ANALYSIS OF OBL AUDITOR’S REPORT

Overview

The Gladys Duffy Pew GST Exempt Trust (“GDPT”) purchased Unit #207 on or about
7/1/2002. At closing, the GDPT was given six-months of HOA fees paid for by the
developer as part of a purchase incentive package.

The primary contributor to this report, Nye Lavalle, is the beneficiary of the trust and
former occupant of the unit. Nye Lavalle would serve as both the entity member and
agent since he would be best equipped to deal with Association issues since he lived in
the 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 trust’s
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 the
Condominium. Since the trust was managed by Merrill Lynch Trust Company
(“MLTC”), OBL was informed it could either bill the trust on a monthly or quarterly
basis for Unit #207 and OBL was provided contact and billing info in both Florida and
New Jersey.

Contrary to the assertions made in the auditor’s report, Nye Lavalle never made one
payment to OBL for any HOA fees, special assessments, or utility bills. The only
payments 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 lawyers
threatened to sue Mr. Lavalle (See Exhibit A) for bills and invoices that were not only not
owed 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 legal
responsibility of the original developer of the building.

The bills were for unit #1605 that was leased by one of Mr. Lavalle’s business partners’
company and by his family and him for 3 ½ years from 1998 to 2001. Each annual and
month-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 and
his family. Later, when Mr. Lavalle moved into Unit #109 in a private lease, Mr.
Lavalle’s 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 (See
Exhibit 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 an
average bill, raised a red flag to the trustee.

In exercising his fiduciary duty, the trust manager at Merrill Lynch contacted Mr. Lavalle
to 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 was
no issue with the unit, the trustee asked Mr. Lavalle to conduct an investigation and
analysis 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 that
the bill was not even the trust’s 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 1999
and 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 owed
were 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. After
reviewing their documents and doing some computations on his own, the trustees were
right.

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 OBL’s books, when in
fact it was the responsibility of the developer to pay the bill. Regardless of ultimate
payment responsibility, the condo documents called for the owners to pay any past due
utility bills that a lessor did not pay.

Further investigation by Mr. Lavalle led to the discovery of other owners and residents
with similar problems. Other owners had leases with utilities included that the developer
did not pay and where the utility bills were “carried” on the Association’s books, rather
than the developer’s books and account. There were also commercial enterprises in the
building, including a hair salon, whose bills were carried on OBL’s books.

In addition, various other utility billing schemes and frauds were unearthed. Lavalle, his
trust and OBL owners and residents were receiving fraudulent utility bills that indicated
that their electric and water bills were metered when in fact the Developer and its
management were

Owners and residents received fraudulent “metered” bills where the meter readings were
actually falsified and created in thin air could make a claim for fraud, deceptive acts, and
even racketeering. Additionally, Lavalle determined that certain meters were turned off
in unit owned and leased by the developer so that the other owners and residents would
pay a higher share of the developer’s own utility bill. In essence, the developer allocated
a 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 the
association, while under developer control, received insurance proceeds to repair and
replace the meters. Instead, the fund were used for other purposes, not the replacement or
repair of meters.

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

Further investigation by Lavalle, found that the association’s finances were dire and its
accounting 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 outpaced
incoming revenue.

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

Mr. Lavalle, a consumer and investor advocate who knew of the dire financial condition
of the association as well as the fraud discussed above, informed the board that such acts
were violations of various state and federal laws. He also advised the association of
several ways he would help with law firms he consulted to sue the developers and others
for the abuses that led to the association’s financial problems.

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

In addition to the prior frauds and abuses, Grenuk, OBL’s new manager and the board
implemented new and additional frauds, abuses, and financial schemes in violation of the
OBL condo documents in order to make the association’s books look better than they
actually were.

Eventually, the board, management, Grenuk, Lavalle and his trust could not come to
agreement over the association’s books of account for the trust’s unit #207. Lavalle and
his trustees had determined that his trust was defrauded by thousands of dollars and later
tens 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 to
the association.

Contrary to the Association, their lawyer’s assertions and even their President’s false
testimony, One Buckhead Loop has had major accounting, book and record keeping
issues since its inception. Many of the issues were originally created by its developers
and the first management company that managed the Association. First Communities
was OBL’s first management company and they were owned by one of the building’s
orginal developers.

When a new owner board took over management and desired to audit the books of the
Association, First Communities refused and failed to provide the Association with the
necessary documents to conduct a thorough and independent audit of the Association’s
books as well as each member’s 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 frauds
and abuses.

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

No one questions the Association’s ability to levy legitimate, lawful, and reasonable
assessments 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 the
Declaration and Bylaws. It’s simply not a one-way street.

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

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

Baldwin’s four-page “report” is attached as Exhibit D to this report. His spreadsheets are
attached 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 a
new system to show a total historical account history. Instead, OBL relies on incomplete,
redundant, and redacted spreadsheets, account histories, transaction ledgers and other
documents from various vendors and outsourcers to reply upon.

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

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

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

The only document received with any transactions for this time period was the Auditor’s
spreadsheet, which has been identified as having many errors, frauds, misrepresentations
and abuses as described herein.

In the auditor’s report, he lists a One Buckhead Loop Condo Association “Rent” Account
Ledger for Unit #207 for a period from 4/1/02 to 5/25/04. Despite all the requests, this
important document has not been provided.

Furthermore, OBL claims no source documents exist to analyze utility use prior to
9/24/04. As such, OBL’s auditor makes invalid and erroneous “assumptions” by
“extrapolating” what was due, paid, and owed on GDPT’s account for utilities.

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

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 CRITIQUE OF AUDITOR’S REPORT

Flawed Scope of Work

In Kevin Baldwin’s state of “scope of work,” Baldwin states that he was “contracted to
review the account of Unit #207 and to test selected transactions to determine if the
billings and ending balances appeared reasonable. I was not contracted to give my
opinion as to the complete accuracy of the account” Baldwin states!

Anyone understanding accounting parlance, would know that what this accountant was
simply doing was checking a sample of numbers to see if they added up. Plain and
simple, does 2 + 2 = 4! In addition, Mr. Baldwin was only “testing” “selected
transactions” and he states he was not even looking at whether the numbers provided
were 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 per
month 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 the
numbers given to him and not analyzing nor looking at the number to validate its
accuracy. 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 for
the same time frame. Such an obvious fraud is not only intentionally ignored by the
auditor, 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 his
report was to add the numbers given and seen if they came out close to the balance that
was claimed owed.

An accounting project of this sort is typically taken out to conceal and cover-up financial
schemes 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 and
commits potential malpractice when he doesn’t identify the inconsistencies and obvious
errors 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 trust’s part as
to the monthly HOA fees since they are what they are. Also, there is no disagreement on
the amount of the properly voted on special assessment and the monthly payment
amounts for the special assessment. The trust accepts the interest calculations as
accurate, until verified by its forensic accountant.

The trust and Lavalle have and continue to dispute all utility fees until appropriate meter
readings, allocation formulas, source documents, and master utility bills can be provided
for an appropriate audit. The trust disputes all legal fees, late fees, fines, misc. charges
and 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 the
association fees and the utility fees since they were tracked on separate sources. Unlike
the utility tab and its data, which is variable, the monthly HOA fees and lawfully passed
special assessments are virtually set in stone.

The trust and Lavalle do not dispute the validity of monthly HOA fees and the special
assessment that was passed by the association’s members, including Lavalle.

Table A below is reflects the monthly HOA fee due from the trust for each year of the
trust’s ownership from July of 2002 to the end of 2007, which is Baldwin’s 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 Baldwin’s special assessment tab, the special assessment was $9,450.00
with 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 2007

Developer/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 that
the developer paid the agreed upon HOA fee incentives and that their account was
properly credited. Prior to Baldwin’s report, neither the trust or Mr. Lavalle ever
received ANY documentation of such credits or ANY transactions from 7/1/02 to
5/10/04.

From July 2002 to February 2008, almost $15,000 in payments by and credits to the
trust for unit #207 were unaccounted for to the trustees and its beneficiaries. OBL had
stated that OBL accounting records for this period had been destroyed. This is further
evidenced by OBL’s own minutes and records that show in 2003, OBL retained an
independent accountant named Charles Bailey to audit the books and records of OBL
since 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 was
unable to complete his audit over a two-year period. The only thing that the trustees, in
fulfilling their fiduciary duty to the beneficiaries requested, were records to audit their
account and determine their lawful obligation to OBL.

Instead of simply providing the trustees and their agents the proper documentation, OBL
and its lawyers went on to create additional abuses to fraudulently “manufacture a
default” in attempt to illegally foreclose on the trust’s unit. This is evidenced by a review
of the records currently available.

OBL and its lawyers provided dozens of copies of transaction histories to the trustees and
its agents from December 2005 to December of 2007, with not one history showing ANY
credits, 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 the
enormity of the discovered variances, frauds and abuses identified in this spreadsheet and
other records, a proper and final audit cannot be accomplished until all underlying
support 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 auditor’s assertion prior to confirmation and validation, it

appears 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 ascertain
the final correct figures.

A review of the facts and figures provided by the Merrill Lynch Trust Company shows
that between 2003 and the end of 2007, a total of $52,225.34 was paid by MLTC to OBL
and its agents for amounts due for HOA fees, special assessments, and any late fees
properly 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 been
made to obtain copies of the cancelled checks so as to validate and verify the amounts in
the above tables.

In total, from July of 2002 when Unit #207 was purchased by the trust to December 31,
2007, the date of the Auditor’s spreadsheet, a total of $56,176.70 was paid or credited to
the trust’s account for HOA fees and the special assessment. Baldwin’s spreadsheet
reflects total payments and credits of $56,527.58. This leaves an unreconciled variance
of $350.88. Until final payment documents are obtained, we cannot resolve the
difference.

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 wrongfully
misapplied 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 and
other misc. charges without underlying support documentation that have nothing to do
with HOA fees and special assessments. This tab is for HOA fees and Baldwin makes no
explanation as to the legitimacy, accuracy or propriety of these fees being listed in
relationship to HOA fees.

Late fees and their propriety will be discussed later, but in this section a discussion of
unrelated charges, fees, and misapplications will be addressed. The following Table C
details 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/Collusion
3/26/07 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 of
the trust.

OBL UNJUSTIFIED LATE FEES

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

In order to fulfill it’s fiduciary duties, the trustees required OBL to send them a monthly
or 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 an
invoice to authorize payment to OBL. There was never an issue of authorization until
2005, when utility bill demands in excess of $2,500 were made upon the trust and the
trustees required an audit.

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

In one Baldwin comment, he states that OBL could have assessed a late fee on or about
November of 2002. Yet, it was not yet the trust’s responsibility to make payments then
and the developer was responsible for the purchase incentive HOA payments and as such
the 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 to
determine if there were any delays or OBL’s non-compliance with trust procedures that
led to delays in payment.

Total late charges claimed by OBL in Baldwin’s report totals $1,902.42.

OBL UNLAWFUL ASSESSMENTS & FINES

Baldwin describes various transactions that he takes from OBL’s source documents. Yet,
he overlooks obvious questions. For example, did OBL properly, lawfully, and
reasonably assess fines, assessments, and other charges? What underlying support for
those charges did he review? What legal opinions did he obtain? If the fines and
assessments unlawfully and unreasonably assessed were not lawful and must be removed
from the account, then each transaction must be adjusted, even if one dollar would
change the entire balance claimed owed.

ERROR & FRAUD ONE - - UNLAWFUL “NUISANCE” FINES

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

ARTICLE V
Rule Making & Enforcement

Section 1. Authority and Enforcement. The Condominium shall be used only for
those uses and purposes set out in the Declaration. The Board of Directors shall have the
authority 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 written
consent of a Majority of the total Association vote at an annual or special meeting of the
membership. Every Owner and Occupant shall comply with the Declaration, Bylaws and
rules and regulations of the Association, and any lack of compliance therewith shall
entitle 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 lien
upon the Owner’s Unit, and to suspend an Owner’s right to vote or to use the Common
Elements for violation of any duty imposed under the Declaration, these Bylaws, or any
rules and regulations duly adopted hereunder; provided however, nothing herein shall
limit ingress or egress to or from a Unit. In the event that any Occupant of a Unit
violates 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 against
the 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 Board
to do so thereafter.

Therefore, in order for ANY “rule to be in effect” and be lawful, OBL would have had to
follow 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 and
unenforceable. You cannot selectively target one individual for a rule. If the rule is
enforceable and then broken, then a set of due process steps are necessary for the fine to
be lawfully assessed to a unit when the violator is an occupant. The following steps must
be 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 fine
b. Time fine must be paid by
c. 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 the
owner.

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 Association
to 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 require
compliance 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 as
provided in subsection (a) below. Any such fine or fines may be effective or commence
upon the sending of such notice or such later date as may be set forth in such notice,
notwithstanding the violator’s right to request a hearing before the Board to challenge
such fine under subsection (b) below.

(a) Notice. If any provision of the Declaration or Bylaws or any rule or regulation of
the Association is violated, the Board shall send the violator written notice identifying the
violation 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 reconsideration
of the fine(s). Fine(s) may be effective or commence upon the sending of such notice or
such later date specified in such notice, notwithstanding the violator’s right to request a
hearing 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 fines
may 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 the
date of the violation notice provided above, then the Board shall schedule and hold in
executive 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 on
time 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 the
“letter of the bylaws” the provisions for requisite notice and the “due process” steps that
must 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 OBL
Declaration and bylaws under this law. OBL and each board member are in violation of
this law.

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

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

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

Without a vote of the entire membership to amend the bylaws and declaration, the OBL
board took actions to strip Lavalle and the trust of the rights afforded to them by these
documents and in violation of the Declaration of Condominium, Bylaws (“Condo
Instruments”) and the GA Condo Act that governs such fines.

OBL and their counsel violated the due process rights afforded by the condo instruments
and 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 condo
documents. However, the rules and regulations they create must be created to apply to all
members, 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 property
managers must comply with a certain amount of decorum and behave in a certain
manner, then OBL may have a right to fine members and occupants. Then, only if the
‘violator” 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) invoked
Paragraph 15 (f) of the Declaration of Condominium under the “nuisance” provision. It
quoted that the board, in it’s 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 unreasonably
threatened, annoyed, disturbed, and caused considerable discomfort to employees and
several owners of the Condominium, and he has interfered in the process of managing the
Condominium.

Out of thousands of pages of evidence provided in litigation, no form of communications

has been produced in litigation or provided anyone that claims Lavalle threatened,
annoyed, disturbed, and caused considerable discomfort to employees and several owners
of the Condominium. A list of owners who complained of his conduct and claimed that it
interfered with their enjoyment of the Condominium must be provided.

However, the evidence supports that the management and board of OBL began this even
more 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 to
the desk to pick a package up. (Exhibit I).

Mr. Lavalle told Mr. Grenuk to “stop your abuse fat boy” whereupon Mr. Grenuk
aggressively 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, “stop
your abuse fat boy” and challenged Grenuk to hit him calling him a man with a small
penis complex and a bully who Mr. Lavalle was not afraid of. Lavalle immediately went
to 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 into
the room and prevented Grenuk from striking Lavalle. Young convinced Lavalle to leave
the 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 their
enjoyment and living could not be affected. Next, the board cannot assess a fine for the
discomfort of a board member, employee or manager who a member has a disagreement
with.

Mr. Grenuk, as documented by OBL’s own employees, swore and demeaned a concierge
and then attempted to physically assault Lavalle that would seem to be a violation of the
same rule. (Exhibit I)

OBL’s resolution, directed solely to Lavalle, attempted to prohibit him from speaking or
communicating in any way with the property managers, building engineer, office staff
and 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 board’s nefarious and willful misinterpretation of Paragraph 15 (f) of the
Declaration of Condominium, deals with the use of the condominium and acts that would
damage the value of such units related to complaints to the board by owners and
residents, commonly referred to as a “public nuisance.”

Sending e-mails cannot be deemed a nuisance. Coming into the property office to
complain 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 and
repeated phone calls from the management office; demands for payments in excess of the
rightful obligation; denial of personal responsibility for bills; complaining about water
bills that go from $15 to $30 a month to over $600 a month could be deemed to be any
act of nuisance or as you later claimed, stalking. Such claims are nefarious in nature and
go against all common sense.

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

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

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every occurrence. Counsel of OBL’s prior law firm also, in no uncertain terms, states the
same 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 many
associations, 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 a
fine to begin on the date of the violation notice.

If your association’s bylaws or declaration include a fining “due process” procedure, that
specific 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 a
hearing. 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 attempting
to 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 accounts
readjusted from that date forward and payments attributed to HOA fees, not anything
else.

OBL UNLAWFUL WATER HEATER FINES & DEMAND

Baldwin overlooks the rational and justification about the imposition of water heater
replacements 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 three
with reference to the heading of “Insurance:”

“Insurance – Ed meeting with insurance company on Monday to discuss requiring

homeowners to replace their hot water heaters (most units still have original hot water
heaters, 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 owners
replace 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 Board
intentionally ignored the warnings of Mr. Lavalle and violated the provisions of the
Declaration of Condominium that governs the relationship with each OBL homeowner by
mandating that each homeowner replace its hot water heater without a vote of
homeowners.

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 or
any Unit Owner(s) to do any act or perform any work involving portions of the
Condominium which are the maintenance responsibility of the Unit Owner, which will, in
the Board’s sole discretion, decrease the possibility of fire or other damage in the
Condominium, reduce the insurance premium paid by the Association for any insurance
coverage or otherwise assist the Board in procuring or maintaining such insurance
coverage. This authority shall include, but not be limited to, requiring the Owners to
install smoke detectors, requiring Owners to make improvements to the Owner’s Unit,
and such other measures as the Board may reasonably require so long as the cost of such
work does not exceed three hundred ($300.00) dollars per Unit in any twelve (12) month
period.

The resolution the OBL Board passed violates this provision of the Declaration in that the
charge for the work required, far exceeds the $300.00 provision. The OBL board passed
the 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 all
homeowners.

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 unlawful
“assessment” subjects the association to further legal liability and each homeowner to
potential damages via assessments due to the board’s willful and individual misfeasance
and malfeasance after sufficient warning!

Fact #5

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The OBL board, after dozens of warnings by Mr. Lavalle, instituted unreasonable and
grossly unfair fines and demands for such fines that constitute further fraudulent actions
by 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 any
Unit Owner does not comply with the requirement made by the board of directors
pursuant to subparagraph (d) (i) above, the Association, upon fifteen (15) days written
notice (during which period the Unit Owner may perform the required act or work
without further liability), may perform such required act or work at the Unit Owner’s sole
cost. 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 requirements
mandated 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 the
Owner or Occupant of the Unit, except that access may be had at any time without notice
in an emergency situation.

Fact #6

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

Fact #7

Thus, the imposition of unreasonable fines is without merit. First, OBL violated the
Declaration 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 the
trust still did not install the water heater in the unit, then OBL would be allowed to install
one and then assess the cost to the trust. OBL has no right to fines, and you have a duty
to 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 the
sizeable money paid to OBL and the utility company in Sept/Nov of 2006. There were
then and still are now substantial sums of money due [in excess of $10,000] due the trust
and 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 the
water heater as requested. All water heater fines must be removed from the account and
all other transactions, balances, credits, debits and figures tied or related to the water
heater 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. Baldwin’s report that not only
suggest fraud and abuse, but clearly prove it! He makes no mention of these issues and
attempts to conceal others.

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

However, a comparison of the records provided herein to OBL’s records shows a

complete disconnect and the fraudulent red flags present are extensive. While the HOA
tab and special assessment tab for payments can be closely reconciled, the large variances
in the utility tab and their claimed loss of records are suspect.

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

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

Utility Payments 7/02 to 9/04

First, Mr. Baldwin states in his report that he “prepared tabs on this spreadsheet for the
association fees and the utility fees since they were tracked on separate source
documents.”

In reality, they were tracked on separate source documents and the most important
documents of all, the utility invoices, schedules, payments, histories, meter readings, and
billing 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 the
documentation.”

Recall, the major allegation is that the trust and other owners were falsely and
fraudulently billed for metered utility usage that never occurred. Baldwin made no effort
whatsoever to analyze the invoices or requested invoices from the trust that showed meter
readings.

He also claims to have used utility register from unit #1706 from 12/99 to 12/2008 but
does 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 the
general 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 fees
since they are different tracking accounts and the trust and Lavalle have been separately
billed for such services and fees.

However, without source documents, Baldwin simple asserts “This information was used
to 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 during
the period when utilities were allocated.”

Again, this is another false statement and assumption. MLTC has provided the trustees
and 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 this
information from Viterra or the trust, prior to his false statement. In fact, evidence as
provided in the table below conclusively proves that Mr. Baldwin’s entire spreadsheet tab
for utilities is not only in error, but fraudulent in order to conceal his client’s financial
frauds and abuses.

The following Table E is a table that compares Baldwin’s “extrapolated figures” due to
the unavailability of OBL records to the “actual and real” records maintained by the
Merrill 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 Baldwin’s spreadsheet and creating an ending utility
balance 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 transaction
must be adjusted from the date of payment receipt and all balances after this date are
misstated, false and fraudulent.

MAJOR ERROR & FALSE ASSUMPTION TWO

Utility Payments 7/02 to 9/04

Additionally, Mr. Baldwin just accepts the numbers taken from 1706’s “register” without
seeking additional information from other units in the building. The bills shown in
Exhibit L are from another homeowner in the building and are for Unit #1507, which has
only 1567 sq feet.

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

TABLE F - - Unit #1507 COMPARISON TO BALDWIN ASSUMPTIONS

Payment Baldwin Calc Baldwin Tab Bill/Calc

Date Due #1507 #207 Difference
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 in
square feet of 237 sq. feet, Baldwin’s figures are again far in excess of comparable and
identical billings and shows yet OBL’s continued attempt to deceive, defraud and conceal
their financial abuses. The figures in Table F are from 50% to 300% above to payments
due, if any, in the identical timeframe.

Accordingly, all transactions, balances, credits, debits, and figures tied to these
transaction must be adjusted from the date of payment receipt and all balances after this
date 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 (date
of 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 were
removed, including electrical outlets. THERE WAS NO WATER OR ELECTRIC
SERVICE UNTIL MAY OF 2003 BEFORE MOVE IN. There were no toilets, sinks,
wash basins, showers, tubs, heat, air conditioning, washing machines etc… until Spring
of 2003 when those were installed.

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

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Mr. Lavalle was residing in another unit during renovation and received a bill from
Viterra for utility usage. He did not know if the bill was intended for the unit he was
living in at that time or the new unit which had no power or water. The bill was metered
so Lavalle contacted both Vittera and OBL management to disclose that he was not
responsible 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 by
management and Viterra to inform them when he moved into the new unit and it was
operational. Lavalle did so with OBL management in June of 2003 and also gave them
additional instructions to bill the trust.

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

Thus, $2,133.22 minus perhaps $50 usage based on other bills need to be reflected in
OBL’s utility demands and subtracted from Unit 207’s 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 the
association fees and the utility fees since they were tracked on separate source
documents.”

In reality, they were tracked on separate source documents and the most important
documents of all, the utility invoices, schedules, payments, histories, meter readings, and
billing 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 the
documentation.”

However, Mr. Baldwin’s 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 off
the 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 were
deducted for utilities that did no exist and were not to exist until May of 2003. It is
possible that the developer, who had a dispute with Lavalle, placed his utilities onto the
account of the trust.

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

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

MAJOR ERROR & FALSE ASSUMPTION FIVE

Set Up Transfer From Viterra to AMS

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

On the utility tab at transfer from Viterra to AMS, Baldwin shows for the 9/04 transaction
that $65.90 was applied for a “July Charge” when Vittera was paid for July and
Baldwin’s 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 Trust’s account and all
corresponding, figures, balances, credits, debits and transactions tied to these figure
adjusted.

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

MAJOR ERROR & FALSE ASSUMPTION SIX

$123.84 Payment To MLTC On 3/25/05

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

On the utility tab at March, 2005, a balance transaction of $123.84 is shown when in
reality 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 transaction
must be adjusted from the date of payment receipt and all balances after this date are false
and 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

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

On the utility tab at November, 2006, a payment to AMS in the amount of $1000 was
made by the trust. This payment was made by MLTC on or about 10/23/06 and was not
credited or applied by OBL to its account.

OBL and its law firm two weeks later demanded $2,039.69 at threat of foreclosure when
in fact $1000.00 was paid and the trust was disputing the remaining balance until OBL
could 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 OBL’s lawyers on
11/15/06 and $2,036.69 was taken by OBL and the auditor and applied to utilities to
create a credit balance when the Trust was disputing all payments and charges for
utilities.

However, this payment was not even credited until January of 2007, almost two full
months after payment. Even with the misapplication, and using AMS and OBL’s figures,
the balance for the trust’s utility account should reflect a $1000 credit balance as of
November, 2005.

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

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

Accordingly, all transactions, balances, credits, debits, and figures tied to this transaction
must be adjusted from the date of payment receipt and all balances after this date are false
and 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 the
association fees and the utility fees since they were tracked on separate source

Mr. Baldwin has diligently prepared tabs for every month of the trust’s ownership from
July, 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 to
AMS when the balances shown are zero and the remainder of the over-demanded and
misapplied $2,039.69 is somehow miraculously zeroed out.

It can only be assumed that the $701.51 was paid to prior month’s utilities that are zero
and shows yet once again, a fraudulent scheme as well as inability for OBL to account for
its transactions.

Accordingly, all transactions, balances, credits, debits, and figures tied to this transaction
must be adjusted from the date of payment receipt and all balances after this date are false
and 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 the
association 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 of
racketeering, fraud, deception, and discrimination, but also of retaliation for Lavalle’s
discovery of various discrimination practices of the OBL board and their frauds over the
years.

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

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

Unbeknownst to OBL and Baldwin, AMS sent Merrill Lynch Trust Company an invoice
for water bills for the billing period of 3/6/07 to 4/6/07 and billed on 4/27/07. The bill
attached as Exhibit M claimed a total of $8.84 for water usage and $21.40 for sewer cost
and 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 Lavalle
and the trust. As indicated by Baldwin’s spreadsheet and the attached HMS report in
Exhibit N, OBL charged the trust over a 2000% markup on any water usage that the trust
was 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 for
foreclosure to collect this unlawful and fraudulent amount. The following tables and
charts 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 months
and not question the validity, truthfulness, and accuracy of such an entry without
comment 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 the
association 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 and
payments 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 living
there, if in fact there was such usage, Mr. Baldwin could not simply place an extrapolated
figure 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 and
figures 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 on
3/21/05 that was paid to Viterra by MLTC with on 3/15/05. This transaction is reflected
on both Mr. Baldwin’s HOA tab as a charge and payment and only as a charge on his
utility 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 these
transactions must be adjusted from the date of charges and payment receipt and all
balances 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, and
payments, very little of Baldwin’s report and spreadsheet can be relied upon. A complete
recalculation with valid new assumptions and facts must be created to balance the
account properly and accurately reflect the transaction history.

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

For example, Jarrett’s letter of 6/14/06 would be time-lined against other source
documents and spreadsheets as follows:

Baldwin 6/15/06
DOCUMENT Demand S/S Clean S/S 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 at
payment 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 forensic
auditor to reconcile the account according to various assumptions for the court and jury to
see.

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