Folder F

Folder F (for documents showing the financial impact)

Financial documents (to the extent available) show

more than $3.5 million has been collected by those who have misrepresented the terms of the LLPOA's charter and engaged in other documented frauds, plus
more than $3.5 million has been received by individuals from criminal activities (including fraud and criminal intimidation) which has been misreported as being attributable a corporation which owns easement property.

Absence of Transparency
All honestly-operated corporations that have been chartered for nonprofit purposes should readily make their minutes and financial records readily available to their members. Following that principle is more than just a good policy. Anyone can see that when a corporation is formed under the Illinois General Not For Profit Act, transparency it is required by 805 ILCS § 105/107.75.[1]

A policy of having transparency is a good one because it allows members to determine whether money collected in the name of a nonprofit corporation has been used to buy personal items, such as personal computers, cell phones, etc. Transparency also allows members to determine the extent to which nonprofit money has been transferred to persons related to officers and directors, such as teenage children, and their friends and adults who support them. When there is transparency and money transfers are discovered to have been made for such purposes, members can ask legitimate questions, and question whether money transfers were legitimate.

The participants in this scheme have created and mailed newsletters which they designate as minutes. Bona fide officers and directors of nonprofit corporations are required to keep minutes and make them available to their members.

Article V, Section 2 of the LLPOA’s bylaws requires the minutes to include “an itemized listing fully identifying all expenditures authorized and approved at each meeting.” It’s not a valid excuse for anyone to say that there is not enough room in the minutes for that. They can use more paper. It’s also not a valid excuse, when a request for access to information is made by someone who has paid so-called dues, for any “treasurer” to say that they are too busy. Or for them or any other “officer” to give any other excuse.

A review of the minutes from January 1997, for example, shows that the Article V, Section 2 disclosure requirement was not met. A review of other minutes will show that the participants in this scheme never intended to comply with the disclosure requirement. Pick any newsletter/minutes that you want. No CPA could audit the LLPOA’s financials based upon the financial information in the minutes. From time to time, spouses of LLPOA “officers,” “directors,” other persons who have received money transferred from LLPOA bank accounts have purportedly reviewed and approved the LLPOA’s financial information. If no CPA could audit the LLPOA’s financials based upon the financial information in the minutes, the husbands and/or wives (or friends) could not legitimately do so either.

A review of the full-text minutes (or newsletter/minutes) from 2008 will show that I repeatedly attended meetings held in the name of the LLPOA in the early part of 2008. I attended for the purpose of asking to have access to the earlier minutes and financial information. Instead of receiving cooperation, I found that I encountered stalling tactics. Ultimately, after putting a request in writing (cf 805 ILCS § 105/107.75), and after encountering unnecessary delay, I received only eight 1-page summaries instead of the more detailed information which I was entitled to and which I requested. I had paid so-called dues from 1991 through 2008 ($4,600). Notwithstanding my long-term payments to those who collected it in the name of the LLPOA, the “treasurer” told me that she was too busy to provide more information. Her response was definitive. There would be no cooperation.

False Claims of Tax-Exempt Status & Admission Such Claims are Untrue

Because those involved in this scheme have sometimes claimed that the LLPOA has a tax-exempt status, I sought an alternative route under 26 USC 6104(b) in the latter part of 2008. That statute provides that the IRS must make certain tax return information of tax-exempt organizations available upon request. 26 USC 6104(d) also provides that a tax-exempt organization must disclose that information to the general public upon request. After the IRS responded by saying that the LLPOA does not have a tax-exempt status, those involved in this scheme wrote, on page 6 of their Nov 2008 newsletter, “Clarification: We do not have a tax-exempt status. We have a not-for-profit status.”

The limited financial information that has been uncovered shows that a minimum of $2,532,792.53 has been collected since the first mock election was held in 1981. Although no financial data is available for 15 years because of a lack of cooperation from the persons who were supposed to comply with the disclosure requirements, a conservative estimate indicates that a minimum of another $1,000,000 has been collected in those years for an estimated total of $3,500,000.

Footnotes:
[1] Reportedly, in 1957 when the LLPOA began with 10 members, the dues were $10 a year. Before the fraud began in 1981, the LLPOA’s tax returns should indicate that the LLPOA’s income was minimal. 1981 is the year in which the first fraudulent document was recorded in support of a mock election held in the name of the Loch Lomond Property Owners Association for 1982 with persons who were not Loch Lomond property owners.

A comparison should also show that tax returns from earlier years would have been regular corporate tax returns and not special 1120-H tax returns. The latter returns are filed when claims are made that corporation are homeowners' associations and entitled to the special tax breaks available to bona fide homeowners’ associations. In the years before Alan Kalman and his firm were hired, the tax returns were apparently filed by the persons who held themselves out as “treasurers.” In November 2012, the participants announced in a newsletter that they were paying his firm to file an 1120-H.

Mr. Kalman was fully informed a year earlier, with a two page letter and a CD-ROM with pdf files, that the participants were engaging in fraud and that the LLPOA is not a homeowners’ association. He responded by not sending any more billing notices to me. I have not been tricked into paying so-called dues since 2008. Although Attorney Nesbit was hired in 2010 to collect an alleged $188,000 owed as back dues, and although I have not paid any money since discovering the fraud in 2008, neither he nor his firm have many any effort to collect money from me. In 2013, I fully informed Attorney Nesbit of the fraud with a two-page letter with a more detailed supporting appendix. In his reply to me, he essentially said that he just wanted me to leave him alone and that he would not even read any additional letter from me. Notwithstanding his planned ignorance, because he apparently continued to be the registered agent and attorney for the LLPOA, I fully informed him in a second letter that “No election was held in 2012 for 2013 because of a lack of a quorum.”