Evans, Et Al. v. United Bank, Et Al. Second Amended Complaint

IN THE CIRCUIT COURT OF MONROE COUNTY, WEST VIRGINIA
CHARLES J. EVANS, CYNTHIA B.

EVANS and OBIE WOODS, and
WAYNE CLIBURN, LUCY CLIBURN,
and SERGIO BAEZ and PETER
CALDERON and MIKE
HOLLANDSWORTH, VIVIAN
HOLLANDSWORTH, and JAN
JERGE and JAMES CARROLL, JR.
and FREDA LIVESAY and JIM
MACKEY, SHAYNA MACKEY,
and PETER DEL CIOPPO and JEAN
MILLARD, MICHELLE MILLARD and
STEPHEN RICE, LAUREEN RICE
and LON FOUNTAIN, LOUISE
FOUNTAIN and MICHAEL ROBEY,
LORRI ROBEY, ROBERT
SCHLOSSBERG, HELENE
SCHLOSSBERG, SALVATORE
ZAMBRI, MARY ZAMBRI, JOSEPH
ZAMBRI, ANTHONY ZAMBRI, and
ZAMBRI ENTERPRISES, LLC, a
Maryland limited liability company,
and ROBERT AMICO, BEVERLY
AMICO, and JOSEPH KIM,
Plaintiffs,
v. Civil Action No. 09-C-94
UNITED BANK, INC., a

West Virginia corporation,
RAY LEON COOPER, in his official
capacity as Vice President and Loan
Officer of United Bank, Inc., JOYCE
DURHAM, in her official capacity as
Vice President and Loan Officer of
United Bank, Inc., STAN MCQUADE,
individually, THELMA MCQUADE,
individually, and d/b/a MCQUADE
APPRAISAL SERVICES,
Defendants.
Evans, et al. v. United Bank, Inc., et al.
Civil Action No. 09-C-94
Page 2
SECOND AMENDED COMPLAINT
Comes now the Plaintiffs, Charles J. Evans, Cynthia B. Evans, Obie Woods, Wayne
Cliburn and Lucy Cliburn, Sergio Baez, Peter Calderon, Mike and Vivian Hollandsworth, Jan
Jerge, Freda Livesay, Jim and Shayna Mackey, Peter Del Cioppo, Jean and Michelle Millard,
Stephen and Laureen Rice, Lon and Louise Fountain, Michael and Lorri Robey, Robert and
Helene Schlossberg, Salvatore and Mary Zambri, Joseph Zambri, Anthony Zambri and Zambri
Enterprises, LLC, a Maryland limited liability company, Joseph Kim, Robert and Beverly Amico
(hereinafter “Plaintiffs”) by and through counsel, John H. Bryan, and for their Second Amended
Complaint respectfully represent to the Court as follows:
PARTIES AND JURISDICTION
1. The Plaintiffs Charles J. Evans and Cynthia B. Evans are husband and wife and
are now and were at all times relevant hereto, residents of the City of Alexandria, Virginia.
2 The Plaintiff Obie Woods is now and was at all times relevant hereto a resident of
Broadlands, Virginia, and is similarly situated with Charles and Cynthia Evans as purchasers of
property in the Walnut Springs Mountain Reserve development.
3. The Plaintiffs Wayne Cliburn and Lucy Cliburn are husband and wife, and are
now and were at all times relevant hereto, residents of Vienna, Virginia, and are similarly
situated with Charles and Cynthia Evans as purchasers of property in the Walnut Springs
Mountain Reserve development.
JOHN H. BRYAN, ATTORNEY AT LAW

611 Main Street • P.O. Box 366 • Union, West Virginia 24983 • Telephone 304-772-4999 • Facsimile 304-772-4998
Page 3
4. The Plaintiff Sergio Baez is now and was at all times relevant hereto, a resident
of Davis, Illinois, and is similarly situated with Charles and Cynthia Evans as purchasers of
5. The Plaintiff Peter Calderon is now and was at all times relevant hereto a
resident of Plainsboro, New Jersey, and is similarly situated with Charles and Cynthia Evans
as purchasers of property in the Walnut Springs Mountain Reserve development.
6. The Plaintiffs Mike Hollandsworth and Vivian Hollandsworth are husband and
wife and are now and were at all times relevant hereto residents of Fallston, Maryland, and are
similarly situated with Charles and Cynthia Evans as purchasers of property in the Walnut
Springs Mountain Reserve development.
7. The Plaintiffs Jim Mackey and Shayna Mackey are husband and wife and are
now and were at all times relevant hereto residents of Purcellville, Virginia, and are similarly
8. The Plaintiff Peter Del Cioppo was at relevant times hereto a resident of the
State of New York, but is now a resident of Union, Monroe County, West Virginia, and is
9. The Plaintiffs Jean Jacques and Michelle Millard are husband and wife and are
now and were at all times relevant hereto residents of San Francisco, California, and are

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10. The Plaintiffs Stephen and Laureen Rice are husband and wife and are now and
were at all times relevant hereto residents of Fairfax, Virginia, and are similarly situated with
Charles and Cynthia Evans as purchasers of property in the Walnut Springs Mountain Reserve
development.
11. The Plaintiffs Lon and Louise Fountain are husband and wife and are now and
were at all times relevant hereto residents of Desoto, Texas, and are similarly situated with
Charles and Cynthia Evans as purchasers of property in the Walnut Springs Mountain Reserve
development.
12. The Plaintiffs Michael and Lorri Robey are husband and wife and are now and
were at all times relevant hereto residents of Welcome, Maryland, and are similarly situated
with Charles and Cynthia Evans as purchasers of property in the Walnut Springs Mountain
Reserve development.
13. The Plaintiffs Robert Schlossberg and Helene Schlossberg are husband and wife
are now and were at all times relevant hereto residents of Arlington, Virginia, and are similarly
14. The Plaintiffs Salvatore Zambri and Mary Zambri are husband and wife and are
now and were at all times relevant hereto residents of Bethesda, Maryland, and are similarly
15. The Plaintiffs Salvatore Zambri, Anthony Zambri and Joseph Zambri (both of
whom are residents of New York) are each members of Zambri Enterprises, LLC, a Maryland
limited liability company which exists for the sole purpose of owning the subject Walnut Springs

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Mountain Reserve property, and whom will hereafter collectively be referred to as “Zambri”,
and are similarly situated with Charles and Cynthia Evans as purchasers of property in the
Walnut Springs Mountain Reserve development.
16. The Plaintiffs Robert Amico and Beverly Amico are husband and wife and were at
relevant times hereto residents of Alexandria, Virginia, now being residents of Woodlands,
Minnesota, and are similarly situated with Charles and Cynthia Evans as purchasers of
17. The Plaintiff Joseph “Teddy” Kim is now and was at all times relevant hereto a
resident of Alexandria, Virginia, and is similarly situated with Charles and Cynthia Evans as
purchasers of property in the Walnut Springs Mountain Reserve development.
18. Defendant, United Bank, Inc., is now and was at all times relevant hereto, a West
Virginia corporation with its principal place of business at 514 Market Street, Parkersburg, WV
26101, and a notice of process address of 514 Market Street, Parkersburg, WV 26101, c/o
Harold Manner.
19. Defendant Ray Leon Cooper is named as a defendant herein in his official
capacity as a Vice President and Loan Officer of Defendant United Bank, Inc., and was at all
times alleged herein acting in said official capacity and within the scope of his position,
employment, and supervision of Defendant United Bank, Inc., and was at all times alleged
herein acting in said official capacity and within the scope of his employment.
20. Defendant Joyce Durham is named as a defendant herein in her official capacity
as a Vice President and Loan Officer of Defendant United Bank, Inc., and was at all times
alleged herein acting in said official capacity and within the scope of her position, employment,

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and supervision of Defendant United Bank, Inc., and was at all times alleged herein acting in
said official capacity and within the scope of her employment.
21. Defendant Stan McQuade is now and was at all times relevant hereto a resident
of Lewisburg, Greenbrier County, West Virginia, and is engaged in doing business as the d/b/a
McQuade Appraisal Services and is named as a defendant herein both individually and in his
capacity as as a principal of d/b/a McQuade Appraisal Services.
22. Defendant Thelma McQuade is now and was at all times relevant hereto a
resident of Lewisburg, Greenbrier County, West Virginia, and is engaged in doing business as
the d/b/a McQuade Appraisal Services, and also as the Supervising Appraiser for Defendant
Stan McQuade, and is named as a defendant herein both individually and in her capacity as
the Supervising Appraiser and principal of McQuade Appraisal Services.
23 This Court has jurisdiction over this action pursuant to West Virginia Code §
51-2-1, et seq.
24. Venue is proper in Monroe County, West Virginia, as the events giving rise to the
Complaint occurred therein and the real property which is the subject of this Complaint is also
located therein.
STATEMENT OF FACTS
25. On or about Spring of 2004, Dan Berg, a former Nevada contractor, whoʼs
license was revoked by the Nevadaʼs Contractor Board due to fraud, among other things,
arrived in the Walmart parking lot in Lewisburg, Greenbrier County, West Virginia, where he
began residing in a camper trailer.

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26. Dan Berg, who at the time was using a fictitious social security number, was born
as Daniel Schonberger. He has previously claimed that he was in a car accident and could not
remember his real social security number and name.
27. Mr. Berg had been traveling the country looking for a parcel of real property from
which to run a real estate investment/development scam.
28. A local realtor who was allowing Berg to camp in his parking lot introduced him to
property with a beautiful view, which he had under contract in neighboring Monroe County,
West Virginia. Berg had little to no access to credit and very little cash. Thus, he sought out
investors.
29. Mr. Berg unsuccessfully courted several potential investors. Finally, he was
introduced to Jonathan Halperin, a Washington D.C. trial lawyer. They had never previously
met and were not related in any way.1 Mr. Halperin did not have much cash to invest, but he
did have access to credit using his personal residence as collateral. The two quickly agreed to
be partners.
30. Prior to purchasing the property, Berg and Halperin created Mountain America,
LLC, a Maryland limited liability company, and drafted and executed a “Provisional Operating
Agreement” for the LLC and the ultimate business d/b/a, which was to be called “Walnut
Springs Mountain Reserve” (hereinafter “WSMR”) WSMR was to be a high-end rural
residential vacation home development near Union, West Virginia. The agreement provided
that Berg and Halperin owned 50% of the company, respectively, and that they each held
1Both Halperin and Berg would later claim to investors, and others, that they were brothers, or sometimes step-
brothers or half-brothers.

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“50/50 voting rights.”2 The agreement further provided that “[p]ricing shall be suggested by
comps and presentations prepared quarterly by Dan Berg, yet voted on by members” and that
“[neither member shall have the right to sign any contract for any expenditure or purchase in
excess of $3,000”, in which case any contracts “must be signed by both members.”
31. Upon information and belief, Berg approached several banks which were local to
the property, all of whom declined to finance or otherwise be involved with their project. Upon
information and belief, one such local bank, prior to seriously considering their proposal, ran a
background check on Berg and immediately discovered his suspicious and fraudulent past.
They declined to engage in further talks with Berg or Halperin. Upon information and belief, a
second local bank similarly declined the pair.
32. Berg then pitched their project to United Bank. He went first to United Bank loan
officer Melinda Smailes, out of the Fayetteville, West Virginia branch, who customarily took
responsibility for loans in the vicinity of the property. Ms. Smailes had a “bad feeling” about Mr.
Berg and his project, and declined to be involved with it. Mr. Berg then went to Vice President
and loan officer R. Leon Cooper (“Leon Cooper”), also of the Fayetteville branch location of
United Bank. The two made an immediate connection and decided to do business together.
They discussed the project together in closed-door meetings in Mr. Cooperʼs Fayetteville
office.
33. At the behest of Mr. Cooper, United Bank agreed to form a business partnership
and joint venture with WSMR. They would finance the development itself, and also finance lot
sales to third party purchasers. They entered into a private agreement with Berg and Halperin
2The voting rights actually started off 51% Jonathan Halperin and 49% Dan Berg until such time as “funds
equaling the amount of Jonathan Halperinʼs 2nd position loan taken out for the initial closing [$269,000+/-] has
been paid off or transferred to a first position loan against the property”.

Page 9
which allowed the developers to partially pay off respective lots upon which the bank would
hold a deed of trust, and which allowed them to retain a certain percentage of the proceeds as
profit.
34. Leon Cooper was authorized by United Bank to unilaterally approve loans,
whether or not within United Bank guidelines, as long as they were at or below the amount of
$300,000.00. Mr. Cooper received a commission by United Bank on each loan he approved
and closed, whether or not the loan was within United Bankʼs lending guidelines. Upon
information and belief, during some of the months relevant herein, Cooper made loan
commissions of approximately $15,000.00 per month, paid by United Bank.
35. Upon information and belief, Leon Cooper is under federal investigation, both for
his involvement in the allegations herein, and for other frauds in which he was involved in his
capacity as an officer of United Bank, and will imminently be indicted, or charged by
information, for fraud. Upon information and belief, Walnut Springs Mountain Reserve and
related persons are also under federal investigation by the Federal Bureau of Investigation and
the Internal Revenue Service for their involvement with fraud in connection with the allegations
discussed herein, and may imminently be charged by indictment or information with federal
criminal fraud charges. Upon information and belief, Defendant United Bank is, and has been,
aware of these investigations, as well as the alleged fraudulent activity, and has hidden, and
continues to hide, these facts from its customers and clients, including WSMR purchasers and
financees.
36. On or about August 4, 2004, with little or no cash down, Berg and Halperin, via
Mountain America, LLC, closed on a 640 acre tract of property purchased from realtor Girlonza
Scott and his wife for the purchase price of $705,711.00. $300,000.00 of the purchase price

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was financed by United Bank. $200,000.00 of the purchase price was owner financed by the
Scotts. The remainder was paid using Halperinʼs home equity line of credit from his personal
residence, in the amount of $269,000.00.
37. On or about August 27, 2004, Dan Bergʼs mother, Chaya Schonberger, in her
name purchased 67.5 acres from Gary Tincher, who had owned the property since 1997, for
the purchase price of $99,000.00. The property adjoined the 640 acre tract of land on the
West side and at the very top of the mountain which was to be marketed as WSMR.
38. Upon information and belief, Ms. Schonberger had little to no assets at the time
and had to be flown to West Virginia and supported by Jonathan Halperinʼs credit card.
Nevertheless, she paid $29,040.00 down at closing, and financed the remaining $69,960.00
through Leon Cooper and United Bank, as evidenced by Deed of Trust recorded in the Office
of the Clerk of the County Commission of Monroe County, West Virginia.
39. This 67.5 acre property was under contract at the time the Provisional Operating
Agreement for Mountain America, LLC was executed. The agreement acknowledged in
Paragraph 37 that the 67.5 acres was owned by Berg and exempt from the agreementʼs
“corporate opportunity” clause.3
40. The 67.5 acre property never has been owned by Mountain America, LLC.
41. On or about October 12, 2004, Chaya Schonberger, through her son, Dan Berg
as her irrevocable power of attorney, conveyed two 5.0 acre parcels to Robert Chamberland
and Linda Shoupe, for the purported purchase price of $150,000.00 ($15,000.00 per acre).
Linda Shoupe had been hired as WSMRʼs first employee in August. Shoupeʼs longtime
3“All members hereby warrant that they are separately receiving no . . . funds, or fees or commissions . . . that
has not been previously disclosed and agreed to in writing and attached to this agreement.”

Page 11
partner, Robert Chamberland, at some point subsequently began receiving payment as a
consultant to WSMR, and then later became a WSMR employee and partner.
42. Of the $150,000.00 purchase price, $107,858.00 was financed through First
Bank of Charleston, as evidenced by Deed of Trust recorded in the Office of the Clerk of the
County Commission of Monroe County. Most, if not all, of the remaining balance consisted of
a “confidential rebate” at closing from the seller.
43. Following Schonbergerʼs conveyance to Shoupe and Chamberland, WSMR
immediately recorded a sale of two WSMR lots of 5.0 acres each, out of “Walnut Ridge, LLC”,
to two buyers, named Shoupe/Chamberland, for the amount of $150,000.00, and noted that
the price per acre was $15,000.00. No mention was made of Schonberger being the grantor of
the property, nor of Shoupeʼs or Chamberlandʼs financial relationship with WSMR, nor of the
“confidential rebate.” This sale was listed in WSMRʼs spreadsheets, as well as on their
website, all of which were presented to potential investors/purchasers, as well as United Bank
and the appraiser, and which claimed that the sale netted $15,000.00 per acre, when in
actuality the real sale price was only about $10,000.00 per acre. And even then, if you
subtract the “confidential rebate” received at closing, the per acre price would be even less.
Additionally, Shoupe and Chamberland became wards of WSMR, and thus even the lowest
calculated per acre price was not “armʼs length” since in effect WSMR itself was paying
Shoupe and Chamberland to pay the mortgage on the lots.
44. On or about May 12, 2005, Chaya Schonberger conveyed her remaining 57.5
acres to Walnut Ridge, LLC, a Nevada limited liability company, established by Berg and
Halperin, as one component of their “matrix” of LLCʼs designed to evade taxes and potential
judgments from creditors/investors, as well as to enter into partnerships with other investors

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and third parties. The partners in Walnut Ridge LLC were Berg, Halperin, Schonberger and
Peter Hatsy.
45. The deed conveying the 57.5 acres from Chaya Schonberger to Walnut Ridge
LLC excepted 5.88 acres from the conveyance to remain in the name of Chaya Schonberger.
The 5.88 acre lot was surveyed and designated as “Walnut Ridge Lot 1” and has also been
referred to as “Walnut Springs Mountain Reserve Phase 1 Lot 1.”
46. According to the deed from Schonberger to Walnut Ridge, which was recorded
and is of record in the Office of the Clerk of the County Commission of Monroe County,
consideration in the amount of $300,000.00 was paid for the property (hereinafter referred to
as the “bogus Schonberger transaction”).
47. Simultaneous with the deed conveyance to Walnut Ridge, Schonberger took out
a construction loan with Vice President Leon Cooper and United Bank in the amount of
$300,000.00 in order to build a home on the 5.88 acre lot, which is evidenced by a Deed of
Trust recorded in the Office of the Clerk of the County Commission of Monroe County.
Although she would not have qualified for the loan, Leon Cooper authorized the loan - the
maximum amount Cooper could unilaterally approve.
48. Although the $300,000.00 construction loan was within Leon Cooperʼs
authorization level, there had previously had to have been an appraisal performed. At the
time, United Bank loan officers, such as Leon Cooper, had the sole option of choosing their
own appraiser. Upon information and belief, Cooperʼs favorite appraiser, at least with regards
to WSMR, was Stan McQuade, out of Lewisburg, West Virginia, with whom he dined
frequently.

Page 13
49. A real estate purchase agreement had previously been manufactured by Dan
Berg, which, he signed on behalf of his mother, and which he also signed on behalf of himself
and Halperin, which stated that Chaya Schonberger was purchasing from Mountain America,
LLC “5.88 +/- Walnut Ridge Forest Estate Lot 1 Walnut Springs Mtn. Reserve” for the purchase
price of $294,000.00 4, with a $2,000.00 deposit and $58,400.00 cash down at closing. The
purported contract was provided to Leon Cooper and his loan processor, Bridgette Williams,
and to appraiser Stan McQuade.
50. On or about April 13, 2005, Stan McQuade completed an appraisal for Chaya
Schonbergerʼs construction loan. It noted that the property address was “Phase #1 Lot #1
Walnut Springs” and that the legal description of the property was “Deed Book 239 at page 485
being 5.88 acres Lot #1”. It noted that the lot was simultaneously being purchased by Ms.
Schonberger for the amount of $294,000.00, and gave a final estimate of value of
$656,900.00. No addendum or notes were included on the appraisal. Supervising appraiser
Thelma McQuade, Stan McQuadeʼs mother, also certified and signed the appraisal.
51. In reality, the 5.88 acres never came from Deed Book 239 at at page 485, and
never was held in the name of Mountain America, LLC. The appraisal forming the basis for
Schonbergerʼs construction loan contained false and fraudulent information, including the false
description and source for the property and the fraudulent and manufactured purchase
contract from Mountain America to Schonberger. The property had been owned by
Schonberger herself from day one and came out of the 67.5 acre property which she had
purchased - not the 640 acre property purchased by Mountain America (Deed Book 239 at
page 485).
4 Note that $294,000.00 equals exactly $50,000.00 per acre for 5.88 acres.

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52. Furthermore, there never was a transfer of $294,000.00 or $300,000.00 in
consideration for the 5.88 acres. The only $300,000.00 which ever actually existed was the
$300,000.00 construction loan approved by Leon Cooper and supported by the manufactured
real estate purchase contract and falsified appraisal. Upon information and belief,
Schonbergerʼs ownership of the 5.88 acre lot, with the home, was her payoff for her
involvement in the scheme, which she eventually cashed-in when Jonathan Halperin later
bought her out after his falling-out with Berg by purchasing the lot and home from her.
53. Additionally, upon information and belief, the $300,000 remained under the
control of Cooper and WSMR and was not spent building the Schonberger home. Rather,
some portion of the cash was sent by Dan Berg, to Schonberger, where she resided in San
Diego, California, and most likely was given to others and used for other purposes.
54. After the bogus Schonberger transaction took place, WSMR recorded a sale of
5.88 acres to a buyer named Schonberger for the amount of $294,000.00,5 (exactly
$50,000.00 per acre) out of Walnut Ridge, LLC. This purported sale was listed in their
spreadsheets, as well as on their website, all of which were presented to potential investors/
purchasers, as well as United Bank and the appraiser, and which claimed that the sale netted
$50,000.00 per acre. Interestingly, even in United Bankʼs own appraisal of the development
from August 23, 2005, obtained for purposes of their financing portions of the development
itself, conducted by appraiser Darrell Rolston, the WSMR lot sales records, which were
incorporated into the appraisal, listed a sale to Schonberger of 5.88 acres for the amount of
$294,000.00. The appraisal report was provided to Tony Ward of United Bank.6 Another
5 Sometimes the amount is listed as $300,000.00.

6 It is also interesting to note that Rolston gave the land an “as is” value of $2,000.00.

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appraisal report was provided to Ward on October 5, 2006, also performed by Rolston. The
sales and financial records incorporated into this report were nearly identical for 2005.
However, this time the purported Schonberger sale price was not listed in the master list of
WSMR lot sales.
55. The list of WSMR lot sales values on a per acre basis, as compiled by WSMR in
their financial statements, up to that point read as follows:
$15,000.00 per acre (Chamberland/ Shoupe)

$14,400.00 per acre
$8,499.00 per acre
$10,978.00 per acre
$14,525.00 per acre
$6,500.00 per acre
$6,500.00 per acre
$8,939.00 per acre
$7,663.00 per acre
$12,820.00 per acre
$8,269.00 per acre
$10,106.00 per acre
$50,000.00 per acre (Schonberger)
Thus the Chamberland/Shoupe sale provided justification and financing for the $15,000.00 and
under mortgages (although when used as a comp in appraisals, it is nearly unrecognizable as
being the Chamberland/Shoupe sale due to McQuadeʼs concealment). After the Schonberger
transaction took place, there now existed a comparable sale to increase the financing from
100-400%. Listed together, from earliest to most recent, the list looks something like this:

$14,400.00 per acre
$8,499.00 per acre
$10,978.00 per acre
$14,525.00 per acre
$6,500.00 per acre
$6,500.00 per acre
$8,939.00 per acre

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$7,663.00 per acre
$12,820.00 per acre
$8,269.00 per acre
$10,106.00 per acre
$50,000.00 per acre (Schonberger)
$34,443.00 per acre
$37,999.00 per acre
$39,999.00 per acre
$42,856.00 per acre
$48,386.00 per acre
$54,224.00 per acre
$150,000.00 per acre
...
Thus, you have two fraudulent comps enabling a number of subsequent financed sales at a
$15,000.00 or less value. Then you have a third fraudulent comp which enables all
subsequent sales after it to be of a much greater value - in the range of the fraudulent comp.
A period of less than one year is represented in the above list for nearly identical properties.
56. WSMR was simultaneously engaging in a national advertising campaign, both
online and in printed publications such as “Log Home Design” and “Southern Farm and Ranch”
and the Washington Post. Generally they would buy advertisements that look like articles with
endorsements, when in actuality they were bought and paid-for advertising. Their advertising,
both in print and on the internet, made false or greatly exaggerated claims about WSMR and
the surrounding area, and claimed that WSMR had amenities which it did not, or which never
materialized. For example, they would claim that over half of the 99 lots sold in the first year
alone, when in reality that claim was false. Additionally, on their website they claimed that
WSMR was “half sold out” in the first 8 months. In reality, only approximately 17 lots were sold
in the first year, and many of those consisted of sales of multiple lots per transaction to many
of the same individuals. They claimed that there were crystal clear lakes filled with trout and
waterfalls, which was false. Lakes were never built - only a few ponds. They claimed to be

Page 17
much closer to Lewisburg, West Virginia, a popular tourist destination, than they really were.
Sometimes they were 3 miles away; sometimes they were 17 miles away. In many instances,
it would appear as if the development were actually in Lewisburg, West Virginia. In reality it
was over 20 miles away. They claimed that taxes would be very inexpensive, which was false.
On their website they claimed that “taxes in Monroe County are incredibly low . . . land is
traditionally assessed at $1.00 per acre per year (Yes, one dollar).” (parenthetical original).
They claimed that the area was pristine when in fact a former garbage dump adjoined the
property. They claimed there would be a grand lodge with a restaurant, fitness center, game
room, and meeting rooms, which was false. They claimed there was a bed and breakfast on
the property, which there was not. They claimed 360 degree panoramic views for 60 miles,
which was false. They claimed there were existing underground utilities, which was false. In
reality, each lot has to dig itsʼ own well and is not allowed to have a septic tank or public sewer.
They printed advertisements, for instance in the 2005 West Virginia State Fair Guide, which
showed a picture of the WSMR view with a grand lodge log home “photoshopped” in one of the
fields. They advertised other photos of lakes which were “photoshopped” onto the WSMR
property. They claimed on their website that they currently had a lodge with a wellness center,
a lodge, a bed and breakfast, and a restaurant, none of which were ever built. On the
website, they followed this listing of alleged amenities with the following statement: “All of
these things are included in the price of your estate property. When you consider the actual
costs of these features you will discover that Walnut Springs is not only beautiful, but it is also
a great value and an excellent investment.” They claimed on their website that “95% of the
land in Monroe County is public land, forests, or huge private ranches” and that the “private
ranches are almost all deed restricted as ranches” and that they “can never be developed or

Page 18
used as anything else”, which was absurd and blatantly false. In reality, only 5% of Monroe
Countyʼs land was protected - about 23 square miles of national forest, and less than 1 square
mile of protected farmland.7 In the next sentence they claimed that “plus the entire region is
protected under the Federal Endangered Species Act” and that “to protect the wild animals and
the pristine countryside the government has restricted the development of roads and high
voltage power lines forever,” which is false and misleading. On their website they also said,
“we have won awards for the best water quality in the world . . .,” which is false and
outrageous.8 An October 20, 2005 Monroe Watchman article noted DEP inspector Susan
Kirschner confirmed to the paper that the WSMR developers had abandoned their attempts at
building a lake on WSMR property as they had advertised, but rather had decided to opt for
ponds, which are beneath the size threshold to require permitting, in lieu of applying for a lake
permit.9 Last, but not least, WSMR, in 2005 and 2006, listed on its website the list of lots
available and sold. Next to the sold lots WSMR would list the sale price of the lots. Most, if
not all, of the sale prices were false, and at least one of the sales never occurred.
57. When potential buyers/investors were lured to the WSMR property, including
each of the Plaintiffs herein, they were berated with the same list of gross lies, exaggerations,
and falsehoods. They were also told, that if they signed a contract, they would get a
7In 2006, this claim on the WSMR website was revised to state: “About 95 percent of the land in Monroe County,
West Virginia is either public land, protected national or state forests, or large farms and private ranches that have
been in the same family for many generations.”
8In 2006, this claim on the WSMR website was revised to state: “The water quality is so high, that water bottled at
nearby Sweet Springs has consistently won international water awards.”
9 At one point the developers even purchased a spread in Farm and Ranch magazine for another property which
they intended on buying, near Alderson, West Virginia, which advertised that the project was “currently under
construction . . . due for completion in early 2007” and that it had “three different restaurants and three
boutiques . . . stunning crystal clear lakes” and a lodge. The spread also quoted Berg as saying that “due to the
uniqueness and charm, the property is selling quickly.” However, in reality, they never even closed on the
property.

Page 19
“confidential rebate” which would pay their down payment and give them cash-back with which
to pay the mortgage payments on the property for a year, sometimes two. WSMR took out an
ad in the Washington Post at one point which advertised that WSMR would pay their down
payment for them. They were told that the property was selling uncontrollably. They were
shown lists of lots which had sold, along with sale prices and per acreage prices for each sale.
They were convinced that purchasing property in WSMR was an excellent investment; that
they could keep the property and build a home, or just flip the lot and make a profit, or both.
They were told that United Bank was working with them and had already agreed to finance
purchasers, and that no down payment would be required.
58. Prior to the “bogus Schonberger transaction” WSMR lots were being sold for a
maximum of $15,000.00 per acre, approximately, which were the maximum comps available in
WSMR thus far. See Paragraph 55 above.
59. After experiencing the salesmanship and representations of WSMR employees,
and after relying on United Bankʼs representations regarding WSMR, Plaintiffs Michael and
Vivian Hollandsworth closed on Cherry Slopes Mountain Estate 5 on or about May 19, 2005.
United Bank financed, through Leon Cooper, and Defendant McQuade performed the
appraisal, which was signed on April 15, 2005. McQuade used the following comps: the
Chamberland/Shoupe sale, and two early sales, one for $14,400.00 per acre, and one for
$8,938.00 per acre. The Chamberland/Shoupe sale showed the highest value, with an alleged
armʼs length sale price of $15,000.00 per acre. The $14,400.00 sale was, upon information
and belief, an unverified cash deal. The $8,938.00 sale was, upon information and belief, a
sale to a realtor as part of her agreement to construct a home on the lot, and which also relied
on the Chamberland/Shoupe sale.

Page 20
60. When the Hollandsworths purchased, they relied on the representations of
United Bank that the WSMR development was legitimate, and that there was a legitimate basis
underlying the mortgage they were financing, including appraisals which were not obvious
frauds. Neither should they have been expected to know that officers of United Bank itself
would be taking part in manufacturing fraudulent sales to be used as comps to justify their
inflated financing, which ultimately, would leave them with a nearly-valueless property.
61. The Hollandsworths had no idea that fraud had taken place. They first learned of
the fraudulent appraisals and other misconduct during the course of this litigation. As with the
other victims, their appraisals contained information which was camouflaged and nearly devoid
of identifying information. Only the bank, the appraisers, and WSMR could have known of the
fraud and misconduct which occurred.
62. At this time, there were no available comps to justify financing in excess of
$15,000.00. The per acreage sales thus far consisted of the following per acreage values:
$14,400.00, $15,000.00 (Chamberland/Shoupe), $8,499.00, $10,978.00, $14,525.00
(Hollandsworth sale), $6,500.00, $6,500.00, $8,939.00, $7,663.00, $12,820.00, $8,269.00,
$10,106.00. See Paragraph 55 above.
63. The sale with the per acreage value of $7,663.00 was Plaintiff James Carroll, Jr.,
who financed through Defendant United Bank and Defendant Leon Cooper on or about March
1, 2005. The sale with the per acreage value of $10,978.00 was Plaintiff Jan Jerge, who also
financed through United Bank and Defendant Cooper on or about March 25, 2005. The sale
with the per acreage value of $7,038.00 was Plaintiffs James and Shayna Mackey. The
Mackeys nearly financed with United Bank, as they were urged to do by WSMR. However,
they ended up purchasing the property using a home equity loan on or about February 10,

Page 21
2005. Carroll, Jerge, and the Mackeys first learned of the fraudulent appraisals and other
misconduct during the course of this litigation. As with the other victims, their appraisals
contained information which was camouflaged and nearly devoid of identifying information.
Only the bank, the appraisers, and WSMR could have known of the fraud and misconduct
which occurred.
64. Carroll, Jerge, the Hollandsworths, and the Mackeys, all decided to purchase
property in WSMR based on representations made to them by WSMR that the property would
be a great investment. They were given misrepresentations regarding the value of the
property, regarding the amenities, and regarding the characteristics and quality of the property.
See Paragraph 56 above. They also relied on the representations made to them by United
Bank. Carroll, Jerge, the Hollandsworths, and the Mackeys, all communicated with United
Bank regarding purchasing at WSMR. It was represented to all of them that United Bank was
financing the development, both for the developer and for the purchasers, and that they were
intimately knowledgeable about the development and that they were working with WSMR.
These plaintiffs did not believe that United Bank would allow fraud to occur, nor that they would
finance their mortgages on these properties if the value was not substantiated.
65. Carroll, Jerge, the Hollandsworths, and the Mackeys all purchased early, all paid
less than subsequent purchasers, and all still own their WSMR properties. However, even
though they paid much less, they are still unable to sell the properties to third parties - and the
properties, like those who paid much more, are also nearly worthless. Though they may not
have suffered as great financially, they have suffered greatly, both financially and emotionally.
66. These purchases took place from February through May of 2005. None of them
had a per acreage sale value of over $15,000.00. Less than thirty days later, the purchases

Page 22
of subsequent lot purchasers, all financed through United Bank, would be closing, with 100%
or more financing for per acreage values of $20,000.00, $30,000.00, and $50,000.00 per acre
and more. The difference was the inclusion of the “bogus Schonberger transaction” as a comp
in the subsequent purchasersʼ appraisals, as well as the use of comps based on the “bogus
Schonberger transaction” which had not yet taken place. Defendant United Bank, in less than
thirty days, had increased their 100% financing for nearly identical properties by 100-400%,
with the same appraisers involved, and the same loan officers and bank executives involved.
The only difference was the purchasersʼ identity and the insertion of fraudulent appraisals.
67. There was so much cash flowing through WSMR at this time, that one of the
purchasers observed Dan Berg walk behind the WSMR sales office during a local car show,
and purchase a custom antique car for $80,000.00 in cash from WSMRʼs bank account. One
email between Jonathan Halperin and Dan Berg only contained the subject line “$$$$$$$$$$”.
68. On or about June 6, 2005, Plaintiffs Sergio Baez purchased a 9.5 acre lot in
WSMR, financed by United Bank (hereinafter referred to as the “Baez” sale).10 The purchase
contract, which was submitted to United Bank and the appraiser, and the deed both stated that
the consideration paid by the purchasers was $229,995.00. Leon Cooper, through his loan
processor, Bridgette Williams, requested Stan McQuade to perform an appraisal for the loan.
The appraisal required the use of three comparable sales in order to justify the purchase price.
The first comparable used was the bogus Schonberger transaction, where 5.88 acres was
allegedly sold for $294,000.00, which of course never occurred. The second comparable used
was the sale of a WSMR lot to a purchaser named Peter Calderon of 12 acres for the amount
10 Sergio Baez was also the first true third party purchaser of any lot at WSMR. On or about September 20, 2004,
he purchased a 12.95 acre lot for the amount of $110,062.00, which he later sold back to WSMR for $110,062.00.
The same day WSMR sold the lot to a third party for a substantial profit. The first Baez sale of 12.95 acres is one
of the sales listed in Paragraph 55 above.

Page 23
of $300,000.00. Although Calderon did purchase a lot in WSMR, he had not yet done so, as
his purchase took place later - on or about July 14, 2005. Stan McQuade was also
subsequently requested to perform an appraisal on the Calderon loan as well, which also was
financed by United Bank. However, the appraisal for the Calderon property was itself
performed subsequent to the Baez appraisal. Thus there were appraisals that both relied on
each other for their appraisal value. Upon information and belief, no down payment was made
by Baez, and a “confidential rebate” was given “by” WSMR in an amount which paid the
roughly $56,000.00 down payment, and also gave cash-back to Baez at closing. The amount
financed was roughly $172,400.00. But the Baez deed, which was recorded in the Office of
the Clerk of the County Commission of Monroe County, listed a consideration amount, under
its consideration clause, of $229,995.00. WSMR also recorded a sale in is books and records
of a 9.5 acre lot for $229,000.00, claiming a per acreage sale value of over $24,000.00 per
acre, which in turn was submitted to United Bank, Stan McQuade, listed on their website, and
shown and quoted to new potential purchasers looking at the WSMR property.
69. When Plaintiff Baez purchased, he relied on the representations of United Bank
that there was a legitimate basis underlying the mortgage he were financing, including
appraisals which were not obvious frauds. Neither should he have been expected to know that
officers of United Bank itself had taken a part in manufacturing fraudulent sales to be used as
comps to justify his inflated financing.
70. Plaintiff Baez had no idea that fraud had taken place. He first learned of the
fraudulent appraisals and other misconduct during the course of this litigation. As with the
other victims, his appraisals contained information which was camouflaged and nearly devoid

Page 24
71. Eventually Baezʼs loan ballooned and he was unable to refinance, pay it off, or to
sell the property to a third party. Baez suffered considerably due to the fraud which was
perpetrated on him by the Defendants, even directly leading to the divorce of he and his wife,
Cheryl.
72. Interestingly, when the 9.5 acre Baez lot was later foreclosed upon by United
Bank, and a new appraisal was sought by United Bank to determine a listing price for the
property. On or about September 25, 2009, Mr. McQuade submitted an appraisal for this
property which was vastly different from his first appraisal of this property, and very critical to
WSMR and which made, among others, the following statements and conclusions:
a. WSMRʼs website boasts about a large community lodge, supposedly the
centerpiece of the WSMR community, that has not yet been built;
b. “out of state people purchase property for what they think is a deal, when the
local people are laughing...”;
c. “On the MLS Service covering this area, 503 [development] properties are listed
for sale in [similar] developments. Of those 503 properties, 5 have sold in the time frame from
9/23/2008 to 9/23/2009.”;
d. “I did not locate any underground utilities, or see any improvements such as a
well cap (well water).”
e. “A personal interview with the new owner of the log home at the top of the
development . . . above the subject site, purchased the home three months ago for the sum of
$699,000.00. The home was approximately 2,300 square feet of living space, and I think 5.00

Page 25
acres. The home was built by the developer for himself. The sale is the first armʼs
length transaction in Walnut Springs.” (emphasis added).11
f. Yet Mr. McQuade remained optimistic regarding United Bankʼs interest in the lot.
He concluded his appraisal by opining that “the subject has a listing price of $145,000.00, this
appraiser feels that that asking price is not inflated, that the property will sell by one of two
methods, luck or lots of money in advertising to areas outside the local population.” 12 Upon
information and belief, the lot has not sold at any price.
73. On or about July 14, 2005, Plaintiff Peter Calderon, a New York attorney, closed
on his 12 acre lot in WSMR for the purported purchase price of $300,000.00 (hereinafter
referred to as the “Calderon” sale). This loan was also financed through United Bank, with
Vice President Leon Cooper still being the loan officer and Bridgett Williams still being
Cooperʼs loan processor. Cooper again requested that McQuade perform the appraisal.
McQuade did the appraisal, and used the following three comparables: the Baez sale of
$229,995 for 9.54 acres (which had itself used the Calderon sale as a comparable), the
Shoupe/Chamberland sale of 10.0 acres for $150,000.00 (he actually altered the numbers
slightly to read $155,400 for 10.36 acres), and a sale of a WSMR lot to Neil Welsh and Joseph
Kim of $415,995 for 13.55 acres. Although Neil Welsh and Joseph Kim did purchase the lot,
they had not yet done so at the time the appraisal was completed (June 2, 2005). Stan
11 This lot referred to is Walnut Ridge Lot 1, also known as the Walnut Springs Phase 1, Lot 1. This is the lot
allegedly purchased by Chaya Schonberger, as discussed in detail in the preceding paragraphs and referred to as
the “bogus Schonberger transaction”. In this appraisal, Mr. McQuade acknowledges that this was the developer,
Dan Berg, acting himself. This is the same purported sale that Mr. McQuade used in almost all of his early
appraisals - none of which at that time noted that the purported sale was to the developer himself. In fact, that all
represented that there were “no apparent” sales or financing concessions and that they were all arms-length
transactions.
12 Note that Mr. McQuade performed the original appraisal for this property when the Baezsʼ originally purchased
it, in which he gave the property a final estimate of value of $237,500.00. This was not mentioned in the post-
foreclosure appraisal.

Page 26
McQuade also subsequently performed the appraisal for the Welsh/Kim loan, also financed by
United Bank, but had not done so at the time of the Calderon appraisal. Again, there were
mirror image appraisals, each using the other as comparable basis of value. So far, there was
not a single non-fraudulent or armʼs length transaction used as a basis for the WSMR
appraisals, though three are required pursuant to law and professional appraisal standards.
74. At this time, Berg was harassing Cooperʼs loan processor, Bridgett Williams, and
even threatened to have her murdered if she did not help Leon Cooper get pending
questionable loans closed. Williams reported this to the bank president and also complained
about being forced to push these loans through that were questionable. He then transferred
responsibility for WSMR to another Vice President and loan officer, Joyce Durham, out of the
Charleston, West Virginia branch of United Bank. However, the branch President failed to look
further into the questionable sanity or legitimacy of Berg and WSMR, or his dealings with Vice
President Leon Cooper. Defendant United Bank furthermore failed to closely examine the
WSMR/Cooper loan files. If they had, the fraud could have been discovered and ended prior
to the Plaintiffs purchasing and closing on their WSMR lots.
75. At the Calderon closing, WSMR listed the consideration amount on the recorded
deed of $300,000.00. The purchase contract listed a purchase price of $300,000.00, with
$225,000.00 financed and the remainder consisting of cash down payment at closing.
However, no cash down payment was required of the purchaser, and WSMR “paid” a
“confidential rebate” to the purchaser, $73,000 of which in turn went back to WSMR as the
down payment, and the remainder in cash went to the purchaser. The remaining cash,
approximately $30,000.00, was then placed into an escrow account wherein United Bank
controlled the funds and automatically drafted the mortgage interest payments monthly for the

Page 27
next two years. Thus, the “confidential rebate” was approximately one third of the purchase
price - or exactly $101,000.00. Nevertheless, WSMR recorded a sale in itʼs books and records
of a 12 acre lot for $300,000.00, claiming a per acreage sale value of over $25,000.00 per
acre, which in turn was submitted to United Bank, Stan McQuade, listed on their website, and
shown and quoted to new potential purchasers looking at the WSMR property. In reality, there
was no real purchase value of $25,000.00 per acre. Rather, only $225,000.00 was technically
“paid” through the United Bank loan. The rest of the purchase price was “paid” by the
“confidential rebate”. Either that rebate came out of the loan itself rather than being a true
“rebate”, or the purchase price should be lowered by the amount of the “rebate”. Thus, it is
fraud one way, and fraud the other way. In the event that the “rebate” did not come out of the
loan, or even if you consider it as a rebate, the purchase price really was less than
$152,000.0013, which nets a per acre value of only $12,666.66 - which still is not armʼs length
cash because it was 100% financed. United Bank was well aware of the confidential rebate,
as well as the appraisers subsequent use of the Calderon sale as a comparable. However, Mr.
Calderon was not. He first learned of the fraudulent appraisals and other misconduct during
the course of this litigation. As with the other victims, their appraisals contained information
which was camouflaged and nearly devoid of identifying information. Only the bank, the
appraisers, and WSMR could have known of the fraud and misconduct which occurred.
76. When Plaintiff Calderon purchased, he relied on the representations of United
Bank that there was a legitimate basis underlying the mortgage he was financing, including
13 $225,000.00 loan minus the $73,000.00 down payment paid by the “confidential rebate”. Since cash would
have gone to Calderon at closing, the real purchase price could be much less than $152,000.00. If Calderonʼs
cash rebate was similar to other rebates which have been verified by the Plaintiffs, it would likely be as little as
$117,000.00, which would net a real per acre price paid of only around $9,750.00, rather than the represented
price of $25,000.00 per acre.

Page 28
appraisals which were not obvious frauds. Neither should he have been expected to know that
officers of United Bank itself had taken a part in manufacturing fraudulent sales to be used as
comps to justify their inflated financing.
77. On or about June 24, 2005, Neil Welsh and Plaintiff Joseph “Teddy” Kim
purchased two lots at WSMR (hereinafter referred to as the “Welsh/Kim” sale). Neil Welsh was
previously an acquaintance of Jonathan Halperin in Washington D.C., employed as a car
salesman. Plaintiff Joseph “Teddy” Kim was a childhood acquaintance of Welsh, who inherited
an interest in his fatherʼs business and had some access to credit. He now is President of a
corporation employing approximately 200 people. Upon information and belief, Halperin and
Welsh were mutual acquaintances. Upon information and belief, Welsh had previously had
numerous discussions with both Halperin and Berg regarding investment and employment with
WSMR. Since Welsh had little to no assets, and no access to credit due to his income being
based on commission, he contacted his friend Joseph Kim about WSMR. He convinced him to
talk with Halperin and to look at the property. Welsh and Halperin convinced Plaintiff Kim to
partner with Welsh in purchasing two lots in WSMR for an exorbitant purported amount of
money. The pair signed a real estate contract with WSMR to purchase 21.28 acres for the
amount of $665,990.00. The contract specified that $249,995.00 was being paid for one lot
consisting of 7.27 acres, and $415,995.00 for another lot consisting of 13.553 acres. However,
the pair still had no cash to put down in the transaction, and not enough credit. When they first
applied for a loan with United Bank, they could only qualify for $300,000.00. Upon information
and belief, this was because Vice President Leon Cooper could only unilaterally approve a
loan of up to $300,000.00. Mr. Kim was under the impression that they could not go through
with the deal. One day later Mr. Kim received a call from United Bank, this time from Joyce

Page 29
Durham, informing him that the deal was now going to go through, and that they could now get
approval for up to $449,492.50 in financing. Upon information and belief, the new Vice
President loan officer responsible for WSMR, Joyce Durham, now had the ability to approve
loans in excess of $300,000.00. Upon information and belief, Berg was now dealing directly
with Joyce Durham and her loan processor, Christy Plantz.
78. Upon information and belief, Welsh, Halperin and Berg conspired to convince
Plaintiff Kim to access his credit, and unknowingly assist them in manufacturing a fraudulent
sale value for purposes of subsequent use as a comparable in appraisals. As soon as Welshʼs
employment with WSMR terminated, Welsh absconded from his responsibility on the loan,
leaving Mr. Kim to fend for himself.
79. Leon Cooper, who initially had communicated with Mr. Kim, had already
requested that Stan McQuade perform the Welsh/Kim loan appraisal, which he did. McQuade
used the following comps to justify the alleged purchase price: the Baez sale of $229,995.00
for 9.5 acres (the Baez appraisal itself used the Welsh/Kim sale as a comparable), the bogus
Schonberger transaction of $294,000.00 for 5.88 acres (which never took place), and the
Calderon sale of $300,000.00 for 12 acres (the Calderon appraisal also used the Welsh/Kim
sale itself as a comparable). Once again, you had appraisals which used each other as a
basis for comparable sale values justifying the inflated financing - none of which were actually
real armʼs length sales for the listed amount and acreage, and none of which had actually
taken place at the time the appraisals were performed. Nowhere among the “comps” used
was there an arms-length transaction. And it would have been obvious to United Bank, or to
Stan McQuade that this was the case. After the appraisal had been submitted to United Bank,
Joyce Durham approved the appraisal and the loan, and the loan closed. No cash was paid at

Page 30
closing by either Welsh or Kim. They received a “confidential rebate” which purported to pay
the difference between the loan amount and the purchase price ($216,490.00) and then paid
them approximately $30,000.00 in cash at closing.
80. Prior to the Welsh/Kim closing, Neil Welsh had been offered a full-time job as
Director of Marketing and salesman for WSMR. Joseph Kim felt confident in entering into the
deal because he knew that Welsh would be a WSMR employee.14 As usual, the appraisal and
financial records did not disclose the financial relationship between Welsh and WSMR.
81. Following the Welsh/Kim closing, WSMR immediately recorded a sale in itʼs
books and records of a 13.5 acre lot for $415,000.00, claiming a per acreage sale value of
over $30,000.00 per acre, which in turn was submitted to United Bank, Stan McQuade, listed
on their website, and shown and quoted to new potential purchasers looking at the WSMR
property. WSMR also recorded the sale of the 7.27 acre lot for $249,000.00. Though in reality,
the only real money which was exchanged was $449,995.00, financed through United Bank,
which was for the entire 21.28 acres, which is over $200,000.00 less than the purported real
sale price. Again, even assuming that the “rebate” did not come out of the loan itself, the real
price financed was far below the represented sale price.
82. Plaintiff Kim still owns his property at WSMR. However, the whole ordeal has
caused him severe financial harm. Kim has struggled for years to make the exorbitant
installment payments on his United Bank loan - without the help of Neil Welsh. United Bank
placed a notice on Kimʼs credit report that he was failing to pay a $60,000.00 monthly
installment which was due. This has caused Kim the denial of access to the credit necessary
14 At this time, Neil Welsh began selling properties on behalf of WSMR although he was not working under a
licensed real estate broker. Halperin later had his friend and partner Thanos Basdekis obtain a brokerʼs license.
The broker under whoʼs license real estate was last sold at WSMR is Charles McCue.

Page 31
to run his business, and manage his personal affairs - including even denying him the ability to
lease or buy a vehicle after the expiration of his car lease. This act by United Bank destroyed
Mr. Kimʼs personal and commercial lines of credit. He is unable to qualify for bonds necessary
for his company to bid for contracts, and he is now being forced to sell his office buildings in
order to find a way to access capital. He may soon be forced to sell his business due to his
ruined credit.
83. Plaintiff Kim first learned of the fraudulent appraisals and other misconduct
during the course of this litigation. As with the other victims, their appraisals contained
information which was camouflaged and nearly devoid of identifying information. Only the
bank, the appraisers, and WSMR could have known of the fraud and misconduct which
occurred. As with the others, Plaintiff Kim relied on the representations of United Bank that
there was a legitimate basis underlying the mortgage he was financing, including appraisals
which were not obvious frauds. Neither should he have been expected to know that officers of
United Bank itself had taken a part in manufacturing fraudulent sales to be used as comps to
justify his inflated financing. As with other purchasers who have attempted refinancing with
other banks, subsequent bankers have told Kim that thereʼs no way this loan should have been
made, just looking at his 2005 credit score and loan application.
84. United Bank Vice President and loan officer Joyce Durham was fully aware of the
“confidential rebates” which were developed by fellow Vice President Leon Cooper and Dan
Berg, and being offered and utilized by WSMR. Initially, both through Leon Cooper, and
through her own loans, the “confidential rebates” were not being disclosed on the settlement
statement/ HUD forms. As per corporate policy, each United Bank loan officer has the
responsibility of reviewing the loan documents, as well as the appraisals for each loan made

Page 32
by them. There is actually a sign off sheet for such things, where the loan officer is required to
sign their approval by initialing certain information. If the loan is in excess of their authority
amount, other United Bank officials are required to do so. Upon information and belief, Joyce
Durham is more than just a loan officer, but a Vice President of mortgages generally for United
Bank.
85. For example, on or about July 15, 2005, Plaintiffs Lon and Louise Fountain, who
were at that time close personal friends of Jonathan Halperin, purchased Walnut Ridge Forest
Estate 10 in WSMR, which consisted of 5.50 acres for the purported purchase price of
$99,995.00. However, there was a “confidential rebate amount of $20,000.00. This “rebate”
did not appear on the Fountainsʼ settlement statement, in violation of state and federal law.
The consideration amount listed on the deed was $99,995.00. WSMRʼs financial records also
recorded a sale of 5.50 acres for $99,995.00. The Fountains also financed with United Bank.
Not surprisingly, their appraisal, requested by United and performed by Defendant McQuade,
was also fraudulent. It included both the Chamberland/Shoupe sale and the Baez sale as
comps. As with other purchasers, they had no idea what comps were being used for the
appraisals because they were utterly camouflaged in such a way that the purchasers could not
confirm the validity of the comps. There were no names included, no deed book numbers or
page numbers included, and some of the figures were skewed.
86. When the Fountains purchased, they relied on the representations of United
Bank that there was a legitimate basis underlying the mortgage they were financing, including
appraisals which were not obvious frauds. Neither should they have been expected to know
that officers of United Bank itself had taken a part in manufacturing fraudulent sales to be used
as comps to justify their inflated financing.

Page 33
87. The Fountains had no idea that fraud had taken place. They first learned of the
88. At some point Durham communicated to WSMR that “we are going to have to
start disclosing them [the rebates] on the settlement statements.” As with Cooper, Durham
was also fully aware that no cash was actually being paid at closing by most of the purchasers,
and that purchasers were themselves receiving cash at closing.
89. Upon information and belief, the cash being utilized as a “confidential rebate”
came out of the United Bank loans. Thus each purchaser receiving one was told that they
were receiving “free money,” but in reality was receiving a cash advance out of their own high-
interest rate 3 year-balloon loan. Instead of realizing instant equity out of their purchase, as
they were told, they were starting out day one in a deep debt and “upside down” in their loan,
in which the only way out was through paying the loan off with other assets, or through
refinancing at a higher interest rate through United Bank. Other banks wouldnʼt touch the
loans, and this is the reason there continue to be foreclosures of WSMR lots - all of which have
been purchased by United Bank.
90. On or about August 24, 2005, after hearing Dan Bergʼs and salesman Neil
Welshʼs sales pitches, and viewing the property, Wayne and Lucy Cliburn agreed to purchase
7.0 acres in WSMR for the amount of $299,995.00, financed through United Bank. WSMR
submitted a letter to the Cliburns certifying that they were receiving a “confidential rebate” from
WSMR at closing in the amount of $56,999.50. The Cliburns declined to accept cash-back at

Page 34
closing, thus the “rebate” amount went solely to reducing the amount financed by the Cliburns,
which was $241,996.00. As with the other closings, no cash was paid by the Cliburns at
closing. United Bank Vice President and loan officer Joyce Durham requested Stan McQuade
to perform the appraisal.
91. The Cliburn appraisal, as with the other McQuade appraisals, was sparse with
detail, and used three comparable sales which were cloaked in anonymity and bereft of any
names or other identifying features. The three “comps” were: the bogus Schonberger
transaction of $294,000.00 for 5.88 acres, the Calderon sale of $300,000.00 for 12 acres
(based on the Baez sale, the Welsh/Kim sale, and the Chamberland/Shoupe sale), and the
Welsh/Kim sale of $415,000 for 13.55 acres (based on the Baez sale, the bogus Schonberger
transaction, and the Calderon sale). The recorded deed for the Cliburn sale listed the
purchase price as $299,995.00 for 9.77 acres. WSMR immediately recorded a sale in itʼs
books and records of a 7 acre lot for $299,995.00, claiming a per acreage sale value of over
$42,856.00 per acre, which in turn was submitted to United Bank, Stan McQuade, listed on
their website, and shown and quoted to new potential purchasers looking at the WSMR
property. The Cliburn sale would be repeatedly used as a comparable in loan applications for
subsequent purchasers of lots at WSMR through United Bank. The amount used as a
comparable and listed in sale records was $299,995.00 for 7 acres, rather than the true
$241,996.00 for 9.77 acres. Moreover, even the true sale amount was based on financing that
was the product of mortgage fraud, bank fraud and appraisal fraud, and thus was not even
justified in its own right.
92. When the Cliburns purchased, they relied on the representations of United Bank
that there was a legitimate basis underlying the mortgage they were financing, including

Page 35
93. The Cliburns had no idea that fraud had taken place. They first learned of the
94. On or about September 1, 2005, Charles and Cynthia Evans, after experiencing
salesmanship from Berg and Welsh similar to what was experienced by the Cliburns,
purchased a 9.01 acre lot in WSMR for the purported purchase price of $309,995.00, also
financed through United Bank. WSMR submitted a letter to the Evans certifying that they were
to receive a “confidential rebate” at closing in the amount of $77,497.50, which was to pay the
cash due at closing of $28,999.50 (back to WSMR) and the excess going to the Evans in cash
at closing, in the amount of $45,497.02.
95. United Bank Vice President and loan officer, Joyce Durham, through her loan
processor, Christy Plantz, requested Stan McQuade to do the Evans loan appraisal. The
Evans appraisal, as with the previous appraisals, was sparse in detail and used “comps” which
were cloaked in anonymity. The three “comps” used were: the bogus Schonberger transaction
of $294,000.00 for 5.88 acres, the Calderon sale of $300,000.00 for 12 acres (based on the
Baez sale, the Welsh/Kim sale, and the Chamberland/Shoupe sale), and the Welsh/Kim sale
(based on the Baez sale, the bogus Schonberger transaction, and the Calderon sale).

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96. The recorded deed for the Evans sale listed the consideration paid for the
property at $309,995.00 for 9.01 acres. WSMR immediately recorded a sale in itʼs books and
records of a 9 acre lot for $309,995.00, claiming a per acreage sale value of over $34,405.66
per acre, which in turn was submitted to United Bank, Stan McQuade, listed on their website,
and shown and quoted to new potential purchasers looking at the WSMR property. The Evans
sale would be repeatedly used as a comparable in loan applications for subsequent
purchasers of lots at WSMR through United Bank. The amount used as a comparable and
listed in sale records was $309,995.00 for 9.01 acres acres, rather than the true $278,000.00
for 9.01 acres, which was financed, or the amount of $232,497.50 which would be the true
sale amount if the “confidential rebate” were not coming out of the purchaserʼs loan. Moreover,
even the true sale amount was based on financing that was the product of mortgage fraud,
bank fraud and appraisal fraud, and thus was not even justified in its own right.
97. When the Evans purchased, they relied on the representations of United Bank
98. The Evans had no idea that fraud had taken place. They first learned of the

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99. On or about September 9, 2005, Obie Woods, after being contacted by Neil
Welsh, a childhood friend, was convinced to purchase a 6.21 acre lot in WSMR for the
purported purchase price of $299,995.00, financed by United Bank. Woods experienced
similar salesmanship and representations from Welsh and Berg, as had the Evans and the
Cliburns. The United Bank loan was for the amount of $269,995.00. Woods received a letter
from WSMR certifying that he would receive a “confidential rebate” in the amount of
$46,141.17, which would be paying WSMR the down payment of $30,000.00, and the
remaining $16,141.70 would be paid in cash to Woods at closing.
100. United Bank Vice President and loan officer, Joyce Durham, through her loan
processor, Christy Plantz, requested Stan McQuade once again to perform the appraisal of the
Obie Woods property. The Woods appraisal is almost identical to the previous appraisals. The
“comps” used were: the bogus Schonberger transaction of $294,000.00 for 5.88 acres, the
Welsh/Kim sale of $415,000.00 for 13.55 acres (based on the Baez sale, the bogus
Schonberger transaction, and the Calderon sale), and the Evans appraisal (based on the
bogus Schonberger transaction, the Calderon sale, and the Welsh/Kim sale).
101. The Obie Woods deed, which was recorded in the Office of the Clerk of the
County Commission of Monroe County, listed a consideration amount of $299,995.00 for 6.21
acres. WSMR immediately recorded a sale in itʼs books and records of a 6.21 acre lot for
$299,995.00, claiming a per acreage sale value of $48,308.73 per acre, which in turn was
submitted to United Bank, Stan McQuade, listed on their website, and shown and quoted to
new potential purchasers looking at the WSMR property. The Woods sale would be repeatedly
used as a comparable in loan applications for subsequent purchasers of lots at WSMR through
United Bank. The amount used as a comparable and listed in sale records was $299,995.00

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for 6.21 acres, rather than the true $269,995.00 for 6.21 acres, which was financed, or the
amount of $253,853.00 which would be the true sale amount if the “confidential rebate” were
not coming out of the purchaserʼs loan. Moreover, even the true sale amount was based on
financing that was the product of mortgage fraud, bank fraud and appraisal fraud, and thus
was not even justified in its own right.
102. When Plaintiff Woods purchased, he relied on the representations of United Bank
that there was a legitimate basis underlying the mortgage he was financing, including
as comps to justify his inflated financing.
103. Plaintiff Woods had no idea that fraud had taken place. He first learned of the
other victims, his appraisals contained information which was camouflaged and nearly devoid
104. On or about September 1, 2005, Plaintiffs Salvatore and Mary Zambri purchased
a 2.0 acre lot in WSMR for the purported purchase price of $300,000.00, which netted a per
acre price of $150,000.00 per acre, the highest yet in WSMR (which they quickly documented
as a $150,000.00 per acre sale). Mr. Zambri, who was then a junior partner in Jonathan
Halperinʼs law firm, had been approached by Halperin and Berg to invest in WSMR. Berg and
Halperin proposed that he and his family invest in certain WSMR lots, such as the 2.0 acre lot
on “Whispering Hollow Lake”, which he did end up doing. The recorded deed listed a
consideration amount of $300,000.00 for 2 acres. However, there was an agreement between

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WSMR and the Zambris that WSMR would pay for all financing and purchase costs, including
the down payment and all mortgage payments. The Zambris financed $207,000.00 with
United Bank, as evidenced by a deed of trust of record in the Office of the Clerk of the County
Commission of Monroe County. Furthermore, a second deed of trust exists with regard to this
transaction: a deed of trust from the Zambris to Greentree, LLC, a West Virginia limited liability
company, one of WSMRʼs “matrix” of LLCʼs designed to evade taxes, judgments, as well as to
enable silent partnerships in WSMR. This second position deed of trust on the said 2.0 acres
consists of $70,000.00 owner financing, at zero percent (0%) interest, and no payments until
the note comes due in three years. There was no cash paid by the Zambris at closing which
made up for the difference between these two loans and the purported purchase price. The
principals of Greentree, LLC were at this time: Mountain America, LLC (50% Berg and 50%
Halperin) and Robert Chamberland and LInda Shoupe. There was an agreement between
WSMR, and the Zambris, that WSMR would buy back, at the Zambrisʼ option, the property
after a home was constructed. United Bank was aware of the owner financing, as well as
WSMRʼs agreement to pay for the financing and mortgage costs, including the buyback
agreement.
105. United Bank Vice President and loan officer Joyce Durham requested Stan
McQuade to again perform the appraisal for the Zambri property. Although the deed stated
consideration paid of $300,000.00, McQuade was aware of the owner financing because it was
disclosed on the real estate purchase contract, which he was given. On the appraisal he put
the purchase price at $230,000.00, and thus $115,000.00 per acre. The appraisal was almost
identical to the previous ones and used the following “comps”: the bogus Schonberger
transaction of $294,000.00 for 5.88 acres, the Welsh/Kim sale of $415,000.00 for 13.55 acres

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(based on the bogus Schonberger transaction, the Baez sale, and the Calderon sale), and the
Evans sale of $309,995.00 for 9.55 acres (based on the bogus Schonberger transaction, the
Welsh/Kim sale, and the Calderon sale). Although in this appraisal McQuade used the
$230,000.00 figure as the purchase price, he subsequently used the Zambri sale as a “comp”
on subsequent appraisals. On those appraisals the sale was listed as $300,000.00 for 2.0
acres, netting a $150,000.00 per acre value, despite the fact that both United Bank and the
appraiser knew that the sale price was not in fact $300,000.00, and despite the fact that
McQuade noted on the Zambri appraisal itself that the true alleged sale price was $230,000.00
(before the “confidential rebate”).
106. Plaintiffs Salvatore Zambri, along with his father and brother, Plaintiffs Joseph
Zambri and Anthony Zambri, through Zambri Enterprises, LLC, a Maryland limited liability
company, which exists solely to hold this subject property, purchased the Horizon Woods
Forest Estate 5 lot in WSMR, which occurred contemporaneously with the Whispering Hollow
Lake purchase on or about September 14, 2005. The purported purchase price was
$249,995.00 for 6.50 acres. There was a “confidential rebate” of $69,248.62, of which United
Bank was well aware, since it was listed on the settlement statement in bold letters. WSMR
recorded a sale of 6.50 acres for $249,995.00. Defendant McQuade subsequently used this
purchase as a comp on subsequent purchasersʼ appraisals. In the Horizon Woods 5 Zambri
appraisal, Defendant McQuade used the following comps: the “bogus Schonberger
transaction”, the Evans sale, and the Welsh/Kim sale.
107. Also contemporaneously, Zambri Enterprises, LLC purchased another WSMR lot
- Horizon Woods Forest Estate 4, also 6.50 acres, but for the purchase price of $99,000.00.
There was a “confidential rebate” of $9,995.00. United Bank financed and McQuade

Page 41
performed the appraisal. The following comps were used on the Horizon Woods 4 Zambri
appraisal: the Chamberland/Shoupe sale, the Baez sale, and an unverified cash deal that took
place early-on for less than $15,000.00 per acre. WSMR recorded a sale of $99,000.00.
108. When the Zambris purchased, they relied on the representations of United Bank
109. At this time the Zambris knew nothing about the fraud which was taking place at
WSMR. They first learned of the fraudulent appraisals and other misconduct during the course
of this litigation. As with the other victims, their appraisals contained information which was
camouflaged and nearly devoid of identifying information. Only the bank, the appraisers, and
WSMR could have known of the fraud and misconduct which occurred.
110. In effect, a pyramid of appraisals was being built. On the first level there was the
bogus Schonberger transaction and the Shoupe/Chamberlain transaction, all investors in
WSMR. Then came Sergio Baez and Peter Calderon, true third party purchasers, but their
appraisals were based on the Schonberger transaction, Shoupe/Chamberlain, and Welsh/Kim,
which hadnʼt happened yet. Then came Welsh/Kim, based on Baez, Calderon, and
Schonberger. On the next level were the Cliburns, the Evans, and Obie Woods, and Zambri,
all based on Schonberger, Calderon, and Welsh/Kim (additionally Woods and Zambri was also
based on Evans). Then, the next level built the pyramid further. In subsequent appraisals,
Schonberger would continue to be used in just about every appraisal since it had one of the
highest prices per acre. Welsh/Kim would also be used since it also netted a high price per

Page 42
acre. Then the third “comp” would be either Woods, Cliburn, or Evans, since all three were
high per acreage prices. The result was a pyramid of fraudulent value inflation for WSMR
properties and corresponding financing based on said inflated values.
111. Other plaintiffs included herein had similar experiences and were also included
on the appraisal pyramid. For instance, on or about August 24, 2005, Plaintiffs Stephen Rice
and Laureen Rice, who were shown and described lists of prior purchasers who had
purchased exceedingly expensive lots at WSMR, purchased Walnut Ridge Estate 12 in
WSMR, a 5.0 acre lot for the purchase price of $189,995.00. Financing was initially to be
provided by United Bank, with the appraisal being performed by Defendant McQuade, though
at the last minute the Rices decided to purchase using a home equity line of credit.
Nevertheless, the appraisal was conducted. As with the other appraisals, it was almost
completely identical to all of McQuadeʼs other WSMR appraisals. The following comps were
used: the “bogus Schonberger transaction”, the Calderon sale, and the Welsh/Kim sale. The
Rices, who serve the United States overseas through their employment with the U.S. State
Department, placed faith in the representations of WSMR, United Bank and the Defendants
that they were buying into a legitimate development, and that non-fraudulent comparables
would underlie their financing, as well as the prior financed sales in WSMR.
112. When the Rices purchased, they relied on the representations of United Bank
that there was a legitimate basis underlying the mortgage they were applying for, including
as comps to justify their inflated sales price - which they ended up paying cash for.

Page 43
113. In 2008, the Rices sold their 5.0 acre lot back to WSMR for a loss at
$140,000.00, and purchased a different lot, and this time United Bank did provide the
financing. The second lot was 5.459 acres, called Whispering Hollow Overlook Estate 9, for
the amount of $230,000.00. Even this appraisal, though performed in 2008 by a different
appraiser, relied exclusively on prior WSMR sales and comparables. The Rices dealt
exclusively with Defendant Joyce Durham, who said nothing about the litany of prior appraisal
and mortgage fraud to the Rices. The Rices had no idea that fraud had taken place. They first
learned of the fraudulent appraisals and other misconduct during the course of this litigation.
As with the other victims, their appraisals contained information which was camouflaged and
nearly devoid of identifying information. Only the bank, the appraisers, and WSMR could have
known of the fraud and misconduct which occurred.
114. On or about September 2, 2005, Plaintiffs Jean and Michelle Millard, who were
shown and described lists of prior purchasers who had purchased exceedingly expensive lots
at WSMR, purchased two lots in WSMR: a 7.0 acre lot called Cherry Slopes Mountain Estate 6
for a purported purchase price of $279,995.00, and a 10.48 acre lot called Sunrise Ridge
Estate 5 for the purported purchase price of $249,995.00. As with others, financing was
provided by United Bank, who in turn requested Defendant McQuade to perform the
appraisals. The appraisals for both lots were nearly identical and both used the following sales
as comps: the “bogus Schonberger transaction”, the Evans sale, and the Welsh/Kim sale. The
Millards dealt directly with Defendant Joyce Durham.
115. When the Millards purchased, they relied on the representations of United Bank

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116. The Millards had no idea that fraud had taken place. They first learned of the
117. On or about September 6, 2006, J F Investments Holdings, LLC, through
Fernando Garcia, purchased several lots in WSMR, one of which was “Pepper Mountain
Enclave”. Garcia, who was shown and described lists of prior purchasers who had purchased
exceedingly expensive lots at WSMR, had spoken with salesman Neil Welsh, who convinced
him that buying lots in WSMR was a great investment. United Bank provided the financing.
McQuade performed the appraisal. The following comps were used: the “bogus Schonberger
transaction”, the Calderon sale, and the Welsh/Kim sale. Shortly after purchasing the property
as an investment, they listed the property for sale. They were never able to sell the property.
They first learned of the fraudulent appraisals and other misconduct during the course of this
litigation. As with the other victims, their appraisals contained information which was
camouflaged and nearly devoid of identifying information. Only the bank, the appraisers, and
WSMR could have known of the fraud and misconduct which occurred.
118. Plaintiffs Lori and Michael Robey, who were shown and described lists of prior
purchasers who had purchased exceedingly expensive lots at WSMR, purchased the Rolling
Hills Estate 6 lot in WSMR on or about January 31, 2006, which was a 10.4 acre lot for the
amount of $259,000.00. Financing was provided by United Bank with an appraisal being

Page 45
performed by Defendant McQuade. The appraisal was also fraudulent. It contained the
following comps: the Welsh/Kim sale, the JF Investments Holdings, LLC sale (based on the
“bogus Schonberger transaction”, the Calderon sale, and the Welsh/Kim sale), and the
Calderon sale. The Robeys since fell on hard times when Lorri was diagnosed with cancer
and lost the majority of her income. Facing the potential loss of their Maryland home, the
Robeys appealed to Defendant Joyce Durham to help them with their massive mortgage for
the by-now nearly worthless property. Durham assured the Robeys that she and United Bank
would help. However, each time they spoke, Durham kept putting them off to the next
payment was due. Durham never did help them, nor contact them again. Instead they
received a collections letter from United Bank.
119. When the Robeys purchased, they relied on the representations of United Bank
120. The Robeys had no idea that fraud had taken place. They first learned of the
121. On or about January 30, 2006, Plaintiff Freda Livesay, who was shown and
described lists of prior purchasers who had purchased exceedingly expensive lots at WSMR,
purchased Creekside Mountain Lot 1 in WSMR, consisting of 7.24 acres for the purchase price

Page 46
of $99,995.00, $9,995.00 of which was a “confidential rebate”. Financing was provided by
United Bank. McQuade did the appraisal. The comps used were: the Chamberland/Shoupe
sale, the Baez sale and one unverified sale. Though she now lives in North Port, Florida,
Freda Livesay was originally from West Virginia, and wanted to be able to retire at WSMR.
However, now Plaintiff Livesay is struggling to pay the $2,500.00 in taxes which she is required
to pay yearly, not to mention the mortgage, and is utterly devastated that WSMR itself is nearly
devoid of the promised amenities and paved roads. As with others, she is unable to market
her property to third parties. She first learned of the fraudulent appraisals and other
misconduct during the course of this litigation. As with the other victims, their appraisals
contained information which was camouflaged and nearly devoid of identifying information.
Only the bank, the appraisers, and WSMR could have known of the fraud and misconduct
which occurred.
122. When Plaintiff Livesay purchased, she relied on the representations of United
Bank that there was a legitimate basis underlying the mortgage she was financing, including
appraisals which were not obvious frauds. Neither should she have been expected to know
as comps to justify her inflated financing.
123. Plaintiff Livesay had no idea that fraud had taken place. She first learned of the

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124. On or about April 5, 2006, Plaintiffs Robert and Helene Schlossberg, who were
shown and described lists of prior purchasers who had purchased exceedingly expensive lots
at WSMR, purchased Walnut Ridge Forest Estate 7, consisting of 4.80 acres for the purported
purchase price of $299,995.00, approximately $30,000.00 of which consisted of a “confidential
rebate”. Robert Schlossberg, a Washington D.C. attorney, relied on United Bankʼs reputation
as a large and trustworthy bank in his decision to purchase at WSMR, and their involvement
and intimate knowledge of and association with WSMR. Given his experience as an attorney,
he did not believe that a large and reputable bank would loan hundreds of thousands of dollars
to finance the purchase if there were no valid appraisals to support the financing. United
financed his purchase. They dealt directly with Defendant Joyce Durham, who also was in
close contact with Neil Welsh from WSMR. McQuade performed the appraisal. McQuade
used the following comps: the Cliburn sale (which used the “bogus Schonberger transaction”,
the [Neil] Welsh/Kim sale, and the Calderon sale), the Millard sale (which used the “bogus
Schonberger transaction”, the Evans sale, and the Welsh/Kim sale), and the J F Investments
Holdings, LLC sale (which used the “bogus Schonberger transaction, the Calderon sale, and
the Welsh/Kim sale). The Schlossbergs have since paid off their mortgage, but have lost
hundreds of thousands of dollars in in the now nearly-worthless lot.
125. When the Schlossbergs purchased, they relied on the representations of United
Bank that there was a legitimate basis underlying the mortgage they were financing, including

Page 48
126. The Schlossbergs had no idea that fraud had taken place. They first learned of
127. On or about May 25, 2006, Plaintiff Peter Del Cioppo purchased 9.082 acres in
WSMR for the amount of $249,000.00, using his retirement money. He was convinced that the
property was not only beautiful, but that it would be a great investment. He was shown a list
and description of all of WSMRʼs sales to prior purchasers, and the respective amounts and
per acreage values of each sale, some of which were $50,000.00 to $150,000.00 per acre. He
was told of the amenities and infrastructure which were being provided to WSMR. He then
built a home on the property, all-in-all investing about $800,000.00 into his property at WSMR.
He moved from New York to his WSMR, and is now, upon information and belief, the only full-
time year-round resident on WSMR. Despite having a beautiful home on the property, his
property has been appraised at less than half of what he has invested into it, and even then, it
is extremely unlikely that he would be able to sell the property to a third party for that amount.
His story has been a nightmare. His home is located at the end of a long and steep gravel
road, which he was told would be paved and maintained. It is impassable during much of the
winter and Mr. Del Cioppo is left to fend for himself. He feels as if he is driving through an
abandoned development when driving to his property. There has been no maintenance, either
of the roads, or of the common areas. His property does not connect with other parts of
WSMR, as he was promised it would. There is no cellular phone service. He never received
the promised amenity of telephone service. The telephone company has quoted him a price of

Page 49
$26,000.00 to provide him with telephone service at his home, despite the fact that he and
other lot purchasers were promised all underground utilities to their lot. In order to
communicate with the outside world he has to drive the approximate twenty minutes down the
mountain into Union, to use his cellular phone or a pay phone. Now he has his life savings into
a property which has proven a disastrous investment - one which he would have quickly
avoided but for the misrepresentations and fraud of the Defendants and WSMR.
128. When Plaintiff Del Cioppo purchased, he relied on the involvement of United
Bank and their financing of the development and prior purchasers, about whom information
was communicated to him in order to establish the value of the property he was purchasing.
He had no idea that fraudulent appraisals were used to enable the prior sales information
communicated to him. Neither should he have been expected to know that officers of United
Bank itself had taken a part in manufacturing fraudulent sales to be used as comps to justify
his inflated sales price.
129. Plaintiff Del Cioppo had no idea that fraud had taken place. He first learned of
other victims, his purchase and investment was based on sales based on representations and
prior financing by United Bank which created a fraudulent sales information, which he in turn
relied on when deciding to make the purchase and investment. Only the bank, the appraisers,
and WSMR could have known of the fraud and misconduct which occurred.
130. On or about June 29, 2006, Plaintiffs Robert and Beverly Amico purchased the
Whispering Hollow Overlook Estate 7 in WSMR, for the purchase price of $104,995.00 for
3.021 acres. United Bank provided financing, and Defendant McQuade performed the
appraisal. McQuadeʼs appraisal for the Amicos used the following comps: the Horizon Woods

Page 50
Estate 5 Zambri sale of purportedly $249,995.00 for 6.50 acres (which in turn used the “bogus
Schonberger transaction”, the Evans sale, and the Welsh/Kim sale), the Rice sale of
purportedly $189,995.00 for 5.15 acres (which in turn used the “bogus Schonberger
transaction”, the Calderon sale, and the Welsh/Kim sale), and the Millard sale of purportedly
$279,995.00 for 7.00 acres (which in turn used the “bogus Schonberger transaction”, the
Evans sale, and the Welsh/Kim sale). Needless to say, not one of the comps used, nor any of
the comps underlying those, nor the oneʼs underlying those, were legitimate armʼs length
transactions. As with the other purchasers, the Amicos relied on the assumption and faith that
United Bank would not be complicit in the use of fraudulent sales and comps as the foundation
for their financing.
131. When the Amicos purchased, they relied on the representations of United Bank
132. The Amicos had no idea that fraud had taken place. They first learned of the
133. Eventually the Evansʼ, the Baez, and Obie Woods were foreclosed upon. When
the three year balloon payments came due, they were unable to sell their lots for what they
had invested in them. Other banks would not touch the properties. They were forced to

Page 51
refinance with United Bank at a higher interest rate at which they could not afford. As with
others, they were no buyers at the foreclosure auction other than United Bank itself, who has
purchased every foreclosure in WSMR.
134. The Cliburns still own their property and built a house on their lot. They also own
an additional lot they purchased with cash. However, they have much more invested in the
property than it is worth and have lost several hundred thousand dollars in their decision to
purchase in WSMR and finance with United Bank.15
135. The other plaintiffs, Carroll, Jerge, the Mackeys, the Hollandsworths, Calderon,
the Fountains, Livesay, the Millards, the Rices, the Robeys, the Schlossbergs, Kim, the Amicos
and the Zambris, all remain owners of their WSMR properties. They have been unable to sell
the properties to third parties. They have been unable to refinance the properties with other
banks. The only option available to them has been to use other assets to pay off the
mortgages, or refinance with United Bank at what is usually an increased interest rate. All of
those who have refinanced with United have dealt directly with Defendant Joyce Durham, who
continues to be employed with United Bank as a Vice President and loan officer. They are now
responsible for paying exorbitant taxes, which increased due to WSMR and the Defendantsʼ
submission of fraudulent sale values, usually $3,000.00 to $4,000.00 per year, for unimproved
lots with no utilities, no driveways, no paved roads to their lots, none of the promised amenities
such as equestrian center, main lodge, etc., and last but not least - no ascertainable value to
third parties.
15 The Cliburns also purchased an additional lot after their initial purchase through United Bank. The second lot
was purchased with cash funds from the Cliburns Investment Retirement Account. Although United Bank did not
finance the second lot, their participation in the fraud which took place directly and fraudulently induced the
Cliburns into using their available resources to purchase the second lot, which has now compromised their
retirement assets.

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COUNT ONE - FRAUD IN THE INDUCEMENT
AND AIDING AND ABETTING FRAUD IN THE INDUCEMENT
136. Paragraphs 1 through 135 are hereby incorporated by reference as though fully
restated herein.
137. Defendants, on the dates and in the manner described above, falsely, knowingly,
and fraudulently were complicit in, through joint venture and civil conspiracy, and actively
enabled and allowed WSMR to misrepresent, and themselves misrepresented, value,
investment potential, retirement potential and the overall characteristics and amenities of the
lots in WSMR, including the specific property which the Plaintiffs were induced to purchase
and to otherwise commit bank and mortgage fraud in violation of state and federal law.
138. These were material misrepresentations and were committed by Defendant Ray
Leon Cooper, Defendant Joyce Durham, other employees and officers of Defendant United
Bank, as well as Defendant Stan McQuade and Defendant Thelma McQuade.
Misrepresentations were made by Defendants United Bank, Cooper and Durham that:
a. the properties they were purchasing and financing were being appraised by an
independent appraiser, and that the resulting appraisals were conducted pursuant to banking
guidelines and regulations, as well as professional appraisal regulations and supportive of the
amounts financed, when in fact they were not and they were aware of that fact;
b. that lots were represented as being sold, for purposes of inflation of financing, at
prices far in excess of the true sale prices, and in some cases that transactions occurred which
never occurred, or which were not armʼs length transactions or in which there were secret
sales or financing concessions;
c. Misrepresentations were made by said defendants on loan documents and
deeds that sales of lots were occurring for specific amounts which were grossly false. These

Page 53
documents were provided to or communicated to the Plaintiffs. Said defendants were well
aware of their falsity;
d. Said defendants further communicated to the Plaintiffs and other purchasers that
the “confidential rebates” they were receiving from WSMR was a legitimate rebate or sales
concession from WSMR, when in reality it was coming from the Plaintiffsʼ and other
purchasersʼ loans, thereby inflating the amount financed by the purchasers and in the process
committing bank and mortgage fraud;
e. Defendant United Bank and Defendants Cooper and Durham purposefully failed
to acknowledge the so-called “confidential rebate” on the loansʼ settlement statement, and then
subsequently listed and misrepresented there being a “sellerʼs rebate” all-the-while concealing
the true source of said rebate as being a product of the purchaserʼs loan;
f. Defendants represented to the Plaintiffs that they were familiar with WSMR, and
that they had an existing financial and business relationship with WSMR, and that it was a
legitimate, non-fraudulent investment and real estate opportunity, and that the properties in
WSMR were of a value in excess of the amounts financed by the Plaintiffs;
g. Defendants represented to the Plaintiffs that all state and federal laws were being
complied with in the financing process with regard to the Plaintiffsʼ respective loans
139. Defendants furthermore, pursuant to their relationship or partnership/ joint
venture/ civil conspiracy with WSMR, provided or enabled financing to the Plaintiffs for
property at WSMR at a value which they knew was fraudulent and misrepresented, at the
same time being aware that any value above bare market land prices on which said financing
was based was contingent upon the fulfillment of promises and representations made by
WSMR, while also at the same time having actual or constructive knowledge that said

Page 54
promises and representations would not be fulfilled and were not being fulfilled. Said
defendants also had knowledge that the alleged and represented value of said properties were
based on a fraudulent scheme of appraisals and sales which were themselves fraudulent and
not representative of the real property values of said properties. Said Defendants were well
aware, as is alleged above, that WSMR was providing them with inaccurate, false and
fraudulent financial data, upon which the Plaintiffsʼ loans were made. Defendants United
Bank, Cooper and Durham made representations to purchasers, through information provided
to the appraisers, and to the purchasers themselves contained in the loan documents, deed
and deed of trust, that certain lots had sold for certain prices in WSMR, when in reality this
information was false. Said defendants knew this information was false.
140. Defendants had knowledge that all of the misrepresentations made by WSMR,
as well as their own representations, as detailed above, were false and material - before,
during as well as after the said representations were made.
141. The Plaintiffs placed their trust and confidence in Defendant United Bank due to
its professed familiarity and existing and ongoing relationship with WSMR, as well as through it
touting itself as West Virginiaʼs largest bank.
142. At no time did Defendant United Bank disclose to the Plaintiffs, or to law
enforcement authorities, the fraud perpetrated by WSMR and themselves, or that the value of
the lots in WSMR was far below than what was represented by the Defendants and WSMR.
Said defendants misrepresented and concealed facts from the Plaintiffs which would have
indicated to them that a fraud was being committed upon them. Through said defendantsʼ
concealment, Plaintiffs failed to discover the fraud until it was too late.

Page 55
143. Defendants United Bank, Cooper and Durham profited from the
misrepresentations made to the Plaintiffs.
144. The Plaintiffs reasonably relied on said representations so as to induce them to
purchase lots in the WSMR development with financing pre-arranged and provided through
Defendant United Bank, based on, and for the amount of the fraudulently-inflated values.
145. The Plaintiffs were under the reasonable belief that United Bank and its
employees and officers, including Cooper and Durham were acting as their agents and
fiduciaries at the times the loans were applied-for and agreed upon.
146. Defendant United Bank was under a statutory and common law duty, due to the
existing agency relationship, the fiduciary relationship, as well as the contractual relationship
with the Plaintiffs to act in the utmost good faith towards the Plaintiffs and to disclose all facts
within their knowledge which were material to, or which may have influenced, the Plaintiffsʼ
involvement in the purchasing of financed lots in WSMR.
147. In the event that it is determined that Defendants did not themselves commit
fraud, they are liable for common law aiding and abetting WSMRʼs fraudulent acts.
Specifically, the Defendants themselves performed tortious acts in concert with WSMR, namely
fraud, as detailed above in complex detail. The Defendants knew that WSMRʼs conduct
constituted a breach of duty and fraud, and nevertheless gave substantial assistance or
encouragement to WSMR to perform such conduct. In fact, the fraudulent acts and conduct of
WSMR could not have been performed without the Defendantsʼ substantial assistance. The
fraud involved the obtaining of artificially-inflated financing, which was only possible through a
financial institution such as United Bank. Secondly, the financing required appraisals - which
could not have been obtained without the substantial cooperation of the McQuade Defendants.

Page 56
148. The Plaintiffs suffered damages as a direct and proximate result of the
Defendantsʼ misrepresentations and fraud.
149. The Plaintiffsʼ damages are within the jurisdictional requirements of this Court.
COUNT TWO - NEGLIGENCE
restated herein.
151. Pursuant to the joint venture and agency and fiduciary relationship between
Defendant United Bank and WSMR, as detailed above, and through their making loans to the
Plaintiffs and other buyers of lots in WSMR and through their contractual relationship with the
Plaintiffs, Defendant United Bank and its officers and employees, including Defendants Cooper
and Durham, owed a common law duty of reasonable care to the Plaintiffs, and to other buyers
of lots in WSMR. Said defendants knew, or reasonably should have known that their negligent
acts and/or omissions committed in regard to their participation in the WSMR development and
financing would have caused harm to the Plaintiffs, as well as other lot purchasers in WSMR.
Defendant United Bank and its employees and officers, including Cooper and Durham, also
owed a statutory duty of reasonable care and to not violate the law, to the Plaintiffs, as
customers of United Bank, pursuant to state and federal law.
152. Defendant United Bank and Defendants Cooper and Durham breached that duty
by making loans to the Plaintiffs for fraudulently-inflated sale prices, to wit: being based on
appraisals using comparable sales that were fraudulent or misrepresented or that were the
product of fraudulent sale records provided by WSMR, when said defendants knew, or should
have known had their exercised reasonable care, that said fraud existed, and that the amount
financed was not justified.

Page 57
153. Defendants Stan and Thelma McQuade, since they were responsible for
investigating and providing an appraisal amount to Defendant United Bank, which in turn
allowed or disallowed the Plaintiffsʼ United Bank loan depending on their professional appraisal
opinion, and since it was reasonably foreseeable to the McQuades that the Plaintiffs would be
harmed if they recklessly or negligently performed and reported appraisals which were riddled
with fraud and falsity and which did not comply with professional appraisal regulations, they
owed the Plaintiffs a common law duty of reasonable care not to do so.
154. Defendants Stan and Thelma McQuade breached that duty by completing
appraisals in WSMR for United Bank, both for the Plaintiffsʼ loans and for other buyersʼ loans,
which were fraudulent, to wit: they were based on comparable sales and the comparable sales
used were exclusively fraudulent, by either being fraudulently inflated to a false sale price, or
by using non-existent completely fraudulent and misrepresented transactions, which directly
enabled loans to be made to the Plaintiffs, and others, for amounts well in excess of the true
value of the said properties.
155. Defendant United Bank was furthermore negligent in hiring and continuing to
employ Leon Cooper, as well as Joyce Durham, as they knew, or should have known that they
had violated state and federal law and committed bank fraud and mortgage fraud, among other
violations. United Bank was further negligent in failing to supervise Cooper and Durham, and
in allowing Cooper and Durham to choose Stan and Thelma McQuade exclusively as their
appraisers, as well as in allowing them to unilaterally approve loans which were otherwise
outside of United Bankʼs guidelines, or which had severe “red flags”. United Bank was further
negligent in their failing to properly supervise Cooper and Durham. United Bank and
Defendants Cooper and Durham were negligent in agreeing to and continuing to finance

Page 58
WSMR and purchasers in WSMR when they were put on notice from the very beginning that
Dan Berg was a complete fraud and scam artist, and that both Berg and Halperin were
severely undercapitalized to achieve what they professed they could achieve without
committing fraud.
156. As a direct and proximate result of the Defendantsʼ negligence, Plaintiffs suffered
harm for which they are entitled to recover.
COUNT THREE - CIVIL CONSPIRACY
restated here.
158. At all relevant times, the defendants herein, along with WSMR, and other
associates and agents of both entities, as described above in complex detail, engaged in a civil
conspiracy to turn a quick profit off of the sale of WSMR lots by creating the illusion that the
property values of the WSMR lots were greater than they actually were, to the detriment of
innocent purchasers, who were induced into purchasing said lots by taking out mortgages with
Defendant United Bank which were far in excess of the actual property values of said lots.
Specifically, Defendants Cooper and Durham made a commission off of each loan made, paid
by Defendant United Bank. Defendants Stan and Thelma McQuade were paid a flat sum for
each appraisal, and performed dozens of appraisals before United Bank discontinued allowing
loan officers to choose their own appraisers. Defendant United Bank made millions of dollars
from the innocent purchasers, who were effectively making loans and then paying themselves
off, with the exception of the portions of the loans which went exclusively to the developers. Of
course, the other member of this conspiracy, WSMR, made millions of dollars in cash.
Defendant United Bank was essentially a joint venture investment partner with WSMR -

Page 59
sharing in both increases and decreases in value (both profit and loss). Ultimately, upon
information and belief, United Bank is now the de facto owner of the WSMR development
itself. Jonathan Halperin has filed for Chapter 7 bankruptcy. Most of the “matrix” of WSMR
LLCʼs are being dissolved. United Bank holds the first position note on all of the existing
unsold properties in WSMR. Both WSMR and Halperin has, upon information and belief,
defaulted on those notes. Additionally, United Bank has bought every foreclosure at public
auction, and owns a large number of lots already in WSMR. United Bank is actively marketing
its lots for sale.
159. An agreement and understanding existed between the defendants, including
Defendants United Bank, Cooper and Durham, and WSMR to commit violations of state and
federal law pertaining to bank fraud and mortgage fraud, as detailed above in complex detail.
160. Defendants knew that the purpose of the agreement was criminal and fraudulent.
161. Defendants participated in the conspiracy as detailed above in complex detail.
162. Defendants had knowledge of the conspiracyʼs illegal purpose, as detailed above
in complex detail.
163. Defendants intended to aid in the accomplishment of the conspiracyʼs illegal
ends.
164. All defendants/conspirators carried out overt acts in furtherance of the
conspiracy, as detailed above in complex detail. Said overt acts were committed by the
Defendants after the illegal understanding had been reached and tended toward
accomplishment of the intended illegal acts of the conspiracy. All defendants knew and
intended that their acts do so.

Page 60
165. As a direct and proximate result of the acts of conspiracy described above by the
defendants herein and by other third parties, and as set forth in detail above in this Complaint,
the Plaintiffs suffered harm, including extreme emotional distress and economic damages, for
which they are entitled to recover.
COUNT FOUR - PUNITIVE DAMAGES
restated herein.
168. In the event that it is determined that Defendants acted with gross negligence,
recklessness or engaged in any intentional misconduct that would justify an award of punitive
or exemplary damages, the Plaintiff hereby makes and asserts a claim against said
Defendants for punitive or exemplary damages.
COUNT FIVE - INTENTIONAL OR NEGLIGENT INFLICTION

OF EMOTIONAL DISTRESS/ TORT OF OUTRAGE
restated herein.
170. Pursuant to the joint venture and fiduciary relationship between Defendant United
Bank and WSMR, as detailed above, and through their making loans to the Plaintiffs and other
buyers of lots in WSMR, Defendant United Bank and its officers and employees, including
Defendants Cooper and Durham, owed a common law duty of reasonable care to the Plaintiffs,
and to other buyers of lots in WSMR. It was, or should have been, reasonably foreseeable to
the Defendants that the Plaintiffs would suffer harm as a result of the Defendantsʼ conduct, and
said defendants owed the Plaintiffs a duty not to do so.

Page 61
171. Defendants Stan and Thelma McQuade, since they were responsible for
investigating and providing an appraisal amount to Defendant United Bank, which in turn
allowed or disallowed the Plaintiffsʼ United Bank loan depending on their professional appraisal
opinion, and since it was reasonably foreseeable to the McQuades that the defendants herein,
who paid a fee for their services at closing, would be harmed as a result of their conduct and
involvement in the civil conspiracy, they owed the Plaintiffs a common law duty of reasonable
care.
172. All defendants herein furthermore owed the Plaintiffs a common law duty of
reasonable care not to intentionally engage in actions which they know or should know would
cause the Plaintiffs, or anyone else, extreme emotional distress.
173. The intentional conduct by Defendants, consisting of their participation in the
WSMR fraud, as set forth above in great detail, was so outrageous in character, and so
extreme in degree, as to exceed all bounds of decency, and to be regarded as atrocious, and
utterly intolerable in a civilized community.
174. In the alternative, Defendantʼs conduct, as described above in great detail,
constituted a breach of their common law duty, as discussed above, which directly and
proximately caused the Plaintiffs to suffer extreme emotional distress.
175. Defendant knew, or should have known, that the Plaintiffs would suffer extreme
emotional distress as a direct and proximate result of their actions.
176. As a direct and proximate result of Defendantʼs conduct, the Plaintiffs suffered
COUNT SIX - RESPONDEAT SUPERIOR

Page 62
restated herein.
178. Defendant United Bank has the authority to formulate, implement and administer
the policies, customs and practices of their officers, employees, subordinates, and agents,
which represents the official policies, customs, and practices of Defendant United Bank and
subjects them to vicarious liability based upon the employment relationship.
179. Several causes of action are alleged herein naming United Bank officers and
employees as defendants and against whom recovery is sought, to wit: Ray Leon Cooper, Vice
President, and Joyce Durham, Vice President.
180. Said employees and officers who engaged in the conduct and allegations
described herein and in connection with WSMR were at all times relevant hereto acting within
the scope of their employment for Defendant United Bank.
181. As a direct and proximate result of said employeesʼ actions, the Plaintiffs suffered
COUNT EIGHT - BREACH OF IMPLIED COVENANT OF

GOOD FAITH AND FAIR DEALING
restated herein.
183. Defendant United Bank, due to its contractual and fiduciary relationship with the
Plaintiffs, owed the Plaintiffs an implied covenant of good faith and fair dealing. Specifically,
this duty arose when Defendant United Bank accepted the Plaintiffs as customers/clients and
entered into agreements to loan them money secured by the subject lots in WSMR.
184. As a result of the conduct described above in detail, Defendant breached the
implied covenant of good faith and fair dealing.

Page 63
185. As the result of the Defendantʼs breach of their implied covenant of good faith
and fair dealing, the Plaintiffs were harmed.
186. The Defendant is liable to the Plaintiffs for breach of their implied covenant of
good faith and fair dealing.
COUNT NINE - BREACH OF FIDUCIARY DUTY
restated herein.
188. Defendant United Bank entered into a fiduciary relationship with the Plaintiffs.
Specifically, this “special relationship” was instituted between United Bank and the Plaintiffs
when Defendant United Bank accepted the Plaintiffs as customers/clients and entered into
agreements to loan them money secured by the subject lots in WSMR. This special
relationship also exists with regard to the agency relationship which existed between United
Bank and the Plaintiffs, to wit: that they were informed by United Bank that they were familiar
with the WSMR development and that they were a trustworthy bank, representing themselves
as the stateʼs largest bank and that the WSMR development was a legitimate non-fraudulent
investment; the Plaintiffs placed their trust and confidence in United Bank that they would act
in their best interests and disclose any material facts within their knowledge which might
influence the Plaintiffs decision to purchase financed lots in WSMR, and that they would not be
involved or complicit with WSMR in fraudulent activity in relation to the investments they were
about to make. There existed a great disparity of position and bargaining power between
Defendant and the Plaintiffs. Only the Defendant was aware of the fraudulent conduct and
nature of WSMR, the appraisers and officers of United Bank. Plaintiffs were not in a position
to obtain or possess this information. Plaintiffs were customers and clients of United Bank,

Page 64
and thereby created a special relationship, not only as clients and customers, but as joint
venture investment partners - both investing in WSMR and sharing or suffering both increases
and decreases in value pursuant to their respective interests.
189. Defendant owed a fiduciary duty to the Plaintiffs.
190. As a result of the conduct described above in detail, which consisted of fraud and
breach of trust, the Defendant breached their fiduciary duty to the Plaintiffs.
191. As a result of the Defendantʼs breach of their fiduciary duty, the Plaintiffs were
harmed.
192. The Defendant is liable to the Plaintiffs for breach of their fiduciary duty.
COUNT TEN - CONSTRUCTIVE FRAUD
restated herein.
194. Defendants owed a legal and equitable duty to the Plaintiffs to not engage in or
assist in engaging in actions which had a tendency to deceive the Plaintiffs.
195. Defendants breached said duty by, among other actions which are discussed
above in complex detail, engaging in the following actions:
a. allowing, enabling and assisting WSMR to give “confidential rebates” to
purchasers, thereby falsifying deeds, deeds of trust, loan documents, financial records,
appraisals, and other documents, in violation of state and federal law;
b. purposefully hiding said “confidential rebates” and failing to list them on
purchasersʼ settlement statements in violation of state and federal law;

Page 65
c. approving and closing loans which were based on obviously fraudulent
appraisals, when the only parties to whom the fraud would have been obvious were the
defendants;
d. submitting, and enabling and allowing the submission, of false financial records
and falsified sale records to the Plaintiffs, other purchasers, to appraisers, attorneys and
government agencies in violation of state and federal law;
e. allowing, enabling, and assisting WSMR to give “rebates” to purchasers from the
purchasersʼ own loan, thereby placing innocent purchasers and clients of United Bank
immediately “upside down” in their loans;
f. financing loans to purchasers, including the Plaintiffs, with knowledge of the
misrepresentations regarding amenities and the quality and characteristics of the WSMR
property being perpetrated by WSMR;
196. Only the Defendants had knowledge, or had access to knowledge of the fraud
which was perpetrated against the Plaintiffs. Plaintiffs were not privy to the wealth of
information available and held by the Defendants which could have and would have exposed
the fraud which took place.
197. As a direct and proximate result thereof, the Plaintiffs suffered harm.
COUNT ELEVEN - DETRIMENTAL RELIANCE
restated herein.
199. Defendants, each individually, as well as pursuant to their joint venture/
conspiracy with WSMR, made representations and express promises to the Plaintiffs that the
lots they were financing were of a certain minimum value, and that all parties involved were

Page 66
complying with state and federal law and not committing mortgage fraud, bank fraud, or
otherwise providing fraudulent sales and financial records in any way. Defendants further
made representations that the signed and approved loan and real estate documents complied
with state and federal law and were not fraudulent, misrepresented, or falsified.
200. Given the relationship between United Bank and WSMR, which was
communicated and promoted to the Plaintiffs, and given United Bankʼs status as West
Virginiaʼs largest bank headquartered in West Virginia16 , which it readily communicated to the
Plaintiffs and others, Defendants should have reasonably expected that the representations
made to the Plaintiffs would be relied upon and given great weight by the Plaintiffs.
201. Given the curriculum vitae provided by Stan McQuade and Thelma McQuade,
which was made a part of the appraisals for the Plaintiffsʼ appraisals, and given the express
assurances contained therein that all state and federal laws, as well as professional appraisal
regulations and rules were complied with, the McQuade Defendants should have reasonably
expected that the representations made to the Plaintiffs would be relied upon and given great
weight by the Plaintiffs.
202. The Plaintiffs were induced to purchase property in WSMR and finance the same
with the Defendant for an amount far in excess of the actual value of the property, to their
detriment, and as a direct and proximate result thereof have suffered damages.
PRAYER
WHEREFORE, for all the reasons stated herein, the Plaintiffs respectfully pray for the
following relief:
16 See http://www.unitedbank-wv.com/careerOpps/job_overview.asp

Page 67
1. Compensatory damages related to the purchase, payments and existing debt
and interest on the property the Plaintiffsʼ purchased in WSMR, and for such other relief as this
Court deems just in a fair and just, in the amount to be determined by a jury at trial;
2. General damages for past, present and future mental anguish, loss of enjoyment
of life, emotional distress and loss of good credit history and rating, as well as loss of
investment opportunity, and other general compensatory damages, in a fair and just amount to
be determined by a jury at trial;
3. Punitive damages, if it is determined that the Defendant was grossly negligent,
reckless and/or engaged in intentional misconduct, in the amount to be determined by a jury at
trial.
4. Pre-judgment and post-judgment interest;
5. Costs and attorney fees expended in this civil action;
6. And for such other relief as this Court deems just and proper.
PLAINTIFF DEMANDS A TRIAL BY JURY ON ALL ISSUES.

WAYNE CLIBURN and LUCY
CLIBURN, and SERGIO BAEZ,
and PETER CALDERON and
MIKE HOLLANDSWORTH, VIVIAN
JERGE and JAMES CARROLL,
JR. and FREDA LIVESAY and JIM
and PETER DEL CIOPPO and
JEAN MILLARD, MICHELLE
MILLARD and STEPHEN RICE,

Page 68
LAUREEN RICE and LON
FOUNTAIN, LOUISE FOUNTAIN
and MICHAEL ROBEY, LORRI
ROBEY, ROBERT
SCHLOSSBERG, HELENE
ZAMBRI, MARY ZAMBRI,
JOSEPH ZAMBRI, ANTHONY
ZAMBRI, and ZAMBRI
ENTERPRISES, LLC, a Maryland
limited liability company, and
ROBERT AMICO, BEVERLY
By Counsel

John H. Bryan (WV Bar No. 10259)
Martha J. Fleshman (WV Bar No. 8542)
611 Main Street
P.O. Box 366
Union, WV 24983
(304) 772-4999
Fax: (304) 772-4999
jhb@johnbryanlaw.com

Page 69
IN THE CIRCUIT COURT OF MONROE COUNTY, WEST VIRGINIA

WAYNE CLIBURN and LUCY
CLIBURN, and SERGIO BAEZ and
PETER CALDERON and MIKE
HOLLANDSWORTH, VIVIAN
JERGE and JAMES CARROLL, JR.
and FREDA LIVESAY and JIM
and PETER DEL CIOPPO and JEAN
MILLARD, MICHELLE MILLARD and
STEPHEN RICE, LAUREEN RICE
and LON FOUNTAIN, LOUISE
FOUNTAIN and MICHAEL ROBEY,
LORRI ROBEY, ROBERT
SCHLOSSBERG, HELENE
ZAMBRI, MARY ZAMBRI, JOSEPH
ZAMBRI, ANTHONY ZAMBRI, and
ZAMBRI ENTERPRISES, LLC, a
Maryland limited liability company,
and ROBERT AMICO, BEVERLY
Plaintiffs,
v. Civil Action No. 09-C-94
UNITED BANK, INC., a

West Virginia corporation,
RAY LEON COOPER, in his official
capacity as Vice President and Loan
Officer of United Bank, Inc., JOYCE
DURHAM, in her official capacity as
Vice President and Loan Officer of
United Bank, Inc., STAN MCQUADE,
individually, THELMA MCQUADE,
individually, and d/b/a MCQUADE
APPRAISAL SERVICES,
Defendants.

Page 70
CERTIFICATE OF SERVICE
I, John H. Bryan, counsel for the Plaintiffs, do hereby certify that the foregoing SECOND
AMENDED COMPLAINT has been served upon the following counsel of record via first class
mail, and by facsimile, to the following address:
C. William Davis, Esq.

Richardson & Davis, PLLC
P.O. Box 1778
Bluefield, WV 24701
Fax: (304) 325-6483
Counsel for Defendant United Bank, Inc.
Copies of the Second Amended Complaint, along with a corresponding Summons is herewith
being personally served on Ray Leon Cooper, Joyce Durham, Stan McQuade, and Thelma
McQuade.
Dated this the day of September, 2010

JOHN H. BRYAN


Evans, Et Al. v. United Bank, Et Al. Second Amended Complaint

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Evans, Et Al. v. United Bank, Et Al. Second Amended Complaint

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IN THE CIRCUIT COURT OF MONROE COUNTY, WEST VIRGINIA

CHARLES J. EVANS, CYNTHIA B.

v. Civil Action No. 09-C-94

UNITED BANK, INC., a

SECOND AMENDED COMPLAINT

Complaint respectfully represent to the Court as follows:

PARTIES AND JURISDICTION

property in the Walnut Springs Mountain Reserve development.

Mountain Reserve development.

JOHN H. BRYAN, ATTORNEY AT LAW

property in the Walnut Springs Mountain Reserve development.

as purchasers of property in the Walnut Springs Mountain Reserve development.

Springs Mountain Reserve development.

Mountain Reserve development.

Springs Mountain Reserve development.

Springs Mountain Reserve development.

JOHN H. BRYAN, ATTORNEY AT LAW

Mountain Reserve development.

Mountain Reserve development.

JOHN H. BRYAN, ATTORNEY AT LAW

Walnut Springs Mountain Reserve development.

property in the Walnut Springs Mountain Reserve development.

purchasers of property in the Walnut Springs Mountain Reserve development.

JOHN H. BRYAN, ATTORNEY AT LAW

said official capacity and within the scope of her employment.

capacity as as a principal of d/b/a McQuade Appraisal Services.

the Supervising Appraiser and principal of McQuade Appraisal Services.

began residing in a camper trailer.

JOHN H. BRYAN, ATTORNEY AT LAW

remember his real social security number and name.

which to run a real estate investment/development scam.

Springs Mountain Reserve” (hereinafter “WSMR”) WSMR was to be a high-end rural

JOHN H. BRYAN, ATTORNEY AT LAW

second local bank similarly declined the pair.

JOHN H. BRYAN, ATTORNEY AT LAW

commissions of approximately $15,000.00 per month, paid by United Bank.

capacity as an officer of United Bank, and will imminently be indicted, or charged by

JOHN H. BRYAN, ATTORNEY AT LAW

residence, in the amount of $269,000.00.

of the Clerk of the County Commission of Monroe County, West Virginia.

“corporate opportunity” clause.3

JOHN H. BRYAN, ATTORNEY AT LAW

a “confidential rebate” at closing from the seller.

43. Following Schonbergerʼs conveyance to Shoupe and Chamberland, WSMR

Shoupe and Chamberland to pay the mortgage on the lots.

JOHN H. BRYAN, ATTORNEY AT LAW

referred to as “Walnut Springs Mountain Reserve Phase 1 Lot 1.”

as the “bogus Schonberger transaction”).

maximum amount Cooper could unilaterally approve.

JOHN H. BRYAN, ATTORNEY AT LAW

and to appraiser Stan McQuade.

$656,900.00. No addendum or notes were included on the appraisal. Supervising appraiser

JOHN H. BRYAN, ATTORNEY AT LAW

5 Sometimes the amount is listed as $300,000.00.

JOHN H. BRYAN, ATTORNEY AT LAW

WSMR lot sales.

their financial statements, up to that point read as follows:

$15,000.00 per acre (Chamberland/ Shoupe)

under mortgages (although when used as a comp in appraisals, it is nearly unrecognizable as

$15,000.00 per acre (Chamberland/ Shoupe)

JOHN H. BRYAN, ATTORNEY AT LAW

56. WSMR was simultaneously engaging in a national advertising campaign, both

JOHN H. BRYAN, ATTORNEY AT LAW

JOHN H. BRYAN, ATTORNEY AT LAW