR UNIT #207 7/02 12/07

MONTH 2002 2003 2004 2005 2006 2007

January $470.40 $470.40 $557.00 $557.00 $557.00

February $470.40 $470.40 $557.00 $557.00 $557.00

March $470.40 $470.40 $557.00 $557.00 $557.00

April $470.40 $470.40 $557.00 $557.00 $557.00

May $470.40 $470.40 $557.00 $557.00 $557.00

June $470.40 $470.40 $557.00 $557.00 $557.00

July $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

August $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

September $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

October $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

November $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

December $470.40 $470.40 $470.40 $557.00 $557.00 $557.00

Year Bal $2,822.40 $5,644.80 $5,644.80 $6,684.00 $6,684.00 $6,168.00

Run Bal $2,822.40 $8,467.20 $14,112.00 $20,796.00 $27,480.00 $34,164.00


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According to Baldwins special assessment tab, the special assessment was $9,450.00with total interest of $609.76 charged to the account for a total of $10,059.76.

The special assessment and interest of $10,059.76 combined with the $34,164.00 in

monthly HOA payments provides a total of $44,223.76.

TABLE B - - ANNUAL PAYMENTS/CREDIT FOR UNIT #207 7/02 12/07

2002 2003 2004 2005 2006 2007Developer/Closing

Credits $3,951.36

Trust/MLTC Payments $5,453.15 $7,619.68 $9,864.08 $15,700.34 $13,588.09

Since 2005, both the trustees and Mr. Lavalle have been seeking evidence from OBL thatthe developer paid the agreed upon HOA fee incentives and that their account was

properly credited. Prior to Baldwins report, neither the trust or Mr. Lavalle everreceived ANY documentation of such credits or ANY transactions from 7/1/02 to5/10/04.

From July 2002 to February 2008, almost $15,000 in payments by and credits to thetrust for unit #207 were unaccounted for to the trustees and its beneficiaries. OBL hadstated that OBL accounting records for this period had been destroyed. This is furtherevidenced by OBLs own minutes and records that show in 2003, OBL retained anindependent accountant named Charles Bailey to audit the books and records of OBLsince its inception to transfer over to the membership from the developer.

The auditor was met with great resistance and a lack of records and documents and wasunable to complete his audit over a two-year period. The only thing that the trustees, infulfilling their fiduciary duty to the beneficiaries requested, were records to audit theiraccount and determine their lawful obligation to OBL.

Instead of simply providing the trustees and their agents the proper documentation, OBLand its lawyers went on to create additional abuses to fraudulently manufacture adefault in attempt to illegally foreclose on the trusts unit. This is evidenced by a reviewof the records currently available.

OBL and its lawyers provided dozens of copies of transaction histories to the trustees andits agents from December 2005 to December of 2007, with not one history showing ANYcredits, charges, debits, payments, or transactions from July 1. 2002 to February 10,2004!

A spreadsheet cannot be relied upon as an accurate business record and due to theenormity of the discovered variances, frauds and abuses identified in this spreadsheet andother records, a proper and final audit cannot be accomplished until all underlyingsupport documents, ledgers, cancelled checks, bills, invoices, payment records, registers,


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formulas and spreadsheets for underlying allocation assumptions are provided for review,analyses and audit.

However, accepting the auditors assertion prior to confirmation and validation, itappears that $3,951.36 was provided to the account in credits by the developer or

payments from closing. An analysis of the closing documents is necessary to ascertainthe final correct figures.

A review of the facts and figures provided by the Merrill Lynch Trust Company showsthat between 2003 and the end of 2007, a total of $52,225.34 was paid by MLTC to OBLand its agents for amounts due for HOA fees, special assessments, and any late feesproperly incurred only. None of this money was to be applied to any fines, legal fees,utility fees or other charges since they were all in dispute. A request of MLTC has beenmade to obtain copies of the cancelled checks so as to validate and verify the amounts inthe above tables.

In total, from July of 2002 when Unit #207 was purchased by the trust to December 31,2007, the date of the Auditors spreadsheet, a total of $56,176.70 was paid or credited tothe trusts account for HOA fees and the special assessment. Baldwins spreadsheetreflects total payments and credits of $56,527.58. This leaves an unreconciled varianceof $350.88. Until final payment documents are obtained, we cannot resolve thedifference.

TOTAL PAYMENTS/CREDITS: $56,176.70

MINUS (-)

TOTAL HOA FEES (12/07): $34,164.00

TOTAL SPEC ASSESSMENT/INT: $10,059.76

TOTAL VARIANCE: $11,952.94

Almost two-years worth of HOA fees ($11,952.94) have been unlawfully and wrongfullymisapplied to fraudulent utility bills, fines, assessments and other fees.


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ERRORS IN BALDWIN REPORT & ASSUMPTIONS

(HOA FEE TAB)

OBL MISAPPLICATIONS

Baldwin glosses over several transactions without questions and accepts utilities fees andother misc. charges without underlying support documentation that have nothing to dowith HOA fees and special assessments. This tab is for HOA fees and Baldwin makes noexplanation as to the legitimacy, accuracy or propriety of these fees being listed inrelationship to HOA fees.

Late fees and their propriety will be discussed later, but in this section a discussion ofunrelated charges, fees, and misapplications will be addressed. The following Table Cdetails fees and transactions

TABLE C - - WRONGFUL TRANSACTIONS 7/02 1/08

DATE TRANSACTION AMOUNT PURPOSE FOR REMOVAL

4/2/03 Utilities $652.31 Service Not Provided/Other Utility Tab

4/10/03 Water Extraction $100.00 $100.00 Charge Paid In Cash

4/10/03 Water Extraction $100.00 $100.00 Double Charge/Paid In Cash

7/11/03 Maintenance $60.00 Unknown Expense/Unsupported

4/7/04 Maintenance $5.00 Unknown Expense/Unsupported

8/4/06 Clean Up $150.00 $50.00 Quote/Lavalle Personal

11/30/06 Attorney Fees $1,233.98 Disputed/Collusion

3/26/07 Attorney Fees $270.00 Disputed/Collusion

3/26/07 Collection Cost $19.50 Disputed/Collusion3/26/07 Lien Fees $10.00 Disputed/Collusion

6/8/07 Attorney Fees $49.20 Disputed/Collusion

1/8/08 Attorney Fees $5,000.00 Personal Fees Grenuk

Each of the above charges were unauthorized, improper and/or not the responsibility ofthe trust.

OBL UNJUSTIFIED LATE FEES

Baldwin does not describe the basis for late fee assessment. He does not analyze invoicesand the billing practices of OBL. Until December 26, 2007, the majority of OBLs bills,invoices and account statements were in the name of Nye Lavalle, not the trust, as is alegal requirement. Both Lavalle and the trustees demanded that OBL send statements inthe trusts name to MLTC.

In order to fulfill its fiduciary duties, the trustees required OBL to send them a monthlyor quarterly bill and invoice. The trustees also agreed to pay OBL in advance, if OBL


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would simply comply with the normal business requirement that the trustees needed aninvoice to authorize payment to OBL. There was never an issue of authorization until2005, when utility bill demands in excess of $2,500 were made upon the trust and thetrustees required an audit.

Without the dated invoices as well as terms that were stated on the invoices, no one canmake a determination as to when such invoices were due. Also, if invoices, as manytimes was the case, were not sent at all or on time, the trustees nor the trust can beresponsible for late fees.

In one Baldwin comment, he states that OBL could have assessed a late fee on or aboutNovember of 2002. Yet, it was not yet the trusts responsibility to make payments thenand the developer was responsible for the purchase incentive HOA payments and as suchthe trust could not be responsible.

Add to this the myriad of misapplications, unlawful charges, fines, and assessments being

wrongfully accounted for and charged, there must be a total recalculation of payments,credits, debits, and balances as well as review of the timely mailing of invoices todetermine if there were any delays or OBLs non-compliance with trust procedures thatled to delays in payment.

Total late charges claimed by OBL in Baldwins report totals $1,902.42.

OBL UNLAWFUL ASSESSMENTS & FINES

Baldwin describes various transactions that he takes from OBLs source documents. Yet,he overlooks obvious questions. For example, did OBL properly, lawfully, and

reasonably assess fines, assessments, and other charges? What underlying support forthose charges did he review? What legal opinions did he obtain? If the fines andassessments unlawfully and unreasonably assessed were not lawful and must be removedfrom the account, then each transaction must be adjusted, even if one dollar wouldchange the entire balance claimed owed.

ERROR & FRAUD ONE - - UNLAWFUL NUISANCE FINES

OBLs fining authority is contained in Article V of the OBL Bylaws:

ARTICLE VRule Making & Enforcement

Section 1. Authority and Enforcement. The Condominium shall be used only forthose uses and purposes set out in the Declaration. The Board of Directors shall have theauthority to 1) make, modify, repeal, and enforce reasonable rules and regulations 2) governing the conduct, use, and enjoyment of Units and the Common Elements; 3)provided, copies of all such rules and regulations shall be furnished to all Owners and


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Occupants. Any rule or regulation may be repealed by the affirmative vote or writtenconsent of a Majority of the total Association vote at an annual or special meeting of themembership. Every Owner and Occupant shall comply with the Declaration, Bylaws andrules and regulations of the Association, and any lack of compliance therewith shallentitle the Association and, in an appropriate case, one or more aggrieved Unit Owners,

to take action to enforce the terms of the Declaration, Bylaws or rules and regulations.

The Board shall have the power to impose reasonable fines, which shall constitute a lienupon the Owners Unit, and to suspend an Owners right to vote or to use the CommonElements for violation of any duty imposed under the Declaration, these Bylaws, or anyrules and regulations duly adopted hereunder; provided however, nothing herein shalllimit ingress or egress to or from a Unit. In the event that any Occupantof a Unitviolates the Declaration, Bylaws, or a rule or regulation and a fine is imposed, notice

of such violation shall be sent to the Owner and Occupant, and the fine shall first be

assessed against such Occupant, provided, however if the fine is not paid by the

Occupant within the time period set by the Board, the Unit Owner shall pay the fine

upon notice of the Association, and the fine shall be an assessment and a lien againstthe Unit until paid. The failure of the Board to enforce any provision of the Declaration,Bylaws, or any rule or regulation shall not be deemed a waiver of the right of the Boardto do so thereafter.

Therefore, in order for ANY rule to be in effect and be lawful, OBL would have had tofollow these steps:

1) Create a new rule;2) Rule must govern conduct on Common Elements it found objectionable;3) All owners and residents must be informed of the new rule.

If the above steps were not followed in creating the rule, then the rule is unlawful andunenforceable. You cannot selectively target one individual for a rule. If the rule isenforceable and then broken, then a set of due process steps are necessary for the fine tobe lawfully assessed to a unit when the violator is an occupant. The following steps mustbe followed prior to the ability of the association to assess a fine:

1) Occupant actually violates rule;2) Written notice of violation sent to both occupant and owner;3) Notice must contain the following information:

a. Amount of fineb. Time fine must be paid byc. Right to appeal fine to board of directors

4) Only if the fine is not paid by the occupant, can it then be assessed to theowner.

Below are additional conditions precedent before OBL may impose fines:


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Section 2. Fining and Suspension Procedure. The Board shall not impose a fine,suspend the right to vote or suspend the right to use the Common Elements (provided,however, if an Owner is shown on the books or management accounts of the Associationto be more than thirty (30) days delinquent in any payment due the Association,suspension of the right to vote and the right to use Common Elements shall be automatic;

provided further, however, suspension of common utility services shall requirecompliance with provisions of Paragraph 10 (c) (v) of the Declaration, where applicable),unless and until the Association has sent or delivered written notice to the violator asprovided in subsection (a) below. Any such fine or fines may be effective or commenceupon the sending of such notice or such later date as may be set forth in such notice,notwithstanding the violators right to request a hearing before the Board to challengesuch fine under subsection (b) below.

(a) Notice. If any provision of the Declaration or Bylaws or any rule or regulation ofthe Association is violated, the Board shall send the violator written notice identifying theviolation and fine(s) being imposed and advising the violator of the right to request a

hearing before the Board to contest the violation or fine(s) or to request reconsiderationof the fine(s). Fine(s) may be effective or commence upon the sending of such notice orsuch later date specified in such notice, notwithstanding the violators right to request ahearing before the Board to challenge the fine. In the event of a continuing violation,each day the violation continues or occurs again constitutes a separate offense, and finesmay be imposed on a per diem basis without further notice to the violator.

(b) Hearing. If a written request for hearing is received within ten (10) days of thedate of the violation notice provided above, then the Board shall schedule and hold inexecutive session a hearing affording the violator a reasonable opportunity to be heard.The minutes of the meeting shall contain a written statement of the results of the hearing.The Board may establish rules of conduct for such hearing, which may include limits ontime and on the number of participants who may be present at one time.

The bylaws speak for themselves and each board member is required to follow to theletter of the bylaws the provisions for requisite notice and the due process steps thatmust be followed in order for a fine to be valid, thus legal under Georgia 44-3-76.

Each owner, occupant, and board member is to comply with the provisions of the OBLDeclaration and bylaws under this law. OBL and each board member are in violation ofthis law.

While the bylaws speaks for itself, the Court and counsel in this case may wish to analyzewhat their their prior law firm, where Mr. Johanson and Lezaga were employed, has tosay on the subject of fines by a white paper titled And Now A Few Words About Finesfound at http://www.wncwlaw.com/news/whitepapers/details.cfm?id=14 and attached asExhibit G to this report.

Paragraph 2. of this paper states with specificity the measures that must be taken in orderto assess and collect a fine. Many of the demands for fines of the trust came from OBLs


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own prior law firm that wrote this paper. They and their current and past counsel arefully aware of the law and the exact provisions OBL must follow to properly assess andcollect a fine from any occupant or the owner. Failure to follow these provisions, makethe fine invalid under the law and unlawful if you take measures to collect upon aninvalid fine as counsel for OBL has done.

Without a vote of the entire membership to amend the bylaws and declaration, the OBLboard took actions to strip Lavalle and the trust of the rights afforded to them by thesedocuments and in violation of the Declaration of Condominium, Bylaws (CondoInstruments) and the GA Condo Act that governs such fines.

OBL and their counsel violated the due process rights afforded by the condo instrumentsand law that I, as well as the trust, were and are entitled to under GA law and the bylaws.OBL has a right to create reasonable rules and regulations as stated in the condodocuments. However, the rules and regulations they create must be created to apply to allmembers, occupants, and owners and not just specific individuals and must be supplied to

each and every member and occupant until they become effective.

If a rule that said members and occupants when dealing with the board or propertymanagers must comply with a certain amount of decorum and behave in a certainmanner, then OBL may have a right to fine members and occupants. Then, only if theviolator was properly noticed; he did not appeal or OBL heard an appeal and rejected it;and an occupant refused to pay a fine, could the fine be assessed fine against an owner.

Next, the fines described in the February 22, 2007 letter to the trust (Exhibit H) invokedParagraph 15 (f) of the Declaration of Condominium under the nuisance provision. Itquoted that the board, in its sole discretion, determined that the beneficiary, Nye Lavalle,had conducted noxious, and offensive activity on the Condominium, and through physical acts, statements, written documents, and e-mails, he has unreasonablythreatened, annoyed, disturbed, and caused considerable discomfort to employees andseveral owners of the Condominium, and he has interfered in the process of managing theCondominium.

Out of thousands of pages of evidence provided in litigation, no form of communicationshas been produced in litigation or provided anyone that claims Lavalle threatened,annoyed, disturbed, and caused considerable discomfort to employees and several ownersof the Condominium. A list of owners who complained of his conduct and claimed that itinterfered with their enjoyment of the Condominium must be provided.

However, the evidence supports that the management and board of OBL began this evenmore aggressive campaign of harassment against Mr. Lavalle and his trust after Mr.Lavalle caught Mr. Grenuk swearing at and berating a concierge when Lavalle came tothe desk to pick a package up. (Exhibit I).

Mr. Lavalle told Mr. Grenuk to stop your abuse fat boy whereupon Mr. Grenukaggressively moved towards Lavalle with fists clenched and got into his face and asked


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Lavalle to say it again. Lavalle placed his hands behind his back and said it again, stopyour abuse fat boy and challenged Grenuk to hit him calling him a man with a smallpenis complex and a bully who Mr. Lavalle was not afraid of. Lavalle immediately wentto the management office to request that the videotape be preserved. (Exhibit J)

Grenuk again made a move towards Lavalle when Kevin Young, the concierge came intothe room and prevented Grenuk from striking Lavalle. Young convinced Lavalle to leavethe room and Lavalle later made a police report with Atlanta police against Mr. Grenuk.(Exhibit K)

Mr. Grenuk or Mr. Jarrett since they do not reside in the Condominium and so theirenjoyment and living could not be affected. Next, the board cannot assess a fine for thediscomfort of a board member, employee or manager who a member has a disagreementwith.

Mr. Grenuk, as documented by OBLs own employees, swore and demeaned a concierge

and then attempted to physically assault Lavalle that would seem to be a violation of thesame rule. (Exhibit I)

OBLs resolution, directed solely to Lavalle, attempted to prohibit him from speaking orcommunicating in any way with the property managers, building engineer, office staffand board members via phone, physical contact, instant messaging, or e-mails.

The board imposed a fine of $100 per incident, not per person.

Contrary to the boards nefarious and willful misinterpretation of Paragraph 15 (f) of theDeclaration of Condominium, deals with the use of the condominium and acts that woulddamage the value of such units related to complaints to the board by owners andresidents, commonly referred to as a public nuisance.

Sending e-mails cannot be deemed a nuisance. Coming into the property office tocomplain about physical assaults by a board member; booting or towing threats of autos by management; shutting off phone service; late night phone calls and harassing andrepeated phone calls from the management office; demands for payments in excess of therightful obligation; denial of personal responsibility for bills; complaining about waterbills that go from $15 to $30 a month to over $600 a month could be deemed to be anyact of nuisance or as you later claimed, stalking. Such claims are nefarious in nature andgo against all common sense.

Property managers and employees as well as board members who are confronted byowners and residents in opposition or protest to their wrongful acts do not constitute anuisance or stalking.

Next, if fines are imposed, according to the Declaration and Bylaws OBL must follow thedue process steps previously outlined above which they have failed to do in each and


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every occurrence. Counsel of OBLs prior law firm also, in no uncertain terms, states thesame legal conclusion when in writes in paragraph 2. of his white paper:

Is there a fining due process that must be followed? The bylaws for manyassociations, as well as some declarations, require that written notice be sent stating the

violation, the fine to be imposed, and that the violator has an opportunity for a hearing before the board of directors. There are several different versions of the fining due process procedure that might apply to a community. Some procedures, for example,provide that the fine shall not start until after the hearing, while other procedures permit afine to begin on the date of the violation notice.

If your associations bylaws or declaration include a fining due process procedure, thatspecific procedure must be followed in order for the fine to be valid.

If there is no fining due process procedure, boards are not required to provide ahearing. Nevertheless, many boards do provide a violator with an opportunity for a

meeting with the board because face-to-face meetings are often beneficial in attemptingto resolve the underlying violation that caused the fine to begin in the first place.

As such, every fine imposed must be taken off the books ($3,000.00) and the accountsreadjusted from that date forward and payments attributed to HOA fees, not anythingelse.

OBL UNLAWFUL WATER HEATER FINES & DEMAND

Baldwin overlooks the rational and justification about the imposition of water heaterreplacements fines. Consider the following facts and provisions of the OBL condo

instruments:

Fact # 1

The May 17, 2006 OBL Board Meeting Minutes reflect the following entry on page threewith reference to the heading of Insurance:

Insurance Ed meeting with insurance company on Monday to discuss requiringhomeowners to replace their hot water heaters (most units still have original hot waterheaters, which are nearing end of life). Potential savings in insurance premiums.

Fact # 2

The July 12, 2006 OBL Board Meeting Minutes reflect the following entry

Water heater burst on 10th floor and caused damage to floors below.


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Fact # 3

The October 17, 2006 OBL Board passed a resolution mandating that all OBL ownersreplace their water heaters at a cost of from $500.00 to over $2,400.00 without the input,knowledge, approval or vote of owners as required by the OBL Declaration.

Fact #4

Despite warnings by Mr. Lavalle of the liability of its actions, the OBL Boardintentionally ignored the warnings of Mr. Lavalle and violated the provisions of theDeclaration of Condominium that governs the relationship with each OBL homeowner bymandating that each homeowner replace its hot water heater without a vote ofhomeowners.

Page 31 of the Declaration under 18. (d) (i) and (ii) contains the following language:

(d) Measures Related to Insurance Coverage

(i) The Board of Directors, upon resolution, shall have the authority to require all orany Unit Owner(s) to do any act or perform any work involving portions of theCondominium which are the maintenance responsibility of the Unit Owner, which will, inthe Boards sole discretion, decrease the possibility of fire or other damage in theCondominium, reduce the insurance premium paid by the Association for any insurancecoverage or otherwise assist the Board in procuring or maintaining such insurancecoverage. This authority shall include, but not be limited to, requiring the Owners toinstall smoke detectors, requiring Owners to make improvements to the Owners Unit,and such other measures as the Board may reasonably require so long as the cost of suchwork does not exceed three hundred ($300.00) dollars per Unit in any twelve (12) monthperiod.

The resolution the OBL Board passed violates this provision of the Declaration in that thecharge for the work required, far exceeds the $300.00 provision. The OBL board passedthe resolution, despite the warnings of Mr. Lavalle, with the full knowledge that the OBL board was violating this provision and Georgia law and creating liability for allhomeowners.

The failure of the OBL board to follow the law and then further compound the situation by fraudulently assessing invalid fines to those that do not comply with the unlawfulassessment subjects the association to further legal liability and each homeowner topotential damages via assessments due to the boards willful and individual misfeasanceand malfeasance after sufficient warning!

Fact #5


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The OBL board, after dozens of warnings by Mr. Lavalle, instituted unreasonable andgrossly unfair fines and demands for such fines that constitute further fraudulent actionsby your board and violated other provisions of the Declaration.

The OBL board has fined homeowners from $100 to $400 per month

Paragraph 18. (d) (ii) reads:

In addition to, and not in limitation of, any other rights the Association may have, if anyUnit Owner does not comply with the requirement made by the board of directorspursuant to subparagraph (d) (i) above, the Association, upon fifteen (15) days writtennotice (during which period the Unit Owner may perform the required act or workwithout further liability), may perform such required act or work at the Unit Owners solecost. Such cost shall be an assessment and a lien against the Unit as provided herein.The Association shall have all the right necessary to implement the requirementsmandated by the Board pursuant to subparagraph (d) (i) of this Paragraph, including, but

not limited to, a right of entry during reasonable hours and after reasonable notice to theOwner or Occupant of the Unit, except that access may be had at any time without noticein an emergency situation.

Fact #6

The OBL board has fined homeowners tens of thousands in unlawful and fraudulent finesand has refused to remedy the situation. The fines are being counted on the associations books as income and revenue that is not warranted in order to give current, and moreimportantly, prospective homeowners the false impression that the associations booksare in good order.

Fact #7

Thus, the imposition of unreasonable fines is without merit. First, OBL violated theDeclaration and had no authority to make Owners install a water heater in excess of$300.00. Second, if the demand for new water heaters was less than $300.00, and thetrust still did not install the water heater in the unit, then OBL would be allowed to installone and then assess the cost to the trust. OBL has no right to fines, and you have a dutyto install such a water heater to protect other residents and owners.

OBL was informed in writing and in person that the association owed us money after thesizeable money paid to OBL and the utility company in Sept/Nov of 2006. There werethen and still are now substantial sums of money due [in excess of $10,000] due the trustand OBL was asked to credit the amount and pay for such installation.

Instead, OBL applied the money to other areas and utilities, not to the installation of thewater heater as requested. All water heater fines must be removed from the account andall other transactions, balances, credits, debits and figures tied or related to the waterheater fines must be adjusted from the date of imposition of the fine.


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ERRORS IN BALDWIN REPORT & ASSUMPTIONS

(UTILITY FEE TAB)

There are glaring facts, errors, and assumptions in Mr. Baldwins report that not onlysuggest fraud and abuse, but clearly prove it! He makes no mention of these issues andattempts to conceal others.

Table D reflects the amounts MLTC issued payments to the utility billing agents andlawyers for OBL. The trust and Mr. Lavalle dispute the validity of the bills and amountscharged due to the identified fraud and abuse. We await the provision of MLTCcancelled checks, meter readings, allocation formulas, spreadsheets, Georgia Powerinvoices, Atlanta Water invoices, AMS records, HMS records, WNCW and L&J memosand notations, and Viterra records in order to determine the accuracy and validity of theamounts listed below.

However, a comparison of the records provided herein to OBLs records shows acomplete disconnect and the fraudulent red flags present are extensive. While the HOAtab and special assessment tab for payments can be closely reconciled, the large variancesin the utility tab and their claimed loss of records are suspect.

The assumptions used by Baldwin starkly contrast the known records and documentationof not only the trust and MLTC, but of other owners and residents in the building. Inaddition, the assertion that all bills for water and electric prior to 9/24/04 were based onan unknown allocation formula and not metered, as contracted for and shown in theinvoices for that time period, conclusively proves that any reading or bill cannot beaccurately relied upon since the amounts were arbitrarily and falsely created!

Asterisks (*) indicate payments made by MLTC to OBL billing agents for utilities thatare not reflected or properly credited on Baldwins spreadsheet utility tab. A total of$2,697.43 in payments are missing from Baldwins spreadsheet.

TABLE D - - UTILITY PAYMENTS FOR UNIT #207 7/02 12/07

Date MLTC Payment Paid To Date MLTC Payment Paid To

1/21/04 $1,029.45* Viterra 1/21/04 $1,029.45* Viterra

2/24/04 $174.87* Viterra 2/24/04 $174.87* Viterra

3/16/04 $119.04* Viterra 3/16/04 $119.04* Viterra

4/15/04 $83.40* Viterra 4/15/04 $83.40* Viterra

5/20/04 $110.23* Viterra 5/20/04 $110.23* Viterra

6/16/04 $113.27* Viterra 6/16/04 $113.27* Viterra

7/16/04 $117.14* Viterra 7/16/04 $117.14* Viterra

8/11/04 $124.68* Viterra 8/11/04 $124.68* Viterra

9/1/04 $0.00 9/1/04 $0.00

10/1/04 $0.00 10/1/04 $0.00

11/5/04 $294.23 AMS 11/5/04 $294.23 AMS

11/18/04 $265.93 AMS 11/18/04 $265.93 AMS


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12/8/04 $156.35 AMS 12/8/04 $156.35 AMS

1/19/05 $70.96 AMS 1/19/05 $70.96 AMS

$0.00 AMS $0.00 AMS

3/15/05 $123.84* AMS 3/15/05 $123.84* AMS

3/24/05 $343.80 AMS 3/24/05 $343.80 AMS

6/13/05 $354.16 AMS 6/13/05 $354.16 AMS

7/15/05 $201.04 AMS 7/15/05 $201.04 AMS

8/19/05 $170.88 AMS 8/19/05 $170.88 AMS

9/20/05 $240.38 AMS 9/20/05 $240.38 AMS

12/30/05 $462.50 AMS 12/30/05 $462.50 AMS

1/10/06 $136.97 AMS 1/10/06 $136.97 AMS

10/23/06 $1,000.00 AMS 10/23/06 $1,000.00 AMS

11/15/06 $2,039.69 WNCW 11/15/06

3/23/07 $701.51* AMS 3/23/07 $701.51* AMS

8/2/07 $2,470.99 WNCW 8/2/07

$10,905.31 $6,394.63

MAJOR ERROR & FALSE ASSUMPTION ONEUtility Payments 7/02 to 9/04

First, Mr. Baldwin states in his report that he prepared tabs on this spreadsheet for theassociation fees and the utility fees since they were tracked on separate sourcedocuments.

In reality, they were tracked on separate source documents and the most importantdocuments of all, the utility invoices, schedules, payments, histories, meter readings, andbilling documents from July 1, 2002 until September 24, 2004 are not available and theorganizations performing the utility billing at that time are not able to produce the

documentation.

Recall, the major allegation is that the trust and other owners were falsely andfraudulently billed for metered utility usage that never occurred. Baldwin made no effortwhatsoever to analyze the invoices or requested invoices from the trust that showed meterreadings.

He also claims to have used utility register from unit #1706 from 12/99 to 12/2008 butdoes not indicate if this was an OBL document, a billing agent document or a document,such as a spreadsheet, created by the owner of #1706. Such a document, if not part of thegeneral business records of the association or billing agent is not reliable.

Mr. Baldwin is correct in that there should be a separate tab for utilities and HOA feessince they are different tracking accounts and the trust and Lavalle have been separatelybilled for such services and fees.

However, without source documents, Baldwin simple asserts This information was usedto extrapolate a monthly utility billing for Unit 207. Based on this information and my


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analysis, unit 207 was billed the same utility amount per square foot as unit 1706 duringthe period when utilities were allocated.

Again, this is another false statement and assumption. MLTC has provided the trusteesand Lavalle with documents showing the amounts they were billed and the amounts they

paid to Viterra during this time-period. Mr. Baldwin made no attempt to solicit thisinformation from Viterra or the trust, prior to his false statement. In fact, evidence asprovided in the table below conclusively proves that Mr. Baldwins entire spreadsheet tabfor utilities is not only in error, but fraudulent in order to conceal his clients financialfrauds and abuses.

The following Table E is a table that compares Baldwins extrapolated figures due tothe unavailability of OBL records to the actual and real records maintained by theMerrill Lynch Trust Company.

TABLE E - - MLTC PAYMENT COMPARISON TO BALDWIN ASSUMPTIONS

Date MLTC Payment Paid To Balwin Tab Difference

1/21/04 $1,029.45 Viterra $80.75 $948.70

2/24/04 $174.87 Viterra $107.07 $67.80

3/16/04 $119.04 Viterra $132.40 ($13.36)

4/15/04 $83.40 Viterra $96.57 ($13.17)

5/20/04 $110.23 Viterra $124.93 ($14.70)

6/16/04 $113.27 Viterra $124.93 ($11.66)

7/16/04 $117.14 Viterra $146.24 ($29.10)

8/11/04 $124.68 Viterra $143.01 ($21.56)

9/1/04 $448.58 ($448.58)

Thus, every figure contained on Baldwins spreadsheet and creating an ending utilitybalance of $12,528.31 must be adjusted from 7/1/02 to 9/24/04.

Accordingly, all transactions, balances, credits, debits, and figures tied to this transactionmust be adjusted from the date of payment receipt and all balances after this date aremisstated, false and fraudulent.

MAJOR ERROR & FALSE ASSUMPTION TWO

Utility Payments 7/02 to 9/04

Additionally, Mr. Baldwin just accepts the numbers taken from 1706s register withoutseeking additional information from other units in the building. The bills shown inExhibit L are from another homeowner in the building and are for Unit #1507, which hasonly 1567 sq feet.


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The calculations and allocations created by Mr. Baldwin are in stark contrast to thebills in Exhibit L and shown in Table F below.

TABLE F - - Unit #1507 COMPARISON TO BALDWIN ASSUMPTIONS

DatePaymentDue

Baldwin Calc#1507

Baldwin Tab#207

Bill/CalcDifference

8/7/02 $58.11 $172.37 $199.47 $114.26

9/9/02 $64.44 $188.04 $223.51 $123.60

10/7/02 $61.58 $172.37 $204.04 $110.79

11/7/02 $49.47 $329.07 $377.50 $279.60

1/9/03 $74.47 $141.03 $161.00 $66.56

2/7/03 $58.94 $156.70 $172.84 $97.76

While the above Baldwin tab figures would have to be adjusted for the difference insquare feet of 237 sq. feet, Baldwins figures are again far in excess of comparable and

identical billings and shows yet OBLs continued attempt to deceive, defraud and concealtheir financial abuses. The figures in Table F are from 50% to 300% above to paymentsdue, if any, in the identical timeframe.

Accordingly, all transactions, balances, credits, debits, and figures tied to thesetransaction must be adjusted from the date of payment receipt and all balances after thisdate are misstated, false and fraudulent.

MAJOR ERROR & FALSE ASSUMPTION THREE

Utility Metered Use & Payments 7/02 to 6/03

In his spreadsheet, Baldwin reports a total of $2,133.22 due for utilities from 7/1/02 (dateof purchase) to 5/31/03 (date of occupancy by Lavalle). Immediately upon closing, a one-year demolition and renovation process occurred.

No one occupied the unit until June of 2003. All water and electric fixtures wereremoved, including electrical outlets. THERE WAS NO WATER OR ELECTRICSERVICE UNTIL MAY OF 2003 BEFORE MOVE IN. There were no toilets, sinks,wash basins, showers, tubs, heat, air conditioning, washing machines etc until Springof 2003 when those were installed.

The contractor used battery operated tools in day time as well as on occasion, long orangelines tied to neighbors and hallway electric outlets and even had to bring in lights towork. Upon closing, GDPT was told in person and in condo documents that utilitieswere metered. At closing, OBL and the developer were instructed that Nye Lavalleand his family would occupy the unit on a seasonable basis and were the occupants of theunit.


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Mr. Lavalle was residing in another unit during renovation and received a bill fromViterra for utility usage. He did not know if the bill was intended for the unit he wasliving in at that time or the new unit which had no power or water. The bill was meteredso Lavalle contacted both Vittera and OBL management to disclose that he was notresponsible for the bills for the unit he was living in since his agreement included utilities

and that the other unit, did not have any occupancy, water, or electricity. He was told bymanagement and Viterra to inform them when he moved into the new unit and it wasoperational. Lavalle did so with OBL management in June of 2003 and also gave themadditional instructions to bill the trust.

The contractors may have turned on the water on a couple of occasions to mix, but thatwas done in the Spring of 2003 between March and May when the renovation wascompleted.

Thus, $2,133.22 minus perhaps $50 usage based on other bills need to be reflected inOBLs utility demands and subtracted from Unit 207s records.

MAJOR ERROR & FALSE ASSUMPTION FOUR

Utility Payments Being Taken From HOA Payment On HOA Tab

Mr. Baldwin states in his report that he prepared tabs on this spreadsheet for theassociation fees and the utility fees since they were tracked on separate sourcedocuments.

In reality, they were tracked on separate source documents and the most importantdocuments of all, the utility invoices, schedules, payments, histories, meter readings, andbilling documents from July 1, 2002 until September 24, 2004 are not available and the

organizations performing the utility billing at that time are not able to produce thedocumentation.

However, Mr. Baldwins HOA tab shows two transaction for utilities in the amount of$652.31 as of 4/2/03 and $123.84 on 3/21/05 for a total of $776.15 that must be taken offthe HOA spreadsheet tab and all balances, calculations, and figures adjusted accordingly.

Neither Lavalle or the trust know why money paid by the trustees for HOA fees werededucted for utilities that did no exist and were not to exist until May of 2003. It ispossible that the developer, who had a dispute with Lavalle, placed his utilities onto theaccount of the trust.

In any event, you cannot have figures for the same time frames, whatever thosetimeframes are, on both the HOA tab and the utility tab and thus the HOA tab must beadjusted accordingly since payments were made to OBL for HOA fees and assessmentsonly and to the billing agents for utilities only.


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Accordingly, all transactions, balances, credits, debits, and figures tied to this transactionmust be adjusted from the date of payment receipt and all balances after this date aremisstated, false and fraudulent.

MAJOR ERROR & FALSE ASSUMPTION FIVE

Set Up Transfer From Viterra to AMS


On the utility tab at transfer from Viterra to AMS, Baldwin shows for the 9/04 transactionthat $65.90 was applied for a July Charge when Vittera was paid for July andBaldwins spreadsheet shows an assumed payment of $146.24 for the same date.

Furthermore, there is an unexplained $215.60 setup charge that is not reflected I any prior

balance and there is no explanation of an adjustment or change. The total of $65.90 plus$215.60 for a total of $281.50 must be credited to the Trusts account and allcorresponding, figures, balances, credits, debits and transactions tied to these figureadjusted.

The $215.60 is later credited as a payment, rather than adjustment with no explanation forthe transaction.

MAJOR ERROR & FALSE ASSUMPTION SIX

$123.84 Payment To MLTC On 3/25/05


On the utility tab at March, 2005, a balance transaction of $123.84 is shown when inreality this was a payment made on or about 3/15/2005 that is not reflected

Accordingly, all transactions, balances, credits, debits, and figures tied to this transactionmust be adjusted from the date of payment receipt and all balances after this date are falseand misstated.


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MAJOR ERROR, FRAUD & FALSE ASSUMPTION SEVEN

$1000 Payment To AMS On 10/23/06 & $2,039.69 Payment on

11/15/06 Misapplied & No Breakout Of Application


On the utility tab at November, 2006, a payment to AMS in the amount of $1000 wasmade by the trust. This payment was made by MLTC on or about 10/23/06 and was notcredited or applied by OBL to its account.

OBL and its law firm two weeks later demanded $2,039.69 at threat of foreclosure whenin fact $1000.00 was paid and the trust was disputing the remaining balance until OBLcould provide the method, formulas, and allocations used to determine proper payments.

The additional $2,039.69 was part of a $14,586.34 payment made to OBLs lawyers on11/15/06 and $2,036.69 was taken by OBL and the auditor and applied to utilities tocreate a credit balance when the Trust was disputing all payments and charges forutilities.

However, this payment was not even credited until January of 2007, almost two fullmonths after payment. Even with the misapplication, and using AMS and OBLs figures,the balance for the trusts utility account should reflect a $1000 credit balance as ofNovember, 2005.

Instead, balances from $1,039 to as high as $1,536.32 are shown for November andDecember of 2005.

Additionally, this money should have been attributed to the HOA account as governed bythe condo docs and $500.00 of this money was directed by the trust in December of 2006to be applied to the installation of a new water heater for unit #207.

Accordingly, all transactions, balances, credits, debits, and figures tied to this transactionmust be adjusted from the date of payment receipt and all balances after this date are falseand fraudulent.

MAJOR ERROR, FRAUD & FALSE ASSUMPTION EIGHT

No Data Or Entry For March Of 2007 & $701.51

Mr. Baldwin states in his report that he prepared tabs on this spreadsheet for theassociation fees and the utility fees since they were tracked on separate source

Mr. Baldwin has diligently prepared tabs for every month of the trusts ownership fromJuly, 2002 to December of 2007. However, with no explanation at all, Mr. Baldwin does


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not only leave a row for March 2007 transaction out, but ignores a $701.51 payment toAMS when the balances shown are zero and the remainder of the over-demanded andmisapplied $2,039.69 is somehow miraculously zeroed out.

It can only be assumed that the $701.51 was paid to prior months utilities that are zero

and shows yet once again, a fraudulent scheme as well as inability for OBL to account forits transactions.

Accordingly, all transactions, balances, credits, debits, and figures tied to this transactionmust be adjusted from the date of payment receipt and all balances after this date are falseand fraudulent.

MAJOR ERROR, FRAUD & FALSE ASSUMPTION NINE

2000% Fraudulent Markup & Making Up Of Utilities Never

Delivered

Mr. Baldwin states in his report that he prepared tabs on his spreadsheet for theassociation fees and the utility fees since they were tracked on a separate source.

The trust and Mr. Lavalle have not only accused OBL, its management and board ofracketeering, fraud, deception, and discrimination, but also of retaliation for Lavallesdiscovery of various discrimination practices of the OBL board and their frauds over theyears.

In the Spring of 2007, OBL began reading its newly installed electric meters. They alsocreated a kickback scheme to have its billing agent return a portion of its $6.00 billingfee.

Lavalle accused OBL and Grenuk of racketeering and the following transaction provide amajor red flag for abuse and fraud that Baldwin not only sanctioned, but concealed viahis eliminating any transactions for March of 2007.

Unbeknownst to OBL and Baldwin, AMS sent Merrill Lynch Trust Company an invoicefor water bills for the billing period of 3/6/07 to 4/6/07 and billed on 4/27/07. The billattached as Exhibit M claimed a total of $8.84 for water usage and $21.40 for sewer costand a $6.00 billing fee for a total of $36.24.

Yet, OBL on its own with its lawyers and HMS continue to harass and defraud Lavalleand the trust. As indicated by Baldwins spreadsheet and the attached HMS report inExhibit N, OBL charged the trust over a 2000% markup on any water usage that the trustwas obligated to. In addition, the $701.51 paid to AMS is not applied anywhere.

OBL does not sent the trust any bills or statements regarding this fee, but instead sue forforeclosure to collect this unlawful and fraudulent amount. The following tables andcharts illustrate the mail and wire frauds committed by OBL.


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TABLE G - - Unit #207 UTILITY BILLING FRAUD PROOFS

Utility AMS Invoice OBL/Baldwin OBL/Baldwin OBL/Baldwin

Breakout March Usage March Usage April Usage May Usage

April, 2007 April, 2007 May, 2007 June, 2007

Water $8.84 $141.13 $179.12 $178.29

Sewer $21.40 $361.68 $459.03 $456.92

Electric $152.64 $113.67 $57.51

Water Base $0.41 $0.41 $0.41

Homeland

Water Service $6.00 $6.00 $6.00 $6.00

Heater Fine $100.00

Common Area

Total $36.24 $661.86 $858.23 $699.13

No professional accountant could see such a 2000% spike in a utility bill for three monthsand not question the validity, truthfulness, and accuracy of such an entry withoutcomment or notice. Such a spike is a red flag for fraudulent accounting!

ERROR & FRAUD #1 IN HOA FEE TAB

$652.31 Utility Charge On HOA Tab On 4/2/03 & $123.84 On

3/21/05

Mr. Baldwin states in his report that he prepared separate tabs on his spreadsheet for theassociation fees and the utility fees since they were tracked on separate sources. Mr.

Baldwin has separated utility costs and payments onto one tab and HOA fees andpayments on another.

Clearly marked on the HOA tab for 4/2/03 is a payment of $652.31 for utilities on 4/2/03.Regardless of the fact that there were no utilities in the unit at that time and no one livingthere, if in fact there was such usage, Mr. Baldwin could not simply place an extrapolatedfigure in the utility tab and allow this figure to be placed in the HOA tab.

Furthermore, Mr. Baldwin states in his report that OBL could not provide facts andfigures for amounts prior to 9/24/04, yet there are two entries in the HOA tab for utilities.This would be an obvious lie and red flag to any professional accountant who states in his

report that he has to extrapolate figures for this time period.

However, one time period Mr. Baldwin does not need to extrapolate is the transaction on3/21/05 that was paid to Viterra by MLTC with on 3/15/05. This transaction is reflectedon both Mr. Baldwins HOA tab as a charge and payment and only as a charge on hisutility tab.


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Obviously, this should have been a red flag for Mr. Baldwin to ask further questions.Accordingly, all transactions, balances, credits, debits, and figures tied to thesetransactions must be adjusted from the date of charges and payment receipt and allbalances after this date are misstated, false and fraudulent and cannot be relied upon.

FINAL CONCLUSIONS & STATEMENT

Except for the total amount due for HOA fees, special assessments approved, andpayments, very little of Baldwins report and spreadsheet can be relied upon. A completerecalculation with valid new assumptions and facts must be created to balance theaccount properly and accurately reflect the transaction history.

Then, all documents sent to the trust and Lavalle must be time-lined against the followingdocumentation to create monthly/yearly comparisons and to illustrate the frauds andmisrepresentation from month-to-month.

For example, Jarretts letter of 6/14/06 would be time-lined against other sourcedocuments and spreadsheets as follows:

DOCUMENT Demand

Baldwin

S/S Clean S/S

6/15/06

History

Jarrett 6/14/06 Letter $9,645.25 $4,295.78 $2,564.31 $4,295.78

Payment Demand Off $0.00 $5,349.47 $7,080.94 $5,349.47

Final Approved/Accepted Accounting, compared for variances against:

Baldwin Spreadsheets AMS Histories Viterra Histories HMS Histories & Records Brennan/Goddard Accountings Jarrett Spreadsheets, Communications, & Affidavits Grenuk Testimony & Communications OBL Communications, Bills, & Records Lawyer Demands & Records

After each are time-lined, exhibits of the over-demands and extortionate attempts atpayment would be illustrated.

Suggested additional timelines include:

Trust/Lavalle Dispute Communications Timeline Utility Invoice Timeline Lawyer Demand Timeline OBL Demand Timeline HMS Demand Timeline


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Final source documents, cancelled checks, invoices, bills, worksheets, spreadsheets,notes, assumptions, and underlying documentation could then used by the forensicauditor to reconcile the account according to various assumptions for the court and jury tosee.


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Meridian Fraud Report

Documents

Transcript of Meridian Fraud Report