Table of Contents — Documents Supporting Allegations


Referenced documents

Documented allegations - the short version

Background of the events

Basic documents in Folder B

  • show the knowledge of those who control the gates to the lake (plus the knowledge held by attorneys hired from KSM in the name of the LLPOA), that the Loch Lomond Property Owners Association is not a homeowners' association (but was merely given easement property subject to the easement rights of Loch Lomond property owners without being incorporated to maintain the lake) and
  • the documents show the knowledge held by them that any representations made by them to easement owners and the IRS that the LLPOA is a homeowners’ association are false.

The basic documents include:

  1. A summary and recognition by a senior member of the KSM law firm (in a manner consistent with the 1984 Lakeland  decision) shows that unanimous consent from all property owners is required to create a homeowners’ association.  It shows knowledge on behalf of attorneys from the KSM law firm that easement owners cannot be drafted or compelled with a two-thirds vote to be members of an incorporated association which merely owns easement property subject to their easement rights.
  2. Treasury Reg § 1.528-1 shows that for an incorporated association to qualify as a homeowners' association, the incorporated association must be organized and operated primarily for one of the exempt functions of a homeowners' association such as maintaining common property.  It shows that those who collect money in the name of an incorporated association must refrain from falsely claiming in tax returns that the money was collected on behalf of a homeowners' association where the incorporated association does not meet the definition.
  3. A 1957 map shows that the 10 lot owners who incorporated the LLPOA only owned approximately 2 % of the 566 lots in the three Loch Lomond subdivisions when the LLPOA was incorporated.
  4. The LLPOA's charter shows that the LLPOA was organized to promote social and additional nonprofit activities  other than to be a homeowners' association. It shows (contrary to the false statements of facts repeatedly made in "new homeowner" letters and documents recorded as bylaws) that the LLPOA was not "organized ... to acquire and hold title to the lake and parks of the subdivision of Loch Lomond."  The charter shows that those claims have been known to be false by those holding themselves out as LLPOA officers and/or directors who shared possession of the charter and otherwise referred to specific language in the charter while making their false representations in the preamble to the 1993 document recorded as LLPOA bylaws.  The charter also shows that the LLPOA was not "organized ... to maintain the lake and parks of the subdivision" as repeatedly falsely represented in the preambles to the 2001 document, the 2010 document, and the 2011 document recorded as LLPOA bylaws.   It further shows that the fourth paragraph in a 2013 document circulated for a 2/3rds approval to purportedly changed the covenants for the Loch Lomond subdivisions falsely represents 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 ...”
  5. The LLPOA's deed to the lake shows that the LLPOA received the lake subject to (a) the easement rights of Loch Lomond property owners, (b) the covenants for the three Loch Lomond subdivisions, and (c) a promise to not allow persons to use the lake other than owners and occupants of the lots described in the covenants recorded as "Documents 822721, 903401, and 874973.”
  6.  The covenants for the first Loch Lomond subdivision incorporated in the deed to the lake shows (a) the covenants do not require any property owners to be members of any association or pay money to any association, (b) they expressly created “perpetual” easement rights running with the land in favor of all lot owners, (c) they expressly required all property owners to refrain from depositing any foreign matter into the lake, and (d) they expressly provide that (i) neither the lake owner nor the assignee lot owners have any obligation to maintain the condition of the parks (ii) nor do they have any obligation to maintain the lake in any “size, depth, or condition”
  7. The covenants for the second Loch Lomond subdivision with similar provisions document similar facts.
  8. The covenants for the third Loch Lomond subdivision with similar provisions document similar facts.

Additional documents in other folders showing knowledge include:

A summary with references to the participants knowledge in Folders K1 - K5

Annual Reports for the decades before the fraud began in Folder K1

LLPOA's Annual Reports for approximately the first two decades of the LLPOA's existence show actual and/or constructive knowledge of those who thereafter claimed to be LLPOA "officers" and "directors" that

  • the LLPOA only owned the Loch Lomond lake in a passive manner for approximately the first two decades of the LLPOA's existence without anyone claiming that the LLPOA was "maintaining the lake", and
  • no one ever claimed on behalf of the LLPOA for approximately the first two decades that they were operating a homeowners’ association.

A 1980 document was signed by persons who expressly admitting knowing that the LLPOA has no obligation to maintain the lake in any size, depth or condition.  The names include certain real estate agents as well as persons who subsequently held themselves out as LLPOA officers and/or directors when false representations were made that the LLPOA was formed or organized to maintain the lake.

Fraudulent 1981 document and post-1981 Annual Reports in Folder K2
show that the participants in the scheme knowingly engaged in mock elections.  The elections were mock elections in that

  • they were held with persons who were (a) ineligible to use the lake by a deed restriction in the LLPOA's deed and (b) ineligible to participate the elections by a limitation in the LLPOA's charter;
  • they were held with persons who intended to unlawfully interfere with the corporation’s property right and obligation to easement owners in the LLPOA's deed to exclude lot owners in outside subdivisions from using the lake; and
  • they were held with an intent to defraud the easement owners, including those who paid money to belong to the LLPOA and to whom a fiduciary duty was owed by the LLPOA.

Retroactive 1983 bylaws recorded in conflict with the 1984 Lakeland decision in Folder K3


  • those involved in this scheme are and have been aware of the 1984 Lakeland decision,
  • they took steps to purportedly nullify the 1984 Lakeland  holding to their actions, and
  • they knew, by purportedly taking steps to change the relationship between the Loch Lomond easement owners and the owner of the easement property, that the LLPOA is not a mandatory-membership homeowners' association.

"New homeowner" letters & web pages written with misrepresentations in Folder K4


  • efforts were made, through an expenditure of time and energy, to fraudulently mislead others by persons who had knowledge that the LLPOA is not a homeowners’ association,
  • such documents contain misrepresentations of facts directly contrary to the LLPOA's charter, and
  • such documents contain misrepresentations of facts directly contrary to the LLPOA's deed and the covenants which are incorporated by the deed.

Excerpts from available newsletters in Folder K5

  • the ongoing mail fraud with (a) the participants’ false representations that the covenants require the lake to be maintained and (b) the participants’ threats that property values would be depressed if money is not collected to “maintain” the lake;
  • the participants’ long-term noncompliance with Art V, Sec 2 in the bylaws which requires that money transfers be accounted for in the minutes with specificity.  Beginning in 1996, the participants adopted a practice of distributing the newsletters as “minutes;”
  • the participants’ knowledge, as reported by them, that only a percentage of Loch Lomond property owners paid money to them; and
  • the participants often threatened to file liens against nonpaying Loch Lomond property owners and sometimes falsely claimed that they were in the process of doing so.

Annual Reports from 1980 through 2014 in Folder L

  • the names of those in leadership positions within the organization who engaged in fraud over an extended period of time. 

Documents with financial information in Folder F

  • 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
  • the income received from criminal activities has been misrepresented as being attributable the corporation which owns the easement property.

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