Case Summary - Kramer BK, (McGuire Client) Revised 10/27/13

 I believe that 34 investors including myself have been defrauded out of $1,558,000 by the actions of Kathleen Kramer.

 Kathleen Kramer lives in Huntington Beach, CA

 The fraud was committed through a real estate investment involving 3 LLCs Canyonland 1, Canyonland 2 and Notus Land Group LLC

 Kramer is the managing member of both Canyonland1 and Canyonland 2 LLCs

 I have an interest in Canyonland1 LLC by purchasing 1 share for $50,000 on 9/14/06

 CL1 and CL2 were formed to purchase an interest in Notus Land Group (NLG) for the purpose of acquiring 78 acres of land near Notus, Idaho

 CL1 and CL2 are Arizona Limited Liability Companies, Kramer is Managing Member of both

 Kramer owns 10% of CL1 based on a $500 contribution and “Services”

 It is not clear if she made any other cash contribution

 My 3.8 % interest cost me $50,000

 NLG is an “Idaho Limited Company” per the Operating Agreement of the NLG

 Joe Rotta is the Managing Member of NLG

 Canyonland 1 invested $1,300,000 and Canyonland 2 invested $258,500 in Notus Land Group

 Wire transfers were made by CL1/CL2 to NLG in July of 2006 thru, March 2007

 NLG buys the 78 acres on 11/13/06 from Mitch Bicandi per title documents (This fact was only discovered by me in May, 2011)

 Mitch Bicandi owns many other properties around Boise and Notus, Idaho

 The prospectus for CL1 had described a purchase price for the land of $2,600,000

 CL1 and CL2 investors never see an appraisal of the land.

 The lot is described in the prospectus as a lot that matches the maps for 20299 PURPLE SAGE RD CA ID, CA. and also defined as parcel 38554000 0 in the Ada County Idaho assessors records.  The investors in CL1 and CL2 never see any documents showing the actual purchase of the land by NLG

 Title documents show that the purchase was secured by a mortgage carried back by the sellers of $500,000 Instrument 200690867. (These documents were only located by me in May, 2011.)

 CL1 and CL2 were never told about this seller financing.

 (The timing for the items below are suspect)

 Joe Rotta enters into a loan agreement with Next Generation Construction and executes a promissory note on Oct 26, 2006.

 The managing member of Next Generation is Emil Antoine

 Next Gen was the builder on another project where Kathleen Kramer was arranging the sale of homes

 Joe Rotta and the owner of Next Generation had collaborated on a number of projects.

 The purpose of the 2nd loan is apparently to pay off the seller financing loan

 A mortgage securing the promissory note is executed March 27th 2007 (instrument 207035572)

 The members of CL1/CL2 are only told about the loan from Next Gen and not about the seller financing from the Bicandi's.

 NLG fails to pay as required and Next Generation files for foreclosure on the land on March 21, 2008

 Decree of Foreclosure was entered on Nov 25, 2008

 The property, the sole asset of NLG, was sole at a sheriffs sale for $600,140 on Jan 27, 2009

 The buyer is the original seller, Mitch Bicandi

 Mitch Bicandi has now sold the land for $2,600,000 and bought it back for $600,000 making a $2,000,000 profit although none of the details or documentation is provided to the CL1/CL2 investors and there is nothing to document the price paid.

 This all took place through the actions of Joe Rotta, Emil Antoine and Kathleen Kramer who have all collaborated on other projects before  CL1 and CL2 sue NLG and Joe Rotta on March 17, 2009 case CV 0C 0905105 Ada county Idaho for both:

 a) The right to redeem the land back for the loan balance

 b) $1,558,500 the cash invested

 The claim is based on fraud, breach of fiduciary duties, fraudulent inducement, negligence, breach of contract, and violation of Idaho securities law.

 Joe Rotta does not appear in court to defend the claim

 CL1/CL2 wins the case and are initially awarded the a portion of what we were requesting ("a" above) only the right to redeem the property but no cash on Jun 4, 2009

 Kramer does not appear to take any action to obtain financing to redeem the property and the right to redeem the property expires on Jan 27, 2010. (1 year after the sale)

 The judgment is amended to award CL1/CL2 $1,558,500 + attorneys fees.

 The 2010 K1 for Canyonland1 lists the value of the LLC as 0

 Kathleen Kramer files for bankruptcy on March, 2011.

 At the meeting of creditors (341-a hearing) Kramer is asked if she accepted any payment, bonus, or fee from Joe Rotta while she was the managing member of CL1 or CL2.

 She at first refuses to answer but after having a conference outside with her attorney comes back in the room and says "no"

 The question may have been asked too narrowly . She could have accepted the payments through any of the many LLC's she has created.

 At the meeting of creditors she described a payment that she had been making to her disclosed the parents and described it at support to parents on a "fixed income"

 After questioning it was revealed that she has been paying the mortgage on rental property the mother and father-in-law own. That could be done to hide assets.

 There are many people who worked in the office with Kramer at the time that she was offering these investments including; Jake Cesana, Devra Barnes-Crevillo, Seana Riggins.

 Under the right questioning it may be very easy to reveal that Kathleen was receiving payment from Joe Rotta while she was the managing member of Canyonland  Michael Morawski and Frank Constant were charged in federal court in May, 2011 with operating an alleged $16 million Ponzi scheme that defrauded more than 300 investors

 The two men (of Sleepy Hollow and West Dundee, respectively) ran Michael Franks LLC, a now defunct real estate investment company located in suburban Palatine, just outside of Chicago.

 Kramer was acting as a selling agent for Michael Franks LLC.

 Jonothan Pink, an attorney for another creditor in the Kramer BK tells me that they have sworn testimony that Kramer was accepting payments for providing another project with investors.