Mail Fraud


Timeline


From the 1980’s to the present, some people have used the U.S. mail to make certain false factual representations and collect more than $3,500,000 by mail fraud.  They have collected millions in the name of the LLPOA and want even more.

Basic Issue

The basic issue in this situation is easy to understand:

  • either (1) the LLPOA is a voluntary-membership association which owns a lake subject to easement rights of persons who are not obligated to be members of the LLPOA,
  • or (2) the LLPOA is a mandatory-membership homeowners’ association.


Secondary Issue -- Bona Fide LLPOA Officials or Imposters

One secondary issue related to that is whether those who have been obstructing lake-front access and mailing billing notices been elected as bona fide LLPOA officers and directors?  Did they hold annual elections in a manner consistent with the LLPOA’s charter and did they act in a manner consistent with the LLPOA’s obligations?  Or, in those years when they held elections, did they merely hold mock elections as a pretext so that they could use the name and property of the LLPOA to mail false billing notices?  And, in some years, did they simply decline to hold any kind of annual election for the following year but merely declare that they were officers and directors for another year?


A basic question is: Have the persons responsible for the falsely mailed billing notices been bona fide LLPOA officials or imposters?

Another Secondary Issue -- Innocent Mistakes or Knowing Misrepresentations

Another secondary issue related to that is, if money has been collected by those making false representations that the LLPOA is a homeowners’ association, have those who have been making the false representations known that they are false?  Certain  additional sub-issues related to that is whether they (a) created false documents contrary to the documents in their shared possession, (b) acted contrary to their alleged belief that the LLPOA is a homeowners’ association, or (c) made express admissions which are contrary to an alleged belief that the LLPOA is a homeowners’ association.

Is the LLPOA a homeowners’ association?
The charter of an incorporated association determines the purpose(s) for which it was organized.  The charter determines whether an incorporated association was organized to meet the requirements to qualify as a mandatory-membership homeowners’ association. See, for example, Treas Reg. § 1.528-1(c) and 805 ILCS § 105/102.10(a)(7).

Treas Reg. § 1.528-1 provides
“Homeowners associations.
“(a) In general. Section 528 only applies to taxable years of homeowners associations beginning after December 31, 1973. To qualify as a homeowners association an organization must either be a condominium management association or a residential real estate management association. ... As a general rule, membership in either a condominium management association or a residential real estate management association is confined to the developers and the owners of the units, residences, or lots. ...  (c) Residential real estate management association. Residential real estate management associations are normally composed of owners of single-family residential units located in a subdivision, development, or similar area. ... They are commonly formed to administer and enforce covenants relating to the architecture and appearance of the real estate development as well as to perform certain maintenance duties relating to common areas.” (emphasis added)

The requirements of Treas Reg. § 1.528-1(c) makes it important for those who want to engage in fraud to misrepresent the terms of a nonprofit corporation’s charter when the charter does not have such terms.

805 ILCS § 105/102.10(a)(7) also requires that for an incorporated association to be incorporated as a valid homeowners’ association, the charter must include a declaration to that effect.


The LLPOA's Charter
Those who have collected money in the name of the LLPOA have made numerous false representations regarding the LLPOA’s charter.  The actual terms can be found in the charter, with a copy on this web site and also available from the Illinois Secretary of State.  The false representations made by mail to the Secretary of State that the LLPOA was chartered as a homeowners’ association can be found in the Annual Reports from 1987 to the present.

The actual language in the LLPOA’s 1957 charter shows
“The purpose or purposes for which the corporation is organized are: To promote the civic, education, patriotic, economic, social and charitable purposes of the community known as Loch Lomond to bring together the members of said community to the end that the strength of their common efforts and unity will result in the greater benefit to all.”

Example of knowing false representations by mail -- included in proposed changes
As an example of the knowing false representations made by mail to easement owners that the LLPOA satisfies the qualifying requirements of Treas Reg. § 1.528-1(c), a false document was circulated to easement owners in 2013 for a 2/3rds approval to purportedly change the covenants for five subdivisions in the vicinity of the Loch Lomond lake.  That document with a paragraph which falsely represents the terms of the LLPOA’s charter also currently appears on the web site that is maintained in the name of the LLPOA (still on the web site as of 6/2/2015).

In the fourth full paragraph (6/2015) that document misrepresents the terms of the LLPOA’s charter by falsely stating that that the LLPOA was “incorporated under the laws of the State of Illinois to administer and enforce the covenants, conditions, restrictions, easements, charges, and liens ...”

That is plainly not true.  No attorney or other adult of normal intelligence can believe that.  The plain language of the charter shows that representation regarding the terms of the LLPOA’s charter is not true.

Another example

This particular document is just one of many in which those collecting money by mail in the name of the LLPOA have misrepresented the terms of the LLPOA’s charter.  As an example, in a document purportedly recorded in 2011 as the LLPOA’s bylaws, it was misrepresented that the LLPOA was organized “to hold title to the parks of the subdivision of Loch Lomond, to maintain the lake and parks of the subdivision, ...” 


The document also misrepresents by implication there has somehow been a lawful re-subdivision of five separate subdivisions into a single subdivision which those involved in the scheme as the Loch Lomond subdivision.  It identifies the five subdivisions as (1) the first McIntosh subdivision given the plain name "Loch Lomond," (2) the second McIntosh subdivision given the name Loch Lomond Unit 2, (3) the third McIntosh Loch Lomond subdivision given the name Loch Lomond Unit 3, (4) the Seminary View subdivision (which was not developed by the McIntosh company), and (5) the Peramore's subdivision (which was not developed by the McIntosh company). 


Only the Village of Mundelein has the authority to approve of re-subdivisions, and the Village of Mundelein is unable to provide any documents showing that it approve of any such re-subdivision.  It is a factual misrepresentation for those who obstruct easement access and allow outsiders to use the lake vote in mock elections to claim that the subdivisions identified by them constitute a lawfully created subdivision under their control known by them as the Loch Lomond subdivision.

Fraud from billing notices mailed to those who were misled by false "welcome" letters
The mailed billing notices are based upon multiple misrepresentations, including the uncorrected ones in the “welcome” letters or “new homeowner” letters hand-delivered to incoming home buyers.  Although many such “welcome” letters were hand delivered, the subsequent billing notices were regularly mailed on an annual basis with no corrections made to the false impressions made by the original documents.  The result?  A transfer of more than $3,500,000 by mail to those in an organization who held mock elections with disqualified outsiders and fraudulently acted in the name of the LLPOA.