United Bank Lawsuit

IN THE CIRCUIT COURT OF MONROE COUNTY, WEST VIRGINIA
CHARLES J. EVANS,
CYNTHIA B. EVANS and
OBIE WOODS, and
WAYNE CLIBURN and
LUCY CLIBURN,
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.
AMENDED COMPLAINT
Comes now the Plaintiffs, Charles J. Evans, Cynthia B. Evans, Obie Woods, and
Wayne Cliburn and Lucy Cliburn, (hereinafter “Plaintiffs”) by and through counsel, John
H. Bryan, and for their Amended Complaint respectfully represent to the Court as
follows:
PARTIES AND JURISDICTION

Evans, et al. v. United Bank, et al.
Civil Action No. 09-C-93
Page 2
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.
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.
4. 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.
5. 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.
6. 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, 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.
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
7. 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.
8. 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.
9 This Court has jurisdiction over this action pursuant to West Virginia Code
§ 51-2-1, et seq.
10. 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
11. 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.

Page 4
12. 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.
13. Mr. Berg had been traveling the country looking for a parcel of real
property from which to run a real estate investment/development scam.
14. 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.
15. 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.
16. 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,
1Both Hallperin and Berg would later claim to investors, and others, that they were brothers, or
sometimes step-brothers or half-brothers.

Page 5
respectively, and that they each held “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.”
17. 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.
18. 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.
19. 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,
2 The 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 6
and also finance lot sales to third party purchasers. They entered into a private
agreement with Berg and Halperin 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.
20. 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.
21. Upon information and belief, Leon Cooper is under federal investigation,
and will imminently be indicted, or charged by information, for fraud in connection with
his position as Vice President and loan officer at United Bank. 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 these
facts from itsʼ customers and clients, including WSMR purchasers and financees.
22. 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

Page 7
from realtor Girlonza Scott and his wife for the purchase price of $705,711.00.
$300,000.00 of the purchase price 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.
23. 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.
24. 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.
25. 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 that the 67.5 acres was owned by Berg and exempt
from the agreementʼs “corporate opportunity” clause.3
26. The 67.5 acre property never has been owned by Mountain America, LLC.
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 8
27. 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 partner, Robert Chamberland, at some point subsequently
began receiving payment as a consultant to WSMR, and then later became a WSMR
employee and partner.
28. 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.
29. 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

Page 9
acre price was not “armʼs length” since in effect WSMR itself was paying Shoupe and
Chamberland to pay the mortgage on the lots.
30. 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 and third parties. The partners in Walnut Ridge LLC were Berg,
Halperin, Schonberger and Peter Hatsy.
31. 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.”
32. 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”).
33. 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.

Page 10
34. 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.
35. 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.
36. 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.
4 Note that $294,000.00 equals exactly $50,000.00 per acre for 5.88 acres.

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37. 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).
38. 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 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.
39. 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.

Page 12
40. 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 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.
41. 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
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.

Page 13
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 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

Page 14
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 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
7 In 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.”

Page 15
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 itsʼ 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.
42. When potential buyers/investors were lured to the WSMR property, 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 “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.
43. On or about June 6, 2005, Sergio and Cheryl Baez purchased a 9.5 acre
lot in WSMR, financed by United Bank (hereinafter referred to as the “Baez” sale). The
purchase contract, which was submitted to United Bank and the appraiser, and the deed
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 16
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 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 itsʼ consideration clause, of $229,995.00.
WSMR also recorded a sale in itʼs 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.

Page 17
44. Interestingly, 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 acres. The home was built by the developer for himself. The sale
is the first armʼs length transaction in Walnut Springs.” (emphasis added).10
10 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.

Page 18
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.”11 Upon information and belief, the lot has not sold.
45. On or about July 14, 2005, Peter Calderon 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 Calderon 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
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
11Note 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 19
a basis for the WSMR appraisals, though three are required pursuant to law and
professional appraisal standards.
46. 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.
47. 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, upon information and belief, 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. WSMR also 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

Page 20
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, the purchase price really was less
than $152,000.00 12, which nets a per acre value of only $12,666.66.
48. On or about June 24, 2005, Neil Welsh and Joseph 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. Joseph “Teddy” Kim was a childhood acquaintance of Welsh, who
inherited an interest in his fatherʼs business and had some access to credit. 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 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
12 $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 21
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. Kim was
under the impression that they could not go through with the deal. A few days later Kim
received a call from United Bank 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.
49. Upon information and belief, Welsh, Halperin and Berg conspired to
convince Joseph “Teddy” Kim to access his credit, and unwittingly 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 Kim to fend for himself.
50. Leon Cooper 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

Page 22
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. Joyce Durham
approved the appraisal and the loan, and the loan closed. No cash was paid at 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.
51. 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.13 As usual, the
appraisal and financial records did not disclose the financial relationship between Welsh
and WSMR.
52. 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
13At 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 current broker under whoʼs license real estate is sold is Charles McCue.

Page 23
$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.
53. 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. At some point Durham
communicated to WSMR that “we are going to have to start disclosing them on the
settlement statements.” As with Cooper, Durham was also fully aware that no cash was
actually being paid at closing by purchasers, and that purchasers were themselves
receiving cash at closing. Upon information and belief, the cash being utilized as a
“confidential rebate” came out of the United Bank loans. Thus each purchaser 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.

Page 24
54. On or about August 24, 2005, after hearing Dan Bergʼs and salesman Neil
Welshʼs sales pitches, and viewing the property, Wayne and Lucy Cliburne agreed to
purchase 9.77 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 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.
55. 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

Page 25
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.
56. 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.
57. 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).
58. 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

Page 26
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.
59. 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.
60. 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

Page 27
$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).
61. 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 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.
62. On or about September 1, 2005, 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. Salvatore Zambri
was a partner in Jonathan Halperinʼs law firm. As usual, the recorded deed listed a
consideration amount of $300,000.00 for 2 acres. Upon information and belief, there

Page 28
was a “confidential rebate” given to the Zambris, an amount which is currently unknown
to the Plaintiff. And since the prior “confidential rebates” did not follow any particular
formula or percentage, the amount would only be known to WSMR, the Zambris and
United Bank. What is known is that 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. Interestingly, 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. Upon
information and belief, the “confidential rebate” made up for the difference between
these two loans and the purported purchase price. Additionally, the principals of
Greentree, LLC were at this time: Mountain America, LLC (50% Berg and 50% Halperin)
and Robert Chamberland and LInda Shoupe.
63. 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 (based on the bogus

Page 29
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” several times. 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”).
64. 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 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.

Page 30
65. Eventually the Evansʼ 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
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.
66. 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.14
COUNT ONE - FRAUD IN THE INDUCEMENT

AND AIDING AND ABETTING FRAUD IN THE INDUCEMENT
67. Paragraphs 1 through 66 are hereby incorporated by reference as though
fully restated herein.
68. 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.
14 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.

Page 31
69. 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 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;

Page 32
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
70. 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 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

Page 33
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.
71. 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.
72. The Plaintiffs placed their trust and confidence in Defendant United Bank
due to itsʼ professed familiarity and existing and ongoing relationship with WSMR, as
well as through it touting itself as West Virginiaʼs largest bank.
73. 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.
74. Defendants United Bank, Cooper and Durham profited from the
misrepresentations made to the Plaintiffs.

Page 34
75. 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.
76. 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.
77. 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.
78. 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 35
79. The Plaintiffs suffered damages as a direct and proximate result of the
Defendantsʼ misrepresentations and fraud.
80. The Plaintiffsʼ damages are within the jurisdictional requirements of this
Court.
COUNT TWO - NEGLIGENCE
82. 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.
83. 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,

Page 36
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.
84. 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.
85. 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.
86. 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

Page 37
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 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.
87 As a direct and proximate result of the Defendantsʼ negligence, Plaintiffs
suffered harm for which they are entitled to recover.
COUNT THREE - CIVIL CONSPIRACY
fully restated here.
89. 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

Page 38
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 -
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.
90. 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.
91. Defendants knew that the purpose of the agreement was criminal and
fraudulent.
92. Defendants participated in the conspiracy as detailed above in complex
detail.
93. Defendants had knowledge of the conspiracyʼs illegal purpose, as detailed
above in complex detail.

Page 39
94. Defendants intended to aid in the accomplishment of the conspiracyʼs
illegal ends.
95. 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.
96. 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.
Court.
COUNT FOUR - PUNITIVE DAMAGES
99. 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

Page 40
101. 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.
102. 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.
103. 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.
104. 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.

Page 41
105. 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.
106. Defendant knew, or should have known, that the Plaintiffs would suffer
extreme emotional distress as a direct and proximate result of their actions.
107. As a direct and proximate result of Defendantʼs conduct, the Plaintiffs
COUNT SIX - RESPONDEAT SUPERIOR
108. Paragraphs 1 through 107 are hereby incorporated by reference as
though fully restated herein.
109. 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.
110. 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.
111. 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.
112. As a direct and proximate result of said employeesʼ actions, the Plaintiffs

Page 42
COUNT EIGHT - BREACH OF IMPLIED COVENANT OF
GOOD FAITH AND FAIR DEALING
114. Defendant United Bank, due to itʼs 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.
115. As a result of the conduct described above in detail, Defendant breached
the implied covenant of good faith and fair dealing.
116. As the result of the Defendantʼs breach of their implied covenant of good
faith and fair dealing, the Plaintiffs were harmed.
117. 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
119. 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

Page 43
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, 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.
120. Defendant owed a fiduciary duty to the Plaintiffs.
121. 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.
122. As a result of the Defendantʼs breach of their fiduciary duty, the Plaintiffs
were harmed.
123. The Defendant is liable to the Plaintiffs for breach of their fiduciary duty.
COUNT TEN - CONSTRUCTIVE FRAUD

Page 44
125. 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.
126. 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;
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;

Page 45
127. 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.
128. As a direct and proximate result thereof, the Plaintiffs suffered harm.
COUNT ELEVEN - DETRIMENTAL RELIANCE
130. 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 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.
131. 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 Virginia15 , 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.
15 See http://www.unitedbank-wv.com/careerOpps/job_overview.asp

Page 46
132. 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.
133. 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.
Court.
PRAYER
WHEREFORE, for all the reasons stated herein, the Plaintiffs respectfully pray
for the following relief:
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;

Page 47
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.
CHARLES J. EVANS and

CYNTHIA B. EVANS,
WAYNE CLIBURN and
LUCY CLIBURN, and
OBIE S. WOODS,
By Counsel

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


United Bank Lawsuit

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United Bank Lawsuit

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IN THE CIRCUIT COURT OF MONROE COUNTY, WEST VIRGINIA

v. Civil Action No. 09-C-94

UNITED BANK, INC., a

PARTIES AND JURISDICTION

resident of Broadlands, Virginia.

Parkersburg, WV 26101, and a notice of process address of 514 Market Street,

Parkersburg, WV 26101, c/o Harold Manner.

5. Defendant Ray Leon Cooper is named as a defendant herein in his official

6. Defendant Joyce Durham is named as a defendant herein in her official

JOHN H. BRYAN, ATTORNEY AT LAW

resident of Lewisburg, Greenbrier County, West Virginia, and is engaged in doing

both individually and in his capacity as as a principal of d/b/a McQuade Appraisal

resident of Lewisburg, Greenbrier County, West Virginia, and is engaged in doing

Complaint is also located therein.

Virginia, where he began residing in a camper trailer.

JOHN H. BRYAN, ATTORNEY AT LAW

property from which to run a real estate investment/development scam.

very little cash. Thus, he sought out investors.

15. Mr. Berg unsuccessfully courted several potential investors. Finally, he

The two quickly agreed to be partners.

JOHN H. BRYAN, ATTORNEY AT LAW

provided that “[p]ricing shall be suggested by comps and presentations prepared

which case any contracts “must be signed by both members.”

closed-door meetings in Mr. Cooperʼs Fayetteville office.

JOHN H. BRYAN, ATTORNEY AT LAW

to retain a certain percentage of the proceeds as profit.

amount of $300,000.00. Mr. Cooper received a commission by United Bank on each

may imminently be charged by indictment or information with federal criminal fraud

JOHN H. BRYAN, ATTORNEY AT LAW

from the agreementʼs “corporate opportunity” clause.3

JOHN H. BRYAN, ATTORNEY AT LAW

August. Shoupeʼs longtime partner, Robert Chamberland, at some point subsequently

employee and partner.

28. Of the $150,000.00 purchase price, $107,858.00 was financed through

balance consisted of a “confidential rebate” at closing from the seller.

29. Following Schonbergerʼs conveyance to Shoupe and Chamberland,

Ridge, LLC”, to two buyers, named Shoupe/Chamberland, for the amount of

of Schonberger being the grantor of the property, nor of Shoupeʼs or Chamberlandʼs

WSMRʼs spreadsheets, as well as on their website, all of which were presented to

JOHN H. BRYAN, ATTORNEY AT LAW

Chamberland to pay the mortgage on the lots.

and potential judgments from creditors/investors, as well as to enter into partnerships

Halperin, Schonberger and Peter Hatsy.

(hereinafter referred to as the “bogus Schonberger transaction”).

33. Simultaneous with the deed conveyance to Walnut Ridge, Schonberger

JOHN H. BRYAN, ATTORNEY AT LAW

with whom he dined frequently.

35. A real estate purchase agreement had previously been manufactured by

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.

JOHN H. BRYAN, ATTORNEY AT LAW

manufactured purchase contract from Mountain America to Schonberger. The property

America (Deed Book 239 at page 485).

38. Furthermore, there never was a transfer of $294,000.00 or $300,000.00 in

$300,000.00 construction loan approved by Leon Cooper and supported by the

home from her.

JOHN H. BRYAN, ATTORNEY AT LAW

in their spreadsheets, as well as on their website, all of which were presented to

41. WSMR was simultaneously engaging in a national advertising campaign,

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

JOHN H. BRYAN, ATTORNEY AT LAW

In many instances, it would appear as if the development were actually in Lewisburg,

JOHN H. BRYAN, ATTORNEY AT LAW