The first of several securities fraud complaints was filed today against RML, Luther Parker, Larry Ohm CPA, Joe Thomas and all “board members” of Ridge Management Ltd, Inc.

This first complaint for securities law violations was filed with the State of Tennessee Department of Commerce and Insurance Securities Division in Nashville.  Below you can see the completed form.  Attached to the form was the following information along with an included CD-ROM that provides copies of nearly 300 pages of applicable documents and evidence.

Since the current ownership of all 84 units at Deer Ridge Mountain Resort include domiciles in 19 states, I intend to file similar complaints for securities fraud, and other securities law violations, with each of those additional 18 individual states securities divisions.  Additionally, since four of the five board members live outside of Tennessee and since ownership is spread across 19 states, I intend to file a similar complaint for securities fraud and other securities law violations with the Securities Exchange Commission (SEC) in Washington D.C. since the geographically diverse ownership makes it a federal case. (Note: If an owner’s home address is in any particular state, then almost always, that state’s unique and specific securities laws must also be followed to the letter – as well as the securities laws of the state of Tennessee.)

As I have previously mentioned here, Luther Parker, Larry Ohm and Joe Thomas all have continued to falsely represent that RML makes money and does not cost our GGRC HOA and the Deer Ridge owners money.  In spite of me showing my proof that RML has lost us $2 million during the past 16.5 years BASED ON THEIR AUDITS, the Gang of Six refuses to admit their lies.

I have asked Luther Parker for his proof of his statements in his November 15, 2011 letter that was sent to all owners, “RML does not cost the HOA. In the past it funded GGRC approximately $45,000 per year.  The cost to operate GGRC remains the same with or without RML. HOA fees would not be cut in half.”

Folks, these statements by Luther Parker are lies.

And I am tired of Luther Parker, Larry Ohm CPA, Joe Thomas, David Barone, Tom Reise and Margie Duncan intentionally misleading all owners regarding this hugely important and pivotal matter.  Luther has not come forward with any proof. So, I intend to force him to prove his statements were true to state authorities – in lots of states.

Based on my experience gained from starting and owning my own National Association of Securities Dealers (NASD) broker-dealer corporation and being a member of the Securities Investor Protection Corporation (SPIC), and having raised $25 million from investors and venture capital, I know something about state and federal securities laws.  And it is my opinion,  based on all of that experience, that these kinds of lies told repeatedly by Luther Parker, Larry Ohm CPA, Joe Thomas, David Barone, Tom Reise and Margie Duncan should be considered securities fraud.

Additionally, since buying any condo at Deer Ridge requires that any owner become a de facto stockholder of RML, at least 40% of all owners’ HOA fees will be squandered by feeding RML’s massive negative cash flow. Since every new owner, along with all existing owners, are forced to fund this ongoing need for capital contributions into the illegitimate RML, I believe that additional, ongoing major securities fraud is committed by Joe Thomas every time he sells a condo.

This is because Joe Thomas NEVER tells buyers they will be forced to own part of RML and fund these huge negative cash flows. I believe that this despicable and intentional lack of disclosure by Joe Thomas probably violates multiple other state and federal securities laws as well as being violations of the rules and regulations of the Tennessee Real Estate Commission.

RML Is A Corporation That Issued Shares And Is Required To Abide By Securities Law

Whether the Gang of Six likes it or not, Ridge Management Ltd, Inc. is a corporation that is governed by securities laws in Tennessee and elsewhere. As such, these securities laws regulate what can be done, how it can be done and what can be said or not said with regard to RML.

One of the things officers and directors cannot do is lie and mislead investors in the corporation.

If I am showing, based on the corporation’s own audits, that RML lost $2 million during the past 16.5 years, you can easily verify my statement and my math by reviewing the same audits.  The same is true for the Securities Division of Tennessee, and all other securities agencies and the SEC.

Luther Parker made his above statements about a month ago.  I’ve asked him to prove it.  He has chosen once again to ignore owners’ demands of proof – and has not provided an iota of proof of his statement.  Again, this is Luther Parker’s most recent published lie, “RML does not cost the HOA. In the past it funded GGRC approximately $45,000 per year.  The cost to operate GGRC remains the same with or without RML. HOA fees would not be cut in half.”

Uh huh.

Now, he can try to prove every nuance of those statements to the Securities Division of Tennessee.  And, they won’t take his empty, arm waving and name calling as proof of anything!  Plus, they have their own forensic accountants and forensic computer experts who know how to find malfeasance and ferret out the REAL truth.

Better get ready, boys, they are from the government – and they are here to help you!

Securities Division of Tennessee – An Agency With Big Teeth

Just so you know, the Securities Division of Tennessee is not some toothless state agency without power to force compliance.  Actually, it is just the opposite.  It can fine both the corporation and/or the individuals associated with the corporation for all sorts of securities law violations.

A review of recent actions taken by the Securities Division of Tennessee shows that they have forced consent decrees, taken away licenses, shut down companies and have fined individuals involved with various securities law violations, including securities fraud, with personal fines exceeding $500,000 for EACH person involved and for EACH violation.  These are for civil violations.  If they uncover criminal violations, those charges and actions are dealt with separately and IN ADDITION to the punishments and fines for civil violations.

I would call that some major teeth, n’cest pas?

Just The Start

Virtually every state has a securities division or agency similar to the Securities Division of Tennessee.  And each one has similar kinds of teeth for similar kinds of securities fraud.

Of course, if you think that’s bad – well, then we also have the Securities Exchange Commission to help us out since Deer Ridge and RML fall under federal scrutiny too.  The SEC has monster teeth.

These are the same folks that sent Martha Stewart and Bearnie Madoff to prison after charging them with securities fraud and other securities law violations. The SEC has already charged 87 CEOs, CFOs and other senior officers and their banks and mortgage companies in the 2008 Financial Crisis with securities violations and have already fined these officers and directors with nearly $2 billion in penalties, disgorgement and other monetary relief.

The Word of Today For The Gang of Six: Disgorgement

Disgorgement is repayment of ill-gotten gains that is imposed on wrong-doers by the courts. Funds that were received through illegal or unethical business transactions such as securities law violations are disgorged, or paid back, with interest to those affected by the action.

Individuals or companies that violate Securities and Exchange Commission (SEC) regulations are typically required to pay both civil money penalties and disgorgement. Civil money penalties are punitive, while disgorgement is about paying back profits made from those actions that violated the SEC’s regulations. However, disgorgement payments are not only demanded of those who violate securities regulations. Anyone profiting from illegal or unethical activities may be civilly required to disgorge their profits.

My expectation is that the SEC and the various state securities agencies will take this same approach of disgorgement with regard to the $2 million Luther Parker lie, and all the OTHER lies and misrepresentations, and force this kind of repayment to ALL past and current owners at Deer Ridge. (Yes, folks, even those of you who have already sold your unit or lost it in foreclosure or forced to sell at a loss may be covered by the complaint process – so be sure and file your own complaint!  See below.)

Based on everything I know about securities law – and the MANY ways that things are wrongly done at Deer Ridge and the way lies have been told for years along with all the massive, misleading misrepresentations – I think the SEC might find it interesting to research ALL the ways that this fiefdom has been run for so many years – and the millions of dollars it has cost past and current owners.

Allegations

Remember, as of now these are just my allegations of securities wrong doing by Luther Parker, Larry Ohm CPA, Joe Thomas, David Barone, Tom Reise and Margie Duncan.  I believe that I am 100% correct on these allegations based on my years of experience in the business.  We will have to wait and see if any, or all, of the 19 states and/or the SEC agree with me.

Below the line is what I filed with the official complaint form for the Securities Division of Tennessee.  If you would like to file your own securities law violations complaint against RML and/or the individual members of the Gang of Six with the Tennessee Securities Division, just click “Book ‘em Danno!”

Note:  It costs you nothing to file a securities law complaint against RML and the Gang of Six.   The great State of Tennessee will take care of it all for you, start to finish, without you having to spend a penny.  The same is true for the SEC – and probably every one of the other 18 states where Deer Ridge owners live.

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Investor Complaint For Securities Fraud And Other Securities Law Violations Filed Against Ridge Management LTD, Inc.
and
President Luther Parker, Treasurer Larry Ohm CPA, General Manager Joe Thomas, Vice President Tom Reise,  Secretary David Barone and Director Margie Duncan

Summary

Ridge Management Ltd, Inc. (“RML”) is a “for profit” Tennessee domestic corporation, with corporate offices at 3710 Weber Road, Gatlinburg, Tennessee 37738, and was originally incorporated December 29 1987.  A copy of the current filing information (Control #198618), incorporation documents, stock certificate and articles of incorporation are included as Exhibit A.  (All supporting documents are in Acrobat format and are contained in the included CD-ROM.)

RML is owned by the 84 owners who own individual condominiums at Deer Ridge Mountain Resort, Gatlinburg, Tennessee, which is governed by the Gatlinburg Golf and Racquet Club Condominium Association, Inc. (“GGRC”) in accordance with the Tennessee Horizontal Property Act.  GGRC is a “non-profit” Tennessee domestic corporation with corporate offices at 3710 Weber Road, Gatlinburg, Tennessee 37738, and was originally incorporated March 13, 1984. A copy of the current filing information (Control # 139212) is also included in Exhibit A.

Luther Parker, of Memphis, Tennessee, serves as the President of both GGRC and RML.

Many, if not most, owners of the 84 total outstanding shares of RML are believed to be unaccredited and unsophisticated investors.  The prices for condos at Deer Ridge generally range from $35,000 to $90,000.

RML is a rental company that provides motel services for certain Deer Ridge owners, and other real estate owners who do not own a Deer Ridge unit, who wish to rent their individual condo or cabin.  Only about 60 of the 84 units at Deer Ridge currently use the motel services of RML.  The other 24 owners do not rent their condo or use another rental management company.  It is important to note that RML is not solely focused on providing motel services to Deer Ridge owners – but is, instead, a motel service that aggressively pursues cabins and other rental properties which are completely unaffiliated with Deer Ridge.  However, in spite of RML expending up to $100,000 and more each year in advertising and marketing, this high risk small company has not been successful in competing in the motel business marketplace and has only signed up about a half dozen additional rental properties.

As a consequence, based on corporate audits, RML has lost $2 million during the past 16.5 years.  As the following will show, this $2 million loss was funded by illegitimate capital calls.

By way of background, for the past six plus years, I have been an owner of one of the 84 condo units governed by GGRC.  As such, I am one of the 84 de facto shareholders of RML.

As an MBA, and the founder and past owner of a NASD Broker/Dealer company which was also a member of SIPC, I believe that I have the necessary credentials and background to recognize that RML has committed, and continues to commit, what I believe are major state and federal securities law violations including securities fraud exceeding $2 million.

I believe that many of these violations may include current criminal conduct as well as blatant civil violations including ongoing securities fraud happening on a monthly basis.

It is my contention that these securities law violations, which have been going on for more than two decades, have already resulted in many past and current stockholders being forced into personal bankruptcy and/or losing their Deer Ridge condo in foreclosure or have been forced to sell their unit at a significant loss.

Currently, the owners of the 84 units at Deer Ridge are comprised of approximately 14 owners who live in Tennessee and 70 who have domicile addresses in 18 other states.

As such, since securities laws for other jurisdictions are clearly involved, we intend on contacting the state agency for securities laws in each of those 18 other states as well as the Securities Exchange Commission in Washington D.C. for issues regarding federal law.  We intend on sending those agencies this same information in this letter along with a copy of the enclosed CD-ROM that contains the supporting documents and evidence.

However, since I am a born and raised Tennessee resident, and since the corporations involved are domestic and under your jurisdiction, I wanted to first contact your department regarding these securities violations so that you could have a head start on enforcement and compliance.

As such, I respectfully request that the Securities Division of the Department of Commerce and Insurance for the State of Tennessee thoroughly investigate this complaint for the protection of the past, current and future owners of common stock in RML.

Investor Complaints

My investor complaint includes the following allegations:

1. Luther Parker, President of both GGRC and RML, continues to perpetrate a fraud on all stockholders by fraudulently claiming, as recently as 30 days ago, that RML has continually made money for the owners.  Please see Exhibit B, Luther Parker Letter, dated November 15, 2011 and mailed to all Deer Ridge owners on or about December 1, 2011.
2. In spite of the fraudulent claims by Luther Parker, CPA audits commissioned by the corporation clearly show that RML has lost nearly $2 million of investors’ money during the past 16.5 years.  This loss of $1,915,934 is calculated based on CPA audits completed by Hickman and Company, CPAs under the direction of Luther Parker, President, Larry Ohm, CPA and Treasurer and Joe Thomas, General Manager.  Please see Exhibit C for copies of all audits and a comprehensive analysis of the audited numbers.
3. This RML loss of $1,915,934 over the past 16.5 years equates to an average RML loss of $116,117 every year.
4. This annual average RML loss of $116,117 is funded directly out of the pockets of all 84 Deer Ridge owners under the guise of increased monthly HOA fees to all condo owners at Deer Ridge who happen to also be the stock holders of RML.  Instead of the required capital for the operating deficit being funded by an optional capital call to all stockholders, the needed funds are fraudulently included in the monthly HOA fees that are required of all owners.  These hidden equity payments continue to equal more than 40% of the contrived monthly HOA fee.  Please see Exhibit D for a list of all current stockholders.
5. This annual average RML loss of $116,117 equals 40% of the $290,540 annual HOA fees collected from all owners of the 84 units at Deer Ridge.  As a consequence, nearly half of all HOA fees paid in by the mostly unaccredited and unsophisticated investors are being squandered by this illegitimate corporation’s need for monthly capital infusions.
6. I contend that the actual RML losses are, in fact, much higher than the annual average RML loss of $116,117 shown on the audits.  This is because the audits indicate various expense items that should rightfully be associated with and cost accounted with the motel operation of RML are, instead, spurious costs that are listed as expenses of GGRC.  I believe that this is being done in order to intentionally deceive stockholders as to the actual losses that accrue each year from RML’s unprofitable motel operation.
7. RML was illegitimately formed by the board of directors of GGRC in 1987 without a vote of owners – and without providing owners any kind of disclosure or offering document that detailed the risks, management compensation, etc. of the unregistered security.  In spite of it not being an approved Common Expense of GGRC, funding for this new corporation, RML, was pulled from the general operating account of GGRC, a non-profit corporation, which in turn was, and is, fully funded by the 84 owners of the condos at Deer Ridge Mountain Resort.  As such, RML has offered and continues to offer, unregistered securities to Tennessee residents along with residents of at least 18 other states. Please see Exhibit D.
8. Under the Securities Act of 1933, it is against the law for any company, or “issuer,” to sell securities without either registering the securities with the Securities and Exchange Commission pursuant to Section 5 of the Securities Act or relying upon a valid exemption from the registration requirements. Similarly, pursuant to each individual state’s “Blue Sky” laws, it is generally against the law to sell securities within a state without either registering the securities with the state’s securities regulatory agency or relying upon a valid state exemption from registration.
9. At no time has RML or GGRC ever issued any kind of Reg D private placement memorandum or any other offering document or any type of disclosure documents to the stockholders of RML.  There has never been any discussion of risk factors, management compensation or limitations of transfer of ownership that could have tax consequences to both the stockholders and the corporation.  Additionally, no investors were ever asked to complete any prospective purchaser questionnaires that asserted that they were accredited.  Additionally, no Form D was filed with either the state of Tennessee or with the SEC in Washington, D.C. nor was there any filing fee paid in Tennessee for RML or GGRC to qualify for any securities exemptions.  As a consequence, any securities offering made by RML or GGRC does not qualify for any exemptions contemplated by Tenn. Code. Ann. §48-2-103.
10. TENN. CODE ANN. § 48-2-102 provides that a security is defined to include investment contracts. An investment contract is an agreement wherein initial value is given and subjected to the risks of an enterprise, with a valuable benefit of some kind, over and above the initial value, being promised, but the investor does not receive meaningful rights to exercise practical or actual control over the managerial decisions of the enterprise. I believe that this definition of an investment contract includes an investment in a vacation home.  Please note from Joe Thomas’ current Real Estate Sales Package that is available to the general public, shown as Exhibit E, that he sells condos at Deer Ridge Mountain Resort as a “personal or corporate investment.”  Joe Thomas is also currently advertising these investments in the mainstream media, thereby, in my opinion, publicly offering unregistered securities to Tennessee residents and engaging in securities fraud.
11. In examining Exhibit E, “Joe Thomas Deer Ridge Sales Package, December 2011,” note the following reference: “GG&RC HOA Fees cover maintenance and upkeep of all commonly owned areas including but not limited to exterior lighting, parking lot, landscaping, playground, tennis court, picnic pavilion, recreation building including indoor pool, Jacuzzi, sauna, steam room, game room, offices, golf membership and multi-peril insurance on the same.” In spite of Joe Thomas’ insider knowledge and review of the annual audits, nowhere in his “disclosure” is any reference to the fact that 40% or more of the HOA fees listed are used to fund the average annual operating deficit of $116,117 of RML based on the corporation’s audits.  As a consequence, buyers of condos at Deer Ridge are never told of this ongoing capital call requirement, and major risk factor, prior to their purchase of a condo.
12. Buyers and owners of condos at Deer Ridge are given no choice of owning shares of RML.  All owners must own a share of RML and are required to fund RML’s large operating deficits under the guise of required HOA fees that are nearly twice what would be required if RML were not funded by HOA fees.  If owners object to this ongoing monthly capital call and do not pay, those owners are threatened with foreclosure of their home at Deer Ridge.  This includes the 24 owners who do not use RML’s services – many of whom object to this illegitimately required monthly capital call funding into RML.
13. Additionally, there continues to be a complete lack of any disclosure whatsoever regarding the required, ongoing, monthly capital call funding for RML’s negative cash flow when a new owner purchases a condo at Deer Ridge.  For example, when I bought my unit, Joe Thomas acted as both listing and selling broker on the transaction.  At no time did Joe Thomas disclose any requirement for us to own a participating share of RML nor did he disclose that nearly half of the property’s annual HOA fees would be used to support a motel management company’s negative cash flow – even if we were not users of RML’s motel services.  It is our understanding from recent property sales that Joe Thomas continues his historical lack of disclosure.
14. The fact that Joe Thomas also served then, and continues to serve, as General Manager of both GGRC and RML, as well as the principal broker of Ridge Resort Realty (a DBA of RML), gave and gives him complete knowledge and insights into the true operation of both corporations.  As such, I contend that Joe Thomas knowingly and deviously omits this disclosure as part of his deceptive trade practices as a real estate agent since many buyers, ourselves included, would have never bought a Deer Ridge condo if proper disclosure of this risk factor had been properly made.
15. It is my contention that most buyers of small condos under $90,000 do not expect that they will also be unwilling stockholders in a money-losing motel business that will squander almost half of each year’s HOA fees.  As such, the lack of this disclosure by broker and General Manager Joe Thomas is especially nefarious and fraudulent.
16. It is my contention that Luther Parker, president, is aided and abetted by all four other members of the board of directors and the company’s general manager, all of whom are co-conspirators in securities fraud and other securities law violations and have breached their fiduciary duties to all stockholders.  The board members are President Luther Parker of Memphis, TN,  Vice President Thomas Reise of Friendship, WI, Treasurer Larry Ohm, CPA of Grant Park, IL, Secretary David A. Barone of Monroe, NY and Director Margie Duncan of Florence, KY.  General Manager of RML is Joseph Thomas of Kodak, TN.  Please see Exhibit F for a complete listing including each individual’s home address, home telephone number and personal email address.
17. It is my contention that all five board members and Joe Thomas have conspired for years to fraudulently deceive owners at Deer Ridge regarding the profits and losses of RML in order for them to continue to operate their motel business for their own personal gain and benefits – none of which are disclosed to owners.  These six individuals are concerned about the growing complaints of owners regarding having the highest HOA fees in the entire East Tennessee area.  These six individuals are concerned that if the owners knew the truth about more than 40% of the HOA fees were used to cover the exorbitant losses of RML, these owners would take action to shut down this illegitimate corporation and cut their HOA fees in half.  These six individuals are concerned that with an RML shut down, the benefits they uniquely receive from their motel business would be lost.  I contend that this is the primary reason that Luther Parker, Larry Ohm, CPA and Joe Thomas lead this conspiracy to fraudulently lie to all owners about the profitability of RML.
18. TENN. CODE ANN. § 48-2-121 provides that it is unlawful for any person, in connection with the offer, sale or purchase of any security in this state, directly or indirectly, to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading.  In spite of the corporations’ audits showing a $2 million loss during the past 16.5 years, Luther Parker, Larry Ohm and Joe Thomas continue to falsely assert that RML is a profitable operation in order to intentionally mislead stockholders.
19. Additionally, those who choose to not use RML’s motel services, such as 24 current owners,  are subjected to significant discrimination, retaliatory actions and malicious slander and libel as well as being burdened with financial costs not borne by RML participants.
20. Many of these same board members and Joe Thomas have been in complete control of the board and the operation of Deer Ridge for a decade or more.
21. The company’s treasurer is Larry Ohm who claims to be a CPA in Illinois.  I contend that because of his profession-required understanding of financial statements, Larry Ohm fully understands the audits and the nearly $2 million aggregate loss they show for the past 16.5 years.  Yet, he continually and fraudulently misrepresents that RML is making the stockholders money.  Please see Exhibit G which clearly shows Larry Ohm falsely stating that, “This clearly contradicts the accusations by anyone that HOA fees and special assessments are being utilized to pay for the costs of operating RML. In truth, in the past, it was RML that was providing a subsidy to GGRC.” This fraudulent and misleading statement by Larry Ohm, CPA, was made to all owners in spite of 16 years of audits of the corporation clearly showing a $2 million loss, or an average loss of $116,117 every year for 16 years!
22. Exhibit H includes my Warranty Deed, complete closing statement package and my fully executed purchase contract with all attachments showing Joe Thomas as the only broker involved.  These documents show that there was never any disclosure of any kind made to me prior to closing that indicate in any way that I would be fraudulently forced to support a money losing corporation such as RML as part of my purchase or a residential condo.  Again, if this had been properly and legitimately disclosed, I would have never considered closing on this transaction.
23. During the past six plus years that I have owned a condo at Deer Ridge, I have documentation that repeatedly pointed out to these board members that they are lying to the owners about RML’s profitability in light of the attached annual audits that they themselves commission each year.  Therefore, there can be no legitimate claim by any board member or General Manager Joe Thomas that they had no knowledge of the facts.
24. In spite of numerous attempts, during the past six plus years that I have owned a condo at Deer Ridge, I have never received a copy of the Administrator’s Book that lists all income and disbursements, along with supporting vouchers.  This Administrator’s Book, in this specific format, is required by the Tennessee Horizontal Property Act (§66-27 -113.) It is my understanding that Joe Thomas and the board have never made this Administrator’s Book available to any owner.  Ever.  As a consequence, no owner or stockholder in RML has ever been allowed to see the books and records as required by Tennessee state law.   It is my contention that this stonewalling is driven by the conspiring board’s strong desire to hide certain transactions from the scrutiny of the stockholders – and it is my belief that these hidden transactions hide multiple acts of malfeasance.

Again, based on my many years of experience from owning a NASD broker-dealer and my involvement with numerous private placement offerings and the applicable state and federal securities laws that control such offerings, I strongly believe there may be major, ongoing malfeasance that is negatively impacting the stockholders of RML.

The owners at Deer Ridge are mostly unaccredited investors who, in my opinion, are being consistently and deliberately deceived and victimized by a conspiracy by the board of directors of both RML and GGRC who are personally benefiting from these deceptions. I believe that these ongoing activities and material misrepresentations are violations of the Tennessee Securities Act of 1980, as amended, and put the public at significant risk of immediate and irreparable injury, loss or damage.

Based on the above allegations and the enclosed exhibits, I believe that your investigation will find that Joe Thomas, Luther Parker, Larry Ohm CPA and the rest of the board continue to perpetrate numerous and substantial securities law violations to the financial determent of past, current and future stockholders of RML.

I respectfully request that the Securities Division of the Department of Commerce and Insurance for the State of Tennessee investigate this complaint for the protection of the current and future owners of stock in RML.

I will be glad to be of help to your investigation.

Not only can I provide your department with numerous additional documents and evidence not contained on the enclosed CD-ROM, I will gladly meet with you at your convenience or discuss these allegations on the phone in order to expedite your review of the facts concerning the securities violations of Ridge Management Ltd, Inc. by its board of directors and general manager.

Thank you for your consideration of my complaint.

Sincerely,

Robert Goodman

PS:  Much of this legal fight is fully documented at my blog www.DeerRidgeOwners.com. This blog has between 35,000 and 50,000 page views per month – with interested viewers all over the country watching to see what justice can be found in the great State of Tennessee.

I hope that the actions of the Securities Division of the Department of Commerce and Insurance for the State of Tennessee will show the nation that we will not tolerate securities fraud and other securities law violations – and that even unaccredited and unsophisticated investors will be protected.

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Stay Tuned!

We live in interesting times.  And, hopefully, with the help of the State of Tennessee Securities Division, we will make 2012 VERY interesting for the Gang of Six!

From Bloomberg Businessweek – December 8, 2011

This article was recommended by one of readers.  Ron said, “I thought you might find this article instructive, especially about the kneecap job! I don’t have a dog in your fight, but I’m rooting for you.”  You can draw your own parallels with regard to Deer Ridge Mountain Resort!

A twisted tale of how homeowners were bilked by those they least suspected: their neighbors!

By Felix Gillette

Before the market crashed and home prices tumbled, before federal investigators showed up and hauled away the community records, before her property managers plead guilty for conspiring to rig neighborhood elections, and before her real estate lawyer allegedly tried to commit suicide by overdosing on drugs and setting fire to her home, Wanda Murray thought that buying a condominium in Las Vegas was a pretty good idea.

At first glance, Murray doesn’t look much like the type of person who would arrive in Las Vegas only to get tangled up in and eventually help unravel a complex criminal conspiracy. At 65, she stares out at the world through thick glasses. She is legally blind. Her eyes never quite seem to focus on any one thing. On a recent Friday morning, she sits at her dining room table wearing a zip-up leopard-print sweatshirt and recounts how she helped to foil a group of lawyers and contractors running amok in Sin City. “They didn’t think there would be four old ladies who wouldn’t put up with their stuff,” says Murray. “They really pissed me off.”

Before moving to Las Vegas, Murray and her husband ran a children’s dance studio in the suburbs of Minneapolis. Every so often, they would travel to Las Vegas on vacation. They loved the warm, dry weather. A poolside condo, far away from the Minnesota winters and a short drive from the Bellagio fountains, seemed like the perfect place to retire.

In 2002 they bought a two-bedroom condo for $105,250 in a new gated community, the Vistana, on the southwest outskirts of the city. The development’s architecture consisted of vaguely Spanish-style stuccoed buildings with ruddy tiled roofs. All told, there were 732 units in the subdivision, hundreds of imported palm trees, three swimming pools, and one cloudless Nevada sky.

Condominium complexes such as the Vistana were springing up across the city. Fueled by low interest rates and feverish demand, there were 32,964 closings on new condominiums and apartment conversions in Las Vegas from 2002 to 2007, according to Restrepo Consulting Group. At the same time, the building boom was creating a growing market for the contractors who fixed the construction problems, such as leaky roofs or faulty electrical outlets, that emerged at the hastily built developments.

In Las Vegas these large-scale repair jobs often involved lawsuits. There were a handful of lawyers in town who specialized in such suits, which pitted the collective owners of a gated community—in the form of nonprofit neighborhood corporations known as homeowner associations—against their developers.

As Las Vegas’s housing supply exploded, so did the competition among lawyers and contractors to represent new homeowner associations in so-called construction-defect lawsuits. It was in this environment, according to plea agreements recently unsealed in an ongoing FBI investigation, that a shadowy outfit cooked up a brazen scheme.

When a new development was nearing completion, the group would buy a couple of units in the community and then transfer partial ownership of the condos to individuals secretly on its payroll, according to court documents. While pretending to be residents of the communities, these “straw buyers” would run for leadership positions on boards of the new homeowner associations. By paying off community managers, hiring private investigators to find dirt on legitimate candidates, and rigging elections, the documents allege, the straw buyers were able to infiltrate boards at several new developments in Las Vegas from 2003 to 2008. Once in control of the boards, the straw buyers would then use their governing positions to steer millions of dollars in construction and legal fees back to their co-conspirators. Targets included the Chateau Nouveau, Chateau Versailles, Park Avenue, Palmilla Townhomes, Jasmine, Pebble Creek, Mission Ridge, Mission Pointe, Horizons at Seven Hills, Sunset Cliffs, and the Vistana.

An FBI spokesperson says that for the time being the agency is not commenting on the case. But already the investigation has provided a window into yet another layer of corruption that took place amid the national housing boom and its subsequent hangover—a period that saw a surge in real estate malfeasance of every imaginable variety, including false loan applications, predatory lending schemes, illegal property flipping, equity skimming, and “air loans” (loans for property that doesn’t exist). According to FBI data, the number of suspicious activity reports related to real estate fraud filed by financial institutions jumped to 67,190 in 2009 from 6,936 in 2003.

To this history, Las Vegas has managed to add another florid chapter. So far, prosecutors have reached plea agreements with 10 co-conspirators. Many more are expected to appear in front of judges in the coming months. Says Murray: “We’re all going to be sitting in the front row, watching.”

Not long after moving into the Vistana in 2002, Murray got a letter in the mail from Nancy Quon, a partner at the local law firm Quon Bruce Christensen. Parts of the development hadn’t even been painted yet, and already Quon was soliciting homeowners for a possible construction defect suit.

Among her drab fellow attorneys, clerks, and paralegals, Quon stood out. She had long dark hair, hazel eyes, and pale skin. She drove a red Lexus convertible. During her 10-year marriage to an insurance attorney, she had two daughters and worked as a legal secretary. After a divorce in 1988 she went back to school and earned a law degree. One of her best friends was a Las Vegas judge. At night they did Pilates together.

For years, Quon co-hosted a TV show on Channel 2, Homeowner Talk, in which she gave viewers advice about the city’s razzle-dazzle real estate market. A wine connoisseur, Quon sometimes gave bottles she had collected to charity.

After moving into the Vistana, Murray volunteered to fill a temporary vacancy on the community’s fledgling homeowner association board. The five-member board would be responsible for governing the day-to-day operations of the development. At the time, she says, there wasn’t much competition over the unpaid positions, which were low on perks and high on potential hassles.

In those early days, according to three longtime residents, construction problems at the Vistana were numerous but relatively minor. Some of the units had leaky roofs and windows. There were civil engineering issues involving the sidewalks. The internal fire and security systems didn’t work. Insulation, soundproofing, and plumbing needed fixing in some units.

In July 2003 the board members voted to retain the law firm Angius & Terry—rather than Nancy Quon’s firm—to represent them in a construction defect suit against their developer, Rhodes Homes. According to Murray, Quon told the Vistana residents, “I’ll be back.” Through her public-relations representative, Quon declined an interview request.

In the summer of 2004, Angius & Terry initiated the suit against Rhodes Homes. At the time, says Murray, the potential for a speedy settlement seemed promising. Rhodes Homes has since declared bankruptcy, and a representative for developer James Rhodes declined an interview request.

Murray first sensed trouble the following October, when the Vistana held its annual board election. The results were surprising. Two newcomers, an ex-cop and a union foreman, won spots on the board. It was odd, if only because nobody recalled seeing much of either man around the neighborhood. Shortly after, the two appointed another stranger to a vacant position.

In Nevada, state law requires that to serve on a homeowner association board, an individual must own property in the development. On a hunch, Murray and a group of her neighbors pulled some property records. As it turned out, the newest appointee had recently purchased a mere 0.5 percent of a single condo at the Vistana. Digging around a little bit, the Vistana residents claim they found records that the new board members were employees of Silver Lining Construction.

Murray wasn’t sure why somebody who didn’t actually live in a condo community would want to serve on its unpaid board. It seemed suspicious. In the weeks to come, Murray, along with three other like-minded ladies at the Vistana, formed a kind of amateur detective agency. They searched state property records. They dug deep into Google (GOOG) search results. They even did the occasional stakeout. The more they investigated, the more arrows they found pointing to Silver Lining Construction.

The change at the Vistana came fast that winter. In January 2005 the three new board members on the five-person board canceled a mediation session with Rhodes Homes, fired their attorneys from Angius & Terry, and replaced them with a firm called Spilotro & Kulla. John Spilotro was well known in Vegas not only because of his success as a criminal lawyer but also because of his famous uncle, Anthony “The Ant” Spilotro. During the ’70s, Anthony Spilotro moved from Chicago to Vegas allegedly to help run various mob-related businesses, including the Stardust Resort & Casino. In the years to come he ran roughshod over the city, forming a notorious burglary outfit called The Hole in the Wall Gang and touching off a spasm of street violence that drew national attention, and ultimately, a federal crackdown on organized crime in Vegas.

In 1986 police found Anthony Spilotro’s body several feet under an Indiana cornfield. They suspected he’d been buried alive. In the 1995 Martin Scorsese-directed movie Casino, Joe Pesci plays a character based on Spilotro. A quarter-century later, the surname Spilotro still gives some people in Vegas the heebie-jeebies. “When I heard that name,” recalls Murray, “I went, ‘Oh, you’ve got to be kidding me.’ ” (Spilotro did not respond to a request for comment. He has not been accused of any wrongdoing.)

That January the new members of the Vistana board hired a property management group, Platinum Community Services, run by Lisa Kim. Her husband, Vistana residents would later discover, was Ben Kim, a member of the Las Vegas Metropolitan Police Dept.’s fraud unit. On the side, Ben Kim owned and operated the Courthouse Cafe, a cafeteria inside the city’s regional justice center. He had two partners in the business, lawyer David Amesbury and Leon Benzer, head of Silver Lining Construction.

Murray and her posse of neighborhood sleuths had seen enough. They went to the Las Vegas police, who referred them to the Nevada Real Estate Division, a governmental agency charged, in part, with investigating real estate fraud. The Vistana residents filed a formal complaint and in February 2005, hoping to reclaim control of their board, conducted a recall election. When the votes were counted, their efforts had failed. Suspecting the ballots had been tampered with, Murray organized a second recall election in which the votes were tallied at the neighborhood pool rather than at the association office. This time all the board members connected to Silver Lining Construction lost. Afterward, however, they refused to step down.

In response, the original members of the Vistana board helped to file a civil suit aimed at removing the suspected interlopers. According to Murray, when they showed up in court for the first hearing, they were shocked to see a robust team of eight or so lawyers to defend the “straw buyers.” She couldn’t believe so many billable hours were being racked up to protect a handful of unpaid volunteer positions.

In the end, the jumbo team of lawyers triumphed, the homeowners lost the suit, and the Silver Lining-connected board members carried on.

In the meantime, Spilotro & Kulla hired Nancy Quon, the convertible-driving TV lawyer, to restart the Vistana’s construction defect suit.

In March 2005, on the advice of Quon, the Vistana homeowner association took out a $1 million loan to pay for some emergency repairs while they waited for the lawsuit to move forward. The board hired Benzer of Silver Lining Construction to make the repairs.

All across Nevada, people knew that if you needed to win a tricky election you might want to call a political operative named Steven Wark. In 1988 as a state campaign manager, Wark helped Pat Robertson win Nevada’s Republican Presidential caucus. In 2004, according to his interviews with several news organizations at the time, Wark raised money to help get Ralph Nader on the ballot in Nevada as a way to siphon off votes from Democratic hopeful John Kerry; George W. Bush went on to narrowly win the state. Over the years, Wark had also served as chairman of the Nevada Republican Party, hosted a fundraising event for Rudolph Giuliani, and managed several successful campaigns for Mike Montandon, the former mayor of North Las Vegas.

In spring 2005, having proven his value in Presidential and mayoral campaigns, Wark focused on a smaller political battleground. He joined the homeowner association board at the Vistana. Like the members of the board who appointed Wark to the vacant position, he did not live in the community but had recently purchased a 1 percent share of one Vistana condo.

It didn’t take long to discover that Wark, too, had a connection to Benzer. According to records from the Nevada Secretary of State, Wark and Benzer co-owned a business called Allied Environmental Solutions. Through his lawyer, Wark declined to comment.

By the time Wark arrived on the scene in 2005, the community meetings were growing increasingly heated. As a result, Wark and his four fellow allies on the board began arriving at meetings inside the cabana near the front gates of the Vistana, which everybody called the clubhouse, accompanied by entourages of burly men.

According to Murray, residents who asked the board too many pointed questions risked getting hit with fines on trumped-up charges of violating association rules. Residents recall that when confronted with the intimidation tactics, Wark would habitually drop the names of his powerful allies in Nevada politics. “They acted like they were bulletproof,” says Vistana resident Bruce Wallace.

In the fall of 2007 the Vistana board announced it had reached a $19.1 million settlement with Rhodes Homes. Of that—according to a recent accounting by current Vistana board members—about $11 million in legal fees and reimbursement expenses went to two firms: Spilotro & Kulla and Quon Bruce Christensen. That left $8.1 million for repairs.

One night that September, Amesbury, a lawyer for Silver Lining Construction, stood up at a meeting in the clubhouse. Amesbury, who owned a small firm in Las Vegas, specialized in criminal law. He was also a co-owner, along with Benzer and Kim, of the Courthouse Cafe. That night, Amesbury told the Vistana residents that in 2005 the board had signed a “right-of-first-refusal” contract with Silver Lining Construction. The contract essentially guaranteed Benzer’s company 100 percent of the construction remediation money from the settlement. Moving forward, he said, there would be no competitive bids with other contractors. Amesbury did not respond to a request for an interview sent to his attorney.

Over a roughly six-month period, from the fall of 2007 through the spring of 2008, various teams of subcontractors working for Silver Lining Construction came and went from the Vistana—painting buildings, replacing windows, and patching roofs. By May 2008, all but $450,000 of the $8.1 million was gone.

Shortly after, as the money ran out, the board members connected to Silver Lining Construction stopped showing up at meetings. “They just disappeared,” says current board member Wallace.

On Sept. 24, 2008, the day Murray had been anticipating finally arrived. That morning, and in the days that followed, agents from the FBI served search warrants and confiscated records at several businesses, including the offices of Silver Lining Construction, Platinum Community Services, and Quon Bruce Christensen.

Murray learned about the raids from a report on TV by Channel 8 investigative reporter George Knapp. “It blew me away,” she says. “I was so relieved that it was finally happening.”

While the FBI didn’t go into much detail about the investigation, it was clear from media reports that the scope extended far beyond the Vistana. “We had no idea how far-reaching it was,” says Murray. There were more surprises ahead.

On the morning of Oct. 28, 2010, Daniel Webb, a corrections officer with the Las Vegas Metropolitan Police Dept., was awakened before dawn by a phone call. It was his younger brother, William Ronald Webb (who goes by “Ron”), calling from San Diego. He wanted to know if Daniel could get up, drive across the city, and check in on Ron’s girlfriend, a well-to-do attorney named Nancy Quon. Ron was worried something had happened to her. She hadn’t been answering her phone all night.

Webb later testified to a grand jury that at first he was reluctant to indulge his brother, who sounded drunk. There was a history of mental illness in their family, and Ron had been acting paranoid recently, particularly about the FBI’s investigation into his girlfriend’s law firm.

Eventually, Webb gave in and drove over to Quon’s two-story house in a tony gated community on the west side of town. He retrieved the spare key from under a rock and let himself into the house. Among other amenities it had a wine cellar, a fire pit, a swimming pool, and a Jacuzzi. As soon as he stepped inside, he saw smoke. The house was on fire. He ran outside and called 911.

With an ambulance on the way, Webb rushed back into the house to look for Quon. A few minutes later, in the TV room off the kitchen, he reached into a pile of blankets heaped on a puffy couch and felt a leg. It was Quon. Her eyes were open, and her face was gray. He picked her up, carried her out to the front yard, and began CPR. On the second cycle, she started to cough.

The paramedics arrived shortly. They checked Quon and found she was breathing shallowly, had pinpoint-size pupils, a strong pulse, and was unresponsive. All were signs, one paramedic would later testify, of a narcotic overdose. They treated her with a “narcotic antagonist” drug called Narcan.

A few hours later, Daniel Webb went to the intensive care unit where Quon was being treated. He later testified that Quon was thankful and tried to explain to him what had happened. She allegedly told him that she took some sleeping pills, climbed in the Jacuzzi, and drank a can of Four Loko—a highly caffeinated, fruity malt beverage typically more popular with rebellious teenagers than wine connoisseurs such as Quon.

Afterward, she told Webb, she felt dizzy. She went upstairs, lit some candles, and drew a bath. It was all hazy, but at some point she must have gone downstairs to lie down in the TV room, she allegedly told Webb. Perhaps her bathrobe had accidentally knocked over a candle.

In August 2011, 10 months after the fire, a Clark County grand jury indicted Quon on multiple felony charges, including first-degree arson and insurance fraud.

According to prosecutors, Quon, 51, had taken some sleeping pills, drank a Four Loko, and set her house on fire in an attempt to kill herself. She wanted to take her life, they argued, to avoid the embarrassment of being arrested in the FBI investigation. They further argued that she was trying to do so in a way that would pay out a hefty insurance policy to her two adult daughters, whom she supported financially.

The prosecutor’s case included extensive testimony from Robert Justice, a 45-year-old mechanic and occasional drinking buddy of Quon’s boyfriend, Ron Webb. Justice told the grand jury that weeks before the fire, Webb had tried to hire him to buy the couple a lethal amount of the so-called date-rape drug GHB. According to Justice, Webb wanted the GHB because he thought it wouldn’t turn up in an autopsy. Justice told Webb there were better ways to kill yourself without arousing suspicion. He suggested eating some sleeping pills and then downing a couple cans of Four Loko. Ron Webb is currently in jail, facing multiple charges including conspiracy to commit murder. He has pled not guilty to all charges.

The police arrested Quon in Henderson, Nev., on the afternoon of Aug. 17. At the time of her arrest, she was carrying her passport and $7,000 in cash.

In subsequent court filings, her lawyers have denied that Quon set the fire and have rejected the prosecutor’s assertion that she wanted to kill herself for insurance money and to escape arrest. Her attorney, Thomas Pitaro, has told reporters the prosecutor’s case is based on an “Alice in Wonderland” theory.

Quon is free on $50,000 bail.

These days, life is much quieter at the Vistana clubhouse. Amid the seasonal decorations, there are signs the residents are happily moving on from their ordeal, even as they savor the prospect of watching their former attorneys, property managers, and board members shuffle off to jail.

On one side of the clubhouse, a poster marked “Before and After” leans against the wall. The “before” section features photos of the Vistana during the years when the straw buyers were managing the community. The images show untrimmed palm trees, broken barbecue grills, cracked pool decks, patches of dead grass, dented carports, and a busted front gate. The “after” photos show the gradual, physical recovery of the Vistana in the time since homeowners who actually live in the community regained control of the board.

On bulletin boards a few feet away, dozens of newspaper clippings from the Las Vegas Sun and Las Vegas Review-Journal chronicle the expanding number of individuals who have pled guilty in the FBI investigation. The display is labeled “Wall of Shame.”

The condominium schadenfreude hit a new high on Aug. 30 when Wark, the former chairman of the Nevada Republican Party, appeared before a federal judge and pled guilty to one count of conspiracy to commit mail and wire fraud. The maximum sentence is 30 years in prison. He is awaiting sentencing.

In court documents filed as part of the plea agreement, Wark admits to helping rig elections at the Vistana. Like most condominium complexes built in Las Vegas during the boom, the Vistana had a high percentage of owners who were investors living out of state. According to the court documents, Wark and his crew won the elections, in part, by targeting out-of-state owners unlikely to participate in board elections. They would fill out a ballot on the owner’s behalf without the individual’s knowledge, transport the documents to the owner’s home state, then mail the ballot back to Nevada. The ballots would arrive bearing the correct postmarks, lending the votes credibility.

The fake absentee ballots were used to tilt the campaigns in favor of the straw buyers. When homeowners became suspicious, the court documents reveal, the conspirators would bring in supposedly independent “special election masters” to preside over the vote counting. According to several plea agreements, the election overseers were paid off, too.

Over the past three months, nine more guilty pleas have followed. So far, the ranks of the admitted conspirators have included Deborah Genato of Platinum Community Services, which worked as property manager for the Vistana; Daniel Solomon, a straw purchaser who served on the Vistana board; and Amesbury, Kim and Benzer’s former partner in the Courthouse Cafe. Neither Ben nor Lisa Kim have been charged with a crime.

On the morning of Nov. 16, a few weeks after reaching a plea agreement with prosecutors, Amesbury was found on the streets of a Las Vegas suburb severely beaten with multiple injuries, including two broken kneecaps. According to a story by Jeff German in the Las Vegas Review-Journal, police have so far found no evidence linking the beating to the FBI investigation.

On a recent Thursday evening at the clubhouse, the Vistana board members met with their lawyer, Richard Haskin, to discuss the the community’s civil suit alleging that the straw buyers, in cahoots with Benzer, vastly overpaid for Silver Lining’s services. Haskin is working on an amended civil RICO (Racketeer Influenced and Corrupt Organizations Act) complaint that will add Quon as a defendant and seek upwards of $8 million in damages. “I was privy to the repairs,” says Vistana resident Tony Kneip, himself a retired general contractor. “They were outrageously high.”

Lawyers for Silver Lining Construction continue to allege the homeowner association owes Benzer’s company $750,000. “It’s a classic breach-of-contract, failure-to-pay case,” says Benzer’s attorney, Sigal Chattah.

Whether the Vistana can retrieve any money remains to be seen. The criminal fire investigation revealed that although her law firm has shut down, Quon still possesses significant assets. (No one else at Quon Bruce Christensen has been indicted.) During a court hearing in August, prosecutors told the judge that in 2009, Quon made transfers of $2.7 million and $2.9 million into an offshore bank account. Last year she bought her daughter an apartment in New York City, paying $750,000 in cash.

“The bottom line for the homeowners is we’d like to see a lot of pain and suffering on their end,” says board member Larry Fitch.

In the meantime, thousands of people who bought condos during the boom are still coping with their own financial hardship. Two-bedroom, two-bath condos at the Vistana were going for $200,000 in 2007. In November a 929-square-foot two-bedroom, two-bath unit sold for $59,000.

Murray and her husband moved out of the Vistana in 2008 and now live in a nearby development. “I couldn’t take the pressure anymore,” says Murray. “Everything we did, they came after us. I’d had enough.”

Eventually, she and her husband let their dream home slip into foreclosure. “The reputation was out there, and nobody wanted to live there,” says Murray. “So we let it go. … I took a big hit.”

These days, Murray stays as far away from homeowner associations as possible. She is, however, looking forward to seeing where the FBI’s investigation ultimately leads. Many mysteries remain.

To this day, Murray has never laid eyes on Leon Benzer. No matter how many times they typed his name into Google or drew up elaborate maps linking him to members of their homeowner association, the residents of Vistana never seemed to get a glance of Benzer in person. He always kept his distance. (Through his lawyer, Benzer declined an interview request.)

Benzer’s primary business, Silver Lining Construction, has likewise kept a low profile. In 1998 a rare article about the company in the Review-Journal reported that Silver Lining Construction had been hired to renovate the Pioneer Club, a historic building in downtown Las Vegas that had served as everything from a restaurant to a casino to a brothel. Benzer’s job was to turn the space into a gift shop. “A lot of contractors are afraid of this kind of work because of the hidden nightmares you can run into,” he told the paper. “We like the challenges. We spent six months in preplanning, and our philosophy has always been Murphy’s Law—anything that possibly could go wrong will.”

Over the years a lot seemed to go right for Benzer. He formed a charity called the Benzer Autism Foundation; a music production company, Benzermusic.com; an investment group, Silver Lining Investment; and a boutique liquor brand, Benzila Tequila, that was reportedly made from agave plants that grew on Benzer’s ranch in Mexico.

Although he has not been charged with any crime, Benzer’s businesses are now all shuttered. “Basically, between the economy and the federal investigation, there’s not much left,” says Chattah, his attorney.

Benzer, who is in his mid-40s, continues to live in Las Vegas, she says, and has a source of income. When asked about the rumor that Benzer now works as a local cab driver, Chattah responds, “He might be.”

In 2008, before the FBI raided his offices, Benzer created a channel on YouTube where he posted clips of celebrities giving red carpet shout-outs to Benzila Tequila and his foundation. You can still watch the likes of Tom Jones, Anthony Michael Hall, and Patrick Swayze tossing out paeans of support for Benzer and his charity work. “It’s God’s plan,” says ESPN’s Stephen A. Smith in one video. “If you want to make it to heaven one day, this is a good way to start.”

Gillette is a staff writer for Bloomberg Businessweek in New York.

I assume most of you already know that the “board” just had an emergency meeting – scrambling to cover GGRC’s cash flow problems produced by RML’s ongoing massive cash hemorrhage caused by us continuing to be in the motel business.

During this unannounced and secret meeting, the “board” raised the management fee from the going market rate of 40% to a whopping 50%!

This represents a 25% increase in the management fee currently being paid by Deer Ridge owners who use RML.  This means that if your unit generates $10,000 a year in gross rentals, using RML will now cost you an ADDITIONAL $1,000 a year in management fees.

Hey, we all have got to somehow cover the 10% raise the “board” awarded to Joey earlier this year…irrespective that he was already being paid over THREE TIMES the going rate for his skill sets and responsibilities for this sized property in the Gatlinburg area.

By my calculations, over TWO THIRDS of the annual RML negative cash flow of $152,000 goes to pay all the approved salaries, perqs and benefits that end up in the pockets of Joe Thomas.

Another Negative Review On Trip Advisor

In spite of the raise, in spite of the triple rate pay, it is my professional opinion that Joe Thomas should be immediately fired, for cause, as a result of the many examples of gross incompetence and gross mismanagement cited throughout this web site.

Want to see what your 50% management fee gets you through RML?

Here’s a typical negative review that is the latest Deer Ridge posting on Trip Advisor:

This is just one of the bad reviews.  Click Deer Ridge Reviews to see several other examples of how RML is viewed by many of the tourists who stay here.

You never hear about all of these bad reviews during the “annual meeting” or in the propaganda sent out by the office to all owners.  But we hear this stuff all the time as we walk around the property.

Is this what you want tourists saying about Deer Ridge after they stay in your unit?  Is this the kind of management you want for your rental property – especially when RML is overcharging you at a rate of 50% of every dollar you make with your condo?

Other Alternatives

It is my understanding that RML is continuing to charge only 40% management fee to cabin owners.  I’ve even heard that they have offered some cabin owners a rate of 35% management fees.

RML has to offer these kinds of rates in the highly competitive property management business in order to compete for customers for their services.

Then, why is RML overcharging Deer Ridge owners a whopping above-market rate of 50%???

I believe it’s because Joey and the Gang think they have you locked in as a captive market – no matter how bad a job they do or how much they want to charge you.

Here’s the secret they are praying you do not discover:  You DO have a choice!

There are several other property management companies in Gatlinburg and Pigeon Forge that would love to have your business – at a competitive rate.

There is NOTHING whatsoever that prevents you from using any management company you want to use for your property rental business.

We know of one owner who has already turned in their 60 day notice to RML.

Maybe, you should be the next.

Recommendation

Do NOT sign the new RML management agreement and lock yourself into a 50% management fee!

Instead, shop around and see if you can save yourself a $1,000 a year more for YOUR pockets – versus Joe Thomas’ pockets – by using another management company.

Then, let’s shut down RML, get out of the motel business and stop the horrific cash flow hemorrhage caused by Joe Thomas’ salaries, perqs and benefits.

PS:  Here Are The Notices

Bouncing Paychecks – And The Joe Thomas 10% Raise

Scuttlebutt around the Deer Ridge Mountain Resort property is that payroll checks to GGRC and RML employees bounced last week and/or that the bank refused to cash the checks when presented at the teller window.

If that’s true, then all owners at Deer Ridge should consider this a Red Alert!

Besides the obvious hardships it creates for employees, here’s some of the other reasons why, in my personal opinion, this is a very BIG deal:

1. It means that the cash balances in our operating accounts are so tight that games are being played just to keep the doors open.
2. It means that even in the middle of June, we are having cash flow problems.
3. Historically, Joe Thomas and the “board” have counted on the height of the tourist season to bail RML out from all the many months of negative cash flow during the non-prime time seasons…with Joey counting on the summer months to pay off the bank line of credit it uses up in the winter and early spring…and to build up cash reserves for when the summer rush ends around the middle of August.
4. If RML is already bouncing checks for its employees in the middle of the big tourist demand, it tells me that RML and GGRC are NOT positively cash flowing even during this prime time.
5. If there is really a negative cash flow in prime time right now, it also means that the line of credit is not getting paid down now in time for the winter months…which means that RML may end up in default of the loan agreement with the bank and the bank may call the note, demanding it be paid in full, probably within 30 days of the demand.
6. If this happens, GGRC is at major risk which makes all owners at major risk.
7. All of this strongly accents the screaming need for the “board” to comply with the Master Deed’s requirements for maintaining a separate escrow for the property’s multi-peril insurance policy payment of between $45,000 and $60,000.
8. According to my calculations, we should already have over $36,000 in a separate escrow account right NOW to make sure we can pay for our property insurance when it becomes due in November.
9. My belief is that there is NO MONEY in escrow for the insurance policy payment and that the board is, once again, violating the clear requirements of our Master Deed.
10. Please click An Additional MAJOR Risk To All Deer Ridge Owners so that you understand the dire consequences of the “board’s” gross incompetence and gross mismanagement by NOT abiding by the requirements of our Master Deed.
11. I recommend ALL owners contact every member of the “board” immediately to demand that this escrow be funded.
12. All of this makes me wonder why the “board” gave Joe Thomas another 10% raise at the last budget meeting! (It makes me also wonder if HIS payroll checks bounced too – or if he made sure his cleared first!)
13. Joe Thomas is probably already earning a combined compensation from all Deer Ridge sources of between $80,000 and $100,000 for managing a small 84 unit condo complex.  Our 144 unit beachfront condo in Clearwater Beach, Florida pays the property manager $32,000 a year in addition to paying for ONE maintenance person – for a property that is nearly twice the size of Deer Ridge.  Go figure.

Did You Spot THIS In Last Year’s Audits?

Many of you probably didn’t look closely at the 2010 audits of GGRC and RML – but they contain dire disclosures.

This is the screen grab from the GGRC Audit.  Note that it shows that GGRC had a year end bank overdraft of $4,300!  That means Joe Thomas had knowingly written checks for that much over and beyond what GGRC had in the checkbook!

The following is a screen grab from the RML Audit.  It shows that:

• RML had a year end bank overdraft of $34,230!  That means Joe Thomas had knowingly written checks for that much over and beyond what RML had in the checkbook!
• That means that between GGRC and RML, Joe Thomas had written overdraft checks that wouldn’t clear the bank totaling almost $39,000!
• The CNB Line of Credit had already been tapped for $33,500 and Joey and the board STILL had almost $39,000 in bad checks written to GGRC and RML vendors at the same time.
• RML is in technical bankruptcy.  This happens when a company’s liabilities exceed assets.
• As you can see from the audit, total assets were $52,000 and liabilities were $225,000!  We are talking liabilities exceeding assets by a multiple of 4.33 – so we are not talking marginal technical bankruptcy!
• Note that RML has a NEGATIVE NET WORTH of more than $173,000!
• RML lost $55,000 for 2010 according to their accounting and audit. Even as bad as this is, this is still a bogus number because Joe Thomas and Larry Ohm and the rest of the board play games with the numbers.
• They falsely attribute another $100,000 a year in expenses to GGRC that are clearly RML related costs – so the real loss is around $155,000 per year for RML.
• In my opinion, Joey and the board “cook the books” with their false cost accounting so that Joey and the board can keep us in the motel business.
• Click RML Lie Exposed: RML Actually Has Negative Cash Flow Of $152,000 Per Year and check my numbers – and let me know if you think I am right or wrong.
• At least Larry Ohm is now admitting that he had previously LIED to all owners when he continued to claim that all of GGRC benefited from the “positive” cash flow from RML. Click Liar Larry for details.

Remember, these are not MY numbers…these are the numbers directly from the 2010 audits.

Combine this information with the stories of last week’s bounced employee payroll checks and you end up with major RED FLAGS just how dire the situation has become at Deer Ridge.

Bottom Line:  RML Is Bankrupting GGRC And Putting ALL Owners At Risk!

As you can see, RML is already bankrupt.  The problem is that it is taking GGRC down the tubes with it!

We have GOT to get out of the motel business.  It never made sense for this small property to have its own motel business – and the dire consequences from all the number games that have been played so long here are finally coming to light.

• Like a Ponzi Scheme, these games can only go on so long before it collapses on itself.
• We need to shut down “Little Joe’s Notel Motel and Mountain Resort.”
• We need to sell RML ASAP to stop this bleed and hopefully recoup some of the money from the sale.
• For those of you who are on RML, you are losing more money than you are netting from your management agreement.
• For the 20 of us not on RML, we are being forced to support a failing business venture that should never have been a part of our purchase of a condo at Deer Ridge.
• If we don’t immediately get out of the motel business, be prepared for a HUGE monthly increase in our HOA fees at the November budget meeting.  It will probably be dressed up as an increase for a “reserve” account…but based on all of this stuff, I think it is obvious the “reserve” claims will be yet another lie.
• The coming HOA monthly fee increase of $70 to $100 a month will be Joey and the board’s attempt to keep us in the motel business – no matter how much money it is losing for ALL owners.
• Now is the time to stop the bleed by amputating RML.

Help Us Force The Sale And Shut Down Of RML

Luther Parker and the board just reaffirmed their dedication to remaining in the motel business.

The only way we are going to force Joe Thomas and the Gang of Six to get us out of the motel business is with a lawsuit.

This is why all owners should join with us as a co-plaintiff in our current derivative action against these individuals.  There is no cost to you to join as a co-plaintiff AND you will be able to finally see the REAL books and records on Deer Ridge.

Click Co-Plaintiff to find out how to help!

Roaring Fork Motor Trail in downtown Gatlinburg, Tennessee is a treasure for all visitors to the Park. It has rustic cabins, waterfalls, hiking trails, mountain streams and wildlife including black bears.

Absolutely best seen full screen and in hi def!

As locals, we drive this at least a dozen times each year…usually with the top down on the convertible to really appreciate the experience.

Boondocks Living – With A View

The view here is fantastic…but if you really want to be near the action, near restaurants, entertainment and activities for the kids for your family vacation, just be aware of how FAR you are from all of that when you buy or rent a condo at Deer Ridge.

The following short video shows a Hi Def Time Lapse Drive To Gatlinburg And Pigeon Forge Tennessee. The video is best seen in full screen mode and in hi def.

This video shows the drive time and road scenery of 321 from Deer Ridge Mountain Resort back to civilization. We have the best view in the Smokies – but get your groceries and shopping done on your way here to avoid the LONG drive back to Pigeon Forge, Gatlinburg, Kroger’s, Wal-Mart and Tanger Mall in Sevierville, Tennessee.

Several more videos are planned showing various drive abouts of the Gatlinburg and Great Smoky Mountains National Park – to help with your mountain vacation plans.

Stay tuned – and subscribe to our DeerRidgeOwners Channel on YouTube!

Below is the latest video we just posted on our new Deer Ridge Owners Channel on YouTube.com:

It details the Top Two Dozen Complaints we hear from tourists and guests who visit Deer Ridge Mountain Resort in Gatlinburg, Tennessee.

You can read the entire review of Deer Ridge at www.DeerRidgeReviews.com along with some other videos that we have posted at YouTube, including one on the Pathetic Pavilion and a complete video I took walking the entire property a few weeks ago.

New YouTube videos coming soon on the lawsuits and upcoming motion for Summary Judgment against Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, Tom Reise and David Barone.

Stay Tuned!

PS:  If you would like to see all our growing number of videos posted on YouTube.com for Deer Ridge, please click Channel.

If you need maintenance and repair work done for your condo or cabin in Gatlinburg or Pigeon Forge, I can highly recommend Joe Sutton.

We’ve used Joe on several occassions, and he is highly knowledgeable, versatile and fast….along with great pricing.  This plug for Joe gives us no benefits of any kind – we just wanted to refer his services because of all the great work he is done for us – including a half dozen items he took care of just this week.

You can reach Joe at 865-654-4427.

Summary Judgment And Temporary Injunction

 As you know from one of my recent postings, we finally have a hearing date set for my litigation against Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Barone and Tom Reise.  Copies of all four motions that will be heard on April 26, 2011 are shown below.  Click on each photo to download the entire Acrobat file for each document that has been filed with the Court.

We are covering several issues during this hearing that will be pivotal for this case that could cause a major, consequential and immediate impact to the way that Deer Ridge Mountain Resort is operated. We are asking that the judge issue an immediate ruling on his interpretation of the Deer Ridge Master Deed and Bylaws which we believe have been grossly and purposely misinterpreted by Joe Thomas and the rest of the Gang of Six.

 The changes resulting from a favorable ruling could include:

• The Judge’s ruling could determine, once and for all, how everyone’s monthly assessment is calculated, including HOA fees, water and cable TV bills. If we win this one point, all 30 of the 1-1 units should no longer be overcharged 82% every month on their HOA fee!
• The Judge’s ruling could determine, once and for all, how much, if any, will be owed by each owner on the current “special assessment” and the right amounts that should have been charged on all prior “special assessments.”
• The Judge’s ruling could determine, once and for all, whether the current charge to all owners for this year’s portion of the “special assessment” will be blocked by our motion for temporary and permenant injunction.
• The Judge’s ruling could determine, once and for all, whether RML and RRR (Ridge Resort Realty) are legitmate or not…and whether they were created as ultra vires acts by “board” members, making them possibly personal liable to repay all costs associated with RML and RRR for the past several years.  (My calculations show that RML alone has cost owners at least $118,000 a year…so multiply this by The Six years we’ve owned and that equates to over $700,000 that might be owed back to GGRC by the individual “board” members.)
• The Judge’s ruling could determine, once and for all, that all improvements and alterations require both a positive vote by 75% of all owners AND 90% of all mortgagees.  If the judge rules in our favor on this, that means that about $82,000, or 23% of the entire $353,500 Asinine Assessment were illegally spent by the “board” since they adamently refused to follow the Master Deed and Bylaws on this point, even knowing it was required.  If this ruling goes in our favor, the “board” can be judged, again, to have been acting ultra vires…which means that each of the “board” members could be held jointly and severally liable for the full amount of the illegitimate expenditures.
• This same ruling should make the “board” members also personally liable for all those past improvements and alterations that were done where they ignored my demands for the past 6 years to solicit the required 75% vote of all owners.  These include:
• • Joe’s Folly – The $80,000 picnic pavillion that should have never been built.
  • New pool decking – $30,000
  • Reception area and office improvements – $25,000
  • Maintenance building improvements and addtions – $15,000
  • Chairs for weddings, etc. - $3,200
  • Playground equipment – $3,000
  • New computers and office equipment – $5,000
  • Vehicles, golf carts, etc.  ???
  • Game room equipment  ???
  • Commercial laundry room equipment for RML ???
  • All of these monies were spent by the board without proper authority and approval by the owners at Deer Ridge.
• Some of these amounts are guesses and I am sure this list of improvements and additions is not comprehensive.  But once we are finally allowed to see the real books and records as provided by Tennessee state law, we expect that we will be able to add lots more to this list and correct the numbers here.  
• Even without the addtions, the above list adds up to more than $161,200 that would be ultra vires violations by the “board.”
• All totalled, this could make the “board” members individually responsible to personally pay back over $940,000. 
• If we divide this amount by the 5 board members, that would equal $188,000 that each would be responsible to pay.  However, it is my understanding that all board members are “jointly and severally” liable for this amount…which means that each board member is fully responsible for the whole amount if and when one board member or another doesn’t pay. If this happens, I can easily envision lawsuits being filed by one “board” member against another demanding that they pay their fair share of any court ordered reimbursements back to GGRC. If lawsuits between “board” members were to happen, all kinds of “smoking guns” disclosures might be uncovered.

The Other Key Motion

We also filed a Motion to Compel so that this Despicable Gang of Six is forced by the Court to finally turn over the Deer Ridge books and records.

• It’s been nine months since we filed our motion for production of documents with the Court — but so far Joe Thomas and the “board” have not complied.
• We have been waiting for nine months for Joe Thomas to turn over the books and records on GGRC that all owners have a right to see.
• Joe Thomas keeps adamantly stating that he has properly maintained the Administrator’s Book as required by Tennessee state law.  Joey keeps saying they have this information, in the right format — but they don’t seem to be able to produce it.

I wonder why?

Now, Joey and the Gang are trying to mark all of Deer Ridge’s books and records as “confidential‘ to keep us from sharing them with YOU – all past and present owners At Deer Ridge who also have a right to see and thoroughly study the books and records concerning OUR investment in our property at Deer Ridge.

They claim these books and records and the emails between the six Gang members “… may cause injury, prejudice or [particularly] embarrassment” to Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Baron and Tom Reise.

As our Motion states, these “embarrassing” consequences fall in the category of “sometimes the truth hurts.”

Additionally, our motion to block their “protective” order stipulates we completely agree that obvious information such as Social Security numbers, credit card numbers and the like will be treated as confidential….but NOT all the rest of the information that we will find in these documents.

We fully expect to find all kinds of “embarrassing” actions and statements, done and made, by this Gang of Six.

We fully expect to also find all kinds of other questionable activities that have been committed by these individuals.

And, we, and several other Deer Ridge owners, plan on looking VERY carefully and diligently for any and all signs of any potential civil and/or criminal malfeasance that might have, just maybe, been committed by any, or all, members of the Gang. As of now, we’ve not seen any documentation that proves malfeasance — but then again, we have yet to get the full books and records we’ve been requesting for over five years. Right now, we only have our overwhelming intuition that screams about ongoing malfeasance.

Maybe we won’t find any such malfeasance — but if we do, any and all guilty parties will suffer a whole lot more than simple “embarrassment.”

Maybe that’s why the Gang members are continuing their desperate FIVE YEAR long attempts to keep this information secret. They seem terrified their secrets are going to finally see the light of day.

We believe that’s one of the reasons that Joe Thomas and the Gang have fought so hard, for so many years, to keep this information out of the hands of the owners who deserve full visibility, full disclosure and full accountability from those who have been handling over $1 million a year on this property for a decade.

• What IS it that terrifies them so much about what we will find in those books and records?
• We ARE going to get to the bottom of this.
• We ARE going to get access to all the books and records that Joey and the board have tried for years to keep secret.

And, we intend to do everything we can to block their motion for “protective” order — so that we can share ALL of this information with EVERY owner At Deer Ridge Mountain Resort.

Note – Temporary Injunction To Block Special Assessment Payment – Should You Pay?

Notice that Section 4 of the Motion For Summary Judgment includes wording that we “seek a temporary and permanent injunction prohibiting and restraining the Board from attempting to make any alterations or additions to the Common Elements except in compliance with the seventy-five (75%) percent and ninety (90%) percent requirements of Article XII subsection 2 set out above, including the $340,000 “Special Assessment .. currently being billed to Association members.”  (The $340,000 is a typo that is being corrected to reflect the full $353,500.)

Bottom line:  We believe this wording blocks any and all collection by GGRC for the “special assessment” if the judge agrees with our motion. You should be your own judge of this document and its intent and decide for yourself if you are required, in light of this pending court action, to make the currently due special assessment payment.  We believe it is germaine that 23% of this special assessment is for walkway railings and lighting improvements that did not have the required 75% / 90% vote.  Also, germaine is that the calculated amount for every unit does not abide by the Master Deed Percentages – which means that the amounts of all payments due from all owners would be significantly different.

This seems like two very good reasons to me that the Judge should award both a temporary and permanent injunction against this Asinine Assessment.

Lots More Info

Please check out the following links for more information on these issues – and what we hope to gain from our $3 million lawsuit against  Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Barone and Tom Reise.

• Date Set For Summary Judgement And Motion To Compel Filed Against GGRC, Joe Thomas And Board 
• Videos on Deer Ridge Owners Litigation Coming To This Blog AND To YouTube!
•  HALF Of Your Annual Deer Ridge HOA Fees Pay To Support RML’s Negative Cash Flow 
• Deer Ridge Board – You Better Learn A New Latin Term – Ultra Vires
• How To Fire Joe Thomas And Save GGRC Tens Of Thousands $$$ Each Year
• Independent Legal Opinion: GGRC Board Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void

Copies Of Motions Filed with the Court

Motion For Summary Judgement & Temporary Injunction - Click For Document	Motion To Compel - Click For Document
Motion To Dismiss and Judgment on Pleadings - Click For Document	Motion For Protective Order - Click For Document

Stay Tuned! 

We live in interesting times!

Tick…tick…tick.

PS:  I am not an attorney and these opinions are my own.  Please be sure and refer to the full disclaimer language in the side bars and the Terms of this website. 

PPS:  Be sure and watch this blog for upcoming news about our new domain name:  HOABoardAbuse.com and our two new video channels on YouTube.com:  DeerRidgeOwners.com and HOABoardAbuse.com.  In-depth videos are being produced to fully explain, to all Owners and the World, exactly what is happening both at Deer Ridge and at other abusive HOA Board run properties across the Nation.  These videos will be posted on both DeerRidgeOwners.com and YouTube.com. 

 Stay tuned – you never know what videos might go viral!

Videos on Deer Ridge Owners Litigation Coming To This Blog AND To YouTube!

I understand how complex all this litigation stuff can be to many folks. There are so many issues involved – and then you add the noise from all the spurious claims and misinformation generated by Joe Thomas and the rest of the Gang of Six – it’s no wonder that some owners here at Deer Ridge Mountain Resort get confused.

As time permits during the next few weeks, I plan on starting a series of narrated videos that will discuss:

1. Details of both the $1 million lawsuit against me – and my $3 million lawsuit against Joe Thomas and the “board” of Gatlinburg Golf and Racquet Club, GGRC, the HOA here at Deer Ridge.  This “board” is comprised of Luther Parker, Larry Ohm, Margie Duncan, Tom Reise and David Barone.
2. The upcoming hearing in April on the Summary Judgment on several of our claims – and exactly what we expect to gain in the short term.  This Summary Judgment, alone, could have massive, pivotal, impacts on Deer Ridge.
3. The ongoing litigation regarding a variety of issues where we will be seeking damages, interest and penalties. In these cases, depositions, interrogatories and testimony from the stand will be required from past and current employees of GGRC and RML to prove our case along with the same from Joe Thomas and the “board.”
4. RML’s “Continued Viability” as “board” member Larry Ohm described it in his letter to all owners.  We plan on doing a video on this subject – including all the negative comments we are hearing from tourists who visit Deer Ridge - and all the negative reviews posted on Trip Advisor, etc. – that all point to how Deer Ridge is not a competitive motel property in the Gatlinburg / Pigeon Forge area.
5. Other detailed videos to better explain some of the operational and managerial issues that occur at Deer Ridge Mountain Resort.
6. Multiple videos on a variety of general HOA issues, abuses and injustices that are negatively impacting millions of homeowners nationwide that now live in HOA communities.

The format of the videos will probably be a combination of PowerPoint slides, photos, other video — usually accompanied with narration.

YouTube.Com

In addition to posting these videos on this blog, we have already set up a new Deer Ridge Owners account, and channel, on YouTube.com so that I can post these same videos for the entire world to see.

While the entire world may not care that much about what is happening specifically at Deer Ridge, I believe there is a huge audience for the kinds of video described above in Point 6. 

HOABoardAbuse.Com

One of the many things I’ve learned from having operated this blog for DeerRidgeOwners.com for the past 17 months is that we are not alone in suffering under a board of directors that does not operate in accordance with either state law or the governing documents of our property.

I’ve received a massive amount of emails, and other communications, from owners who live in HOA communities that are run like fiefdoms – just like Deer Ridge Mountain Resort – where owner’s rights are being either ignored or trampled – or both – and worse.

I can tell you that there is a growing outcry and demand for justice from many of these HOA board-abused owners.

Many, like me, believe that it is way past time that the federal government, and individual state governments, finally get involved in overseeing and controlling these quasi-government agencies called HOAs. 

As such, we now own the domain name HOABoardAbuse.com and have also set up it’s own channel on YouTube.com.  Right now, the domain links back to DeerRidgeOwners.com – but we plan on developing separate content for that domain that will, hopefully, provide an effective forum for change of HOAs across the country. 

I greatly dislike the idea of big government and wasted tax dollars. 

However, there is SO much HOA abuse out there, nationwide, that there desperately needs to be much more government control, monitoring, oversight and punishment of out-of-control boards like we have at Deer Ridge Mountain Resort.  With over 20% of the USA population now living under HOA controls of some kind, we need new laws and government agencies that can ensure that state laws like the Tennessee Horizontal Property Act are followed to the letter so that individual homeowners, like me, are not required to spend tens of thousands of dollars to get abusive HOA boards. like Deer Ridge, to do what they’re supposed to do in the first place.

Increased Visibility For A Nationwide Problem

It’s my hope that by posting all these videos, including the ones specifically about Deer Ridge Mountain Resort here in Gatlinburg, on YouTube will help ignite a nationwide movement for HOA reform and justice. Because of the growing uproar about HOA injustices across the country, it’s my hope that one or more of these videos might even go viral. The good news is: if one goes viral, it will draw a larger audience to the other videos.  And even a minor viral video could generate a lot of local and national press coverage with newspapers, magazines, radio and TV picking up the story and the issues.

Additionally, each of these videos will contain links back to DeerRidgeOwners.com and HOABoardAbuse.com.   This could have the effect of greatly amplifying the audience of this blog which, hopefully, will include local, state and federal officials who will finally be motivated to help solve this growing problem.

News Flash:

Hearing Date Finally Set For Summary Judgement And Motion To Compel Filed Against GGRC, Joe Thomas And The “Board”

  We finally get this case before the Judge on April 26, 2011.  This is a copy of a letter sent by our attorney to the Court:

This first court date is not for everything – but it is for some very pivotal motions and especially for a Summary Judgment on THREE issues – instead of just the two issues that we originally included in our first motion for Summary Judgment that was filed back in November:  

1. The Master Deed Percentages must be followed – that these clearly stated ratios contained in the Master Deed must be followed for all assessments and common expenses for all owners at Deer Ridge.
2. Establish the Illegitimacy of RML and Ridge Resort Realty – there is no provision whatsoever in our Master Deed for owners at Deer Ridge to support and fund, and be exposed to the business risks of operating two small businesses.  This is not the purpose of a real estate investment in a residential home.
3. Article XII of the Master Deed must be followed - it requires that the board must have both a 75% vote by homeowners AND a 90% vote by all mortgagees involved with the ownership of Deer Ridge units before any alterations, additions or improvements are made to the common elements of the property.
4. We have also filed Motions to Compel Joe Thomas and the “board” to finally provide us the books and records of Deer Ridge Mountain Resort in the exact format that is required by Tennessee state law.
5. We have also filed a Motion for Temporary Injunction to block the currently due second phase of the Asinine Assessment payment.

We believe that the Three Summary Judgment issues are clear cut interpretations of the Master Deed and Bylaws – and do not require findings of fact.  As a consequence, a Summary Judgment can be pursued on these three issues.

• As such, we are asking the Court to read the controlling documents of Deer Ridge Mountain Resort and rule on the spot on the proper interpretation of the GGRC controlling documents and Tennessee State Law. Since many of our claims rests solely on the proper interpretation of the master documents, there is no need for discovery, depositions or testimony for this part of our litigation. Instead, the controlling documents speak for themselves — and only require the Court to read the 90 pages of our Master Deed and Bylaws and make a ruling based on the Judge’s sole interpretation of these documents.
• We are highly confident that our interpretations will prevail — and the strained, manipulated and flatly wrong interpretations that Joey and the Gang have depended on for years will be denied by the Court.
• The first issue for Summary Judgment will be that the Master Deed Percentages MUST be followed for all cost allocations and assessments — instead of being based on the “arbitrary and capricious” methods that Joey and the “board” use to illegitimately overcharge all 30 1-1 units by a whopping 82%  every single month!
• If we win on this one point, this means EVERY assessment – including the monthly assessments and the expenses for water, cable TV, etc. - for EVERY unit has been wrongly charged for YEARS – including, of course, the amounts for the Asinine Assessment and all other past assessments.
• If we win on this one point, we believe that this will have FAR reaching consequences to EVERY current owner at Deer Ridge – especially all 30 of the 1-1 unit owners who have been victimized for years.
• If we win on this one point, ALL the current, and many past, 1-1 unit owners should be owed a SUBSTANTIAL amount of money refunding the gross monthly overcharges that Luther Parker amazingly stated, “were fair and equitable.”
• We would expect that these 1-1 unit owners would also be awarded interest and penalties. All of these refunds, interest, penalties may also be owed to dozens, if not hundreds, of past owners, thereby making the claims against the counter defendants even more substantial.
• If we win this one point during our Motion for Summary Judgment, it should stop all future violations by The Gang of Six as well as any new board from trying to circumvent the GGRC documents.
• Likewise, we are asking the Court to rule that RML and RRR are illegitimate – and all the monies that have been squandered over the years supporting these companies are not admissible Common Expenses. We believe that a review of the controlling documents by the Court will quickly establish that there is NO provision in our Master Deed and Bylaws for all homeowners at Deer Ridge Mountain Resort to be subjected to the costs and risks that are inherent with starting and running small businesses.
• If we win this one point, we will take expedited legal steps so that RML and RRR will be immediately shut down and disposed of by selling those companies to the highest bidder out of any and all potential buyers with the proceeds paid to those owners who were not a part of RML.
• By winning this one point of Summary Judgment, we get rid of RML and RRR, and the hemorrhage of HALF our current monthly assessments will be finally stopped — and we’ll finally be out of the motel business.  This one point alone will dramatically change the way GGRC and Deer Ridge Mountain Resort have been managed, or rather mismanaged, for over a decade – and allow for a MAJOR reduction in the HOA fees for most all homeowners.
• Article XII of the Master Deed clearly provides that there shall be no alterations or additions to the common elements or any part thereof except as authorized by the Board of Directors and approved by not less than 75% of the total vote of co-owners AND not less than 90% of the mortgagees. First, I had to fight the Gang of Six with regard to the requirement that a 75% vote of the total co-owners was required for any alterations or addition or improvements at Deer Ridge.  I finally won this point during a board meeting in which the board’s attorney, Chuck Sexton, was present. However, the Gang of Six continues to refuse to pursue the 90% vote of the mortgagees as required by our Master Deed.
• If we win this one point during our Motion for Summary Judgment on April 26, we intend to aggressively and immediately pursue forcing reimbursement directly from the members of the “Board of Directors” for their ultra vires acts of illegitimately squandering over $120,000 of owners’ money…including all monies recently spent on the walkway railings.  Even as recently as the vote on the walkway railings, Luther Parker and the rest of the “board” categorically refused to even pursue the required 90% vote of all mortgagees and gaveled me out of order at a board meeting to stop my insistence that the governing documents required it.  If we win this one point during our Motion for Summary Judgment, it should stop all future violations by The Gang of Six as well as any new board from trying to circumvent the GGRC documents.
• It will also be interesting to see what happens to the defense of Joe Thomas and the “board” by the insurance company if we are successful in proving that this Gang of Six was acting ultra vires since all indemnifications of them defined in the Master Deed and Bylaws are null and void.  This would make all members of the Gang of Six jointly and severally libel and fully responsible for their own legal costs in defending themselves against our $3 million lawsuit…along with them being jointly and severally libel and fully responsible for any repayments, penalties, interest, punitive damages, etc.

These are just the first three issues for Summary Judgment. If we are successful with these, we expect to move for Summary Judgment on other fundamental interpretations of our Master Deed and Bylaws that will stop the Gang’s abuse of it power.

We believe that pursuing the Summary Judgment is in the best interest of all parties, including all homeowners, to expeditiously resolve some of the more outstanding issues regarding our litigation.

Other Ongoing Litigation

We intend to continue to pursue our litigation on all other areas of our lawsuit too…some of the other areas will entail findings of fact that will require depositions and testimony and, as a consequence, are not subject to Summary Judgment. These will require in-depth litigation and may include damages, interest and penalties, along with payment of all of our legal fees, as we continue to pursue this matter.

We expect, in the near term, to be taking the depositions and interrogatories of Joe Thomas, Luther Parker, Tom Reise, Margie Duncan and other members of the “board.”  Depositions and interrogatories will probably be taken from past and current employees and past “board” members.

(I personally can’t wait to get Joe Thomas and Luther Parker and some of the other “board” members to testify under oath – and ask some very specific questions concerning their decision-making process and ask them for very detailed explanations about several entries in the books and records!)

So, all you Gang Members — get ready to give your depositions and interrogatories — and get ready to testify in Court.

Joey And the Gang Are Worried About Being ”Embarrassed”

We also filed a Motion to Compel so that this Despicable Gang of Six is forced by the Court to finally turn over the Deer Ridge books and records.

It’s been seven months since we filed our motion for production of documents with the Court — but so far Joe Thomas and the “board” have not complied.

We have been waiting for seven months for Joe Thomas to turn over the books and records on GGRC that all owners have a right to see.

Joe Thomas keeps adamantly stating that he has properly maintained the Administrator’s Book as required by Tennessee state law.  Joey keeps saying they have this information, in the right format — but they don’t seem to be able to produce it.

I wonder why?

Now, Joey and the Gang are trying to mark all of Deer Ridge’s books and records as “confidential‘ to keep us from sharing them with YOU – all past and present owners At Deer Ridge who also have a right to see and thoroughly study the books and records concerning OUR investment in our property at Deer Ridge.

They claim these books and records and the emails between the six Gang members “… may cause injury, prejudice or [particularly] embarrassment” to Joe Thomas, Luther Parker, Larry Ohm, Margie Duncan, David Baron and Tom Reise.

As our Motion states, these “embarrassing” consequences fall in the category of “sometimes the truth hurts.”

Additionally, our motion to block their “protective” order stipulates we completely agree that obvious information such as Social Security numbers, credit card numbers and the like will be treated as confidential….but NOT all the rest of the information that we will find in these documents.

We fully expect to find all kinds of “embarrassing” actions and statements, done and made, by this Gang of Six.

We fully expect to also find all kinds of other questionable activities that have been committed by these individuals.

And, we, and several other Deer Ridge owners, plan on looking VERY carefully and diligently for any and all signs of any potential civil and/or criminal malfeasance that might have, just maybe, been committed by any, or all, members of the Gang. As of now, we’ve not seen any documentation that proves malfeasance — but then again, we have yet to get the full books and records we’ve been requesting for over five years. Right now, we only have our overwhelming intuition that screams about ongoing malfeasance.

Maybe we won’t find any such malfeasance — but if we do, any and all guilty parties will suffer a whole lot more than simple “embarrassment.”

Maybe that’s why the Gang members are continuing their desperate FIVE YEAR long attempts to keep this information secret. They seem terrified their secrets are going to finally see the light of day.

We believe that’s one of the reasons that Joe Thomas and the Gang have fought so hard, for so many years, to keep this information out of the hands of the owners who deserve full visibility, full disclosure and full accountability from those who have been handling over $1 million a year on this property for a decade.

• What IS it that terrifies them so much about what we will find in those books and records?
• We ARE going to get to the bottom of this.
• We ARE going to get access to all the books and records that Joey and the board have tried for years to keep secret.

And, we intend to do everything we can to block their motion for “protective” order — so that we can share ALL of this information with EVERY owner At Deer Ridge Mountain Resort.

April 26, 2011

The Court date is set.  April 26, 2011.  After nearly 9 months of litigation, this will be our first hearing before the Court. We now have a fixed hearing date – less than two months from now.

If the Court agrees with us on these motions, we may be able to short circuit a lot of the Gang of Six BS and delays — and finally get rulings on these issues and effectuate major changes at Deer Ridge.

If Joey and the Gang really want quick resolution of this, they should be all in favor of getting an expedited ruling on the three issues in the Motion for Summary Judgment.

What do you want to bet that they will do EVERYTHING in their power to drag this out — and try their best to delay any ruling of any kind?

If so, that is just more proof to me that they KNOW they are NOT doing things the right way.

I will try to make the time this week to post copies of the new motions we have just filed so all of you can review them in detail.

What will be interesting will be the report that the Gang has to made at the “annual meeting” on April 30th, which is the weekend immediately following the Court date.  Will they prepare two different meeting agenda and presentations – depending on what they may win or lose a few days earlier?

Resignations and “Retirement”

Also, we have overheard gossip that Joey and other members of the Gang of Six believe that they can simply walk away from being held responsible for their past acts and actions by either resigning or retiring…or even selling their unit at Deer Ridge. 

Just to be clear,  resignations and retirement will not absolve ANY wrongdoings  by Joey and the Gang…and if we discover ANY malfeasance of ANY kind by ANY “board” member or employee, we will do everything we can to enforce ALL appropriate justice.

Stay tuned — We Live In Interesting Times!

The rulings on the upcoming Motion for Summary Judgment on April 26, 2011, along with our other motions, could end up drastically changing  the current way virtually everything is done at Deer Ridge Mountain Resort.   Plus, once we finally get the books and records on this property….well, we fully expect to find all sorts of “interesting” facts about actions and monies paid that might not have been in the best interests of ALL owners.

Hey Joey and the Gang…less than two months until our Court date….when, as Galatians 5:1 sort of states, ”Deer Ridge Owners shall know the truth, and the truth shall set us free.”  Of course, the freedom of The Gang of Six might depend on what we find once we finally get to see the books and records!

Tick…tick…tick.

PS:  I am not an attorney and these opinions are my own.  Please be sure and refer to the full disclaimer language in the side bars and the Terms of this website. 

PPS:  Be sure and watch this blog for upcoming news about our new domain name:  HOABoardAbuse.com and our two new video channels on YouTube.com:  DeerRidgeOwners.com and HOABoardAbuse.com.  In-depth videos are being produced to fully explain, to all Owners and the World, exactly what is happening both at Deer Ridge and at other abusive HOA Board run properties across the Nation.  These videos will be posted on both DeerRidgeOwners.com and YouTube.com. 

 Stay tuned – you never know what videos might go viral!

Do you realize that you and I – and every one of the 30 one bedroom owners (36% of all units) at Deer Ridge – are currently being overcharged by 82% every single month?  And, Luther Parker, the “board” president, said in a recent board meeting that he believes that this 82% overcharge for 1-1 owners is “fair and equitable!”

Do you also know that all the 2-2-Loft units should be paying 50% MORE each month – but are getting a free ride on the checkbooks of all 30 of the 1-1 owners?  Does that sound “fair and equitable” to you?

A February 12, 2010 independent, written, legal review of GGRC documents shows that all 1-1 Owners are ALL being overcharged by at least $2,350 each and every year.  For me, this adds up to more than $11,000 in overcharges since I bought here.  How much have YOU overpaid, in total, over the years, for your home at Deer Ridge?

How many more months, and years, do you want to be wrongly overcharged like this?

Would you like to immediately change this monthly bleed from excess charges?  With your help, we can probably force a permanent change on this overcharge within the next 60 days.

What The Attorney Says

Based on the February 12th independent attorney review of our Master Deed and Bylaws, his written legal opinion is that the amount of monthly assessments for EVERY Deer Ridge owner is WRONGLY calculated.

The “board” has applied what the attorney calls “arbitrary and capricious” cost allocations for ALL charges currently being paid by ALL 1-1 owners at Deer Ridge.  This includes your monthly HOA fee, the amounts for water, cable TV, telephone AND the calculated amounts that are being charged for this “special” assessment. Our monthly HOA fee for all 1-1 owners should be $148 per month instead of $270 – and our share of water and cable TV should be $62.73 instead of $136.42 each month.

These overcharges for ALL 1-1 Owners add up to $2,350 / yr.

Also, on top of that, this means that even if the current “special assessment” was valid, each 1-1 owner at Deer Ridge should be charged a total of $2,156 instead of the currently billed $3,400 – an additional overcharge of $1,244!

So, JUST over the next two years, the “board” wants to overcharge you and me and all other 1-1 owners $5,944 – assuming we have to pay anything for the “special assessment.”

That’s not how much you have to pay – that’s JUST the overcharge!

Folks, that is almost $6,000 STOLEN out of your bank account by Joe Thomas, Luther Parker and the rest of the “board” during the next two years!

Could you benefit from holding on to that $6,000 that rightfully belongs to you?

The attorney says that ALL assessments MUST be in accordance with the Master Deed Percentages.  Hence, any amounts currently being charged to you each and every month is wrongly calculated!

You can read the full, five-page legal opinion by clicking Legal Opinion.

Help Us Get A Declaratory Judgment And Injunction To Change YOUR Monthly Fees Now

Instead of each of us continuing to pay this outrageous, illegitimate monthly overcharge, we need you to join with us in obtaining a court ordered injunction to legally STOP this illegitimate “special” assessment and get a declaratory judgment from the court that will force this “board” to finally abide by our Master Deed and Bylaws.

The “board” has made it clear that they will not voluntarily abide by the recent legal opinion.  So, they leave us no choice – but to take legal action to get a court to force them.

To get an injunction, we need to file a lawsuit asking the court to rule on the same interpretations of the GGRC Master Deed and Bylaws that the attorney reviewed.  We need your help with the legal fees that will be required to stop this assessment – and also to have the injunction and declaratory judgment provide for the full and complete return of “special assessment” monies paid in by owners who have already paid.

We ask that each owner join with us and contribute $1,000 to cover legal fees and court costs to finally get this stuff resolved.  If you can only do half of that amount or even less, those contributions would also be helpful and appreciated.  This ongoing overcharge will not change without this lawsuit.

Our goal will be to also have the lawsuit go after recovery of all of our legal costs so those monies may be repaid to the owners who are willing to stand up and fight this fight.  You can pay via credit card by clicking the Donate Button below – or mail a check to me at A-202, at Deer Ridge.  Please make the check payable to the escrow account, “Deer Ridge Litigation Fund.”

This $1,000 legal fund contribution is a LOT cheaper than you paying the $5,944 in overcharges over the next two years that Luther Parker thinks is so “fair and equitable” for YOUR 1-1 unit.

Any unused, or reimbursed, legal funds will be returned, pro rata, to those Deer Ridge owners who contributed to the fund.

Judge For Yourself

I have my opinions about things. Luther Parker and the “board” have their opinions.  Here, for the first time, we have a LEGAL opinion from an independent attorney about what is really happening with your investment at Deer Ridge.  The “board” has not shown any comparable, independent legal opinion.  I am not an attorney – and neither is Joe Thomas or any member of the “board.”

And, just because Joe Thomas and Luther Parker say something is so – does NOT make it so – especially in light of an independent legal opinion clearly stating what they say is NOT so!

I invite you to read the entire five page letter from Senior Partner Lewis Howard, Jr. at the law firm, Howard and Howard (www.howardhowardlaw.com/).

Also, read my open letter to Luther Parker and the “board” titled “Independent Legal Opinion: GGRC Board Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void” and judge for yourself and reach your own conclusions.

Questions / Want To Help Block The Assessment And Lower Your Monthly HOA Fees?

Please contact me ASAP at litigation@deerridgeowners.com if you would like to help stop YOUR 82% MONTHLY overcharge.

Time really is of the essence on this! 

As a One Bedroom Owner, don’t let Joe Thomas and Luther Parker overcharge YOU $6,000 during JUST the next two years!

It is past time to stop this “ongoing abuse of power” so that all of us One Bedroom Owners can start paying only our fair share for Deer Ridge.

Please contribute today to the “Deer Ridge Litigation Fund.”

Joe Thomas and the board make a big deal out of the fact that we have audited financial statements for GGRC and RML – and that, because of this, owners don’t have any need for copies of the books and records.

They make out that this “comprehensive oversight by an outside accounting firm” should give all owners complete confidence that all the books and records of our homeowner’s association are being done correctly.

This is a fallacy — and many owners are being lulled into false complacency just because they are being told the books and records are “audited.”

Hickman and Company A.K.A. Hickman and Associates

These folks have been our auditors at least for the past 8 years since I know they did the audits for 2002.

Is this some large regional, certified public accounting firm that has the proper, internal controls and procedures to thoroughly audit an organization and uncover any misdeeds or malfeasance that may be present in our homeowner’s association?

Judge for yourself.

Their website can be found at http://www.hickmanaccounting.com/about/

As you can see from their website, “Hickman and Associates is a tax and bookkeeping firm located in historic downtown Sevierville, Tennessee. A family firm, we have proudly served the community with three generations of for over fifty years.  Hickman and Associates currently has four employees (all family members.)”

While these folks may very well be good bookkeepers and accountants, it is not clear from their website that any of the four of them is currently a CPA.  It also is not clear whether this firm has ever had any recent peer review by the American Institute of Certified Public Accountants.  The AICPA requires most CPA firms which claim to do audits have this periodic peer review to help ensure that audits are done correctly.

Again, I know of absolutely nothing negative whatsoever about this company, it owners or employees or its bookkeeping and accounting services.  I will take on face value that they must have at least one certified public accountant who participates in the annual GGRC and RML audits they do for Deer Ridge.

Accounting Company Concerns

Even if Hickman are the best accountants and bookkeepers in the world, another major concern is that such a small firm may be overly dependent upon the business handed out by Joe Thomas.  For such a small company, two audits and the bookkeeping services for Deer Ridge could make up a significant of their annual revenue.

During the Special Meeting that was held on February 6, 2010, Joe Thomas stated that we pay Hickman and Associates, et al the following each year:

• $1,300 for the GGRC audit and $1,800 for the RML audit.
• $5,400 for the GGRC bookkeeping and $21,000 for the RML bookkeeping.
• Total annual payments to Hickman from GGRC and RML:  $28,600

What percentage of Hickman’s four person accounting company’s annual revenues does the above $28,600 represent?

If, hypothetically speaking of course, Joe Thomas threaten to take “his” GGRC and RML accounting business elsewhere unless the books were “cooked”, would such a small firm feel compelled to bend the rules or “look the other way?”

Consider that much larger CPA firms have been influenced by similar circumstances. (Example: Bernie Madoff’s auditor, David Friehling, CPA of Friehling & Horowitz, a tiny CPA firm that operated from a 13-by-18-foot office.  Or, consider the 89 year old, 28,000 employee firm, Arthur Andersen CPA, that went out of business as a result of their federal criminal conviction for manipulation of the books for a company called Enron.)

Again, Hickman is most probably a very reputable firm with great people — but the above should be major red flags to all Deer Ridge owners that just because financials are audited does NOT mean that they are right – or that owners are protected from fraud.

What Exactly Is Audited?

Even if the CPA firm is doing a reasonably competent job, there are major opportunities for potential malfeasance at Deer Ridge.

Could something like that be happening at Deer Ridge using the small accounting firm that depends so much on Deer Ridge business?  Again, it may or may not be an issue here with Hickman and Associates — but how can we know for certain?

The first thing to know about most audits is that all transactions are NOT checked.  Most audits would only include “spot checking” sporadic accounts – and in many cases the CPA firm is directed by the client company to only check specific accounts that they know are pristine.

Let’s look at Hickman’s own cover letter for the audits they do for Deer Ridge:

“These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

“We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.”

So, what does this mean?

They claim no responsibility whatsoever for the financial statements themselves – washing their hands of it like Pontius Pilate – distancing themselves from whatever was contained in those Joe Thomas directed financials.

Secondly, and this is key, their audit only includes a smattering taste test of entries on those financials.  So, how much was tested?  Which accounts were tested?  Who, really, decided which accounts were tested?

No matter those answers, it is clear that our audit was NOT the thorough review of all accounts and all bills and receipts that many folks have as their preconceived notion of an audit.

Some “Hypothetical” Examples of Possible Fraud At Deer Ridge

Let’s consider the wild and crazy idea that our much beloved general manager, Joe Thomas, was not the pillar of honesty and forthrightness that Luther Parker asserts.

I know — it’s hard to imagine that Joe Thomas would even take a nickel that did not belong to him.  But let’s assume, for argument’s sake, that there was a bad and evil general manager running Deer Ridge – instead of the saint we are so blessed to have controlling our money.

Is there any possible way that this fictional bad and evil general manager could possibly circumvent the audits of GGRC and RML?

Let’s consider some hypothetical examples:

• Our general manager decides to have his personal house painted for $12,400.  As part of the deal for choosing the painter, he requires them to mark the invoice that the work was done at Deer Ridge.  The general manager then marks the invoice with the proper chart of accounts number for Deer Ridge maintenance and then files the invoice with the other maintenance receipts for the year for Hickman bookkeeping to enter into the general ledger.

  In this case, even a good auditor doing a normal audit would probably not uncover this embezzlement.  The only way this might be caught would be by owners reviewing copies of all the books and records.  Even then, it would take someone who could connect all the dots to understand that no work at Deer Ridge was actually performed for this $12,400 expenditure.

  An even harder thing to catch would be a derivative of this:  The general manager is getting ready to award a $170,000 paint bid for painting all of Deer Ridge.  But he either requires the contractor to ALSO paint his house for the same dollars – or agrees to a higher bid of $185,000 if it also includes his house – but still only lists the Deer Ridge property as being painted.

  Again, even a forensic audit might have a problem catching this kind of malfeasance.  But owners seeing all the books and records, including all competing bids for painting the property, would probably catch this.

  And, here is the important part:  Knowing that any and all owners had a right to have copies of all the books and records, including all competitive bids, might worry a bad and evil general manager so much – that they would not want to risk being investigated.

• Next example, our general manager decides to go to Myrtle Beach, South Carolina on vacation.  He secretly cuts a deal with the manager or owner at a Myrtle Beach resort for free use of their luxury ocean front condo for two weeks – in exchange for the manager or owner of the Myrtle Beach resort to use one or more Deer Ridge Mountain Resort condos for him and his family.

  Of course, our general manager doesn’t OWN any condos at Deer Ridge – so he finagles the secret use of units managed by RML to fulfill his side of this bartered deal.  Since he doesn’t receive any money, there are no rents ever paid to the actual owners of the units at Deer Ridge.

  Again, even a reasonably competent auditor would probably not be able to uncover this embezzlement either.  The only way it could probably be spotted would be a review of copies of all the RML books and records including the computerized reservation system (excluding any and all credit card info of course.)

• Our fictional bad and evil general manager has some golfing buddies who want to party at Deer Ridge.  He tells them, “Pay me cash for just one night and I will give you a whole week’s stay in a nice unit.”  The general manager pockets the cash, marks the unit as unavailable and the owner never knows their unit was used.
• Our general manager decides to have big weekend parties during the month of October to celebrate Oktoberfest in the mountains.  He orders a massive amount of food and beverages for these occasions — but over orders intentionally so that he can take the lion’s share home for his personal consumption.
• Our general manager decides at budget time to pad various accounts so that he can have the maneuvering room to use money undetected.  For example, hypothetically speaking, he has a budget of $10,000 for “seasonal decorations.”  In this budget, he shows a receipt for $1,700 worth of pumpkins including buying one pumpkin for a whopping $300 (these were actual numbers for 2009 according to Joe Thomas at a recent board meeting.)

  However, back to our story, assuming the $1,700 was spent, there were no other seasonal decorations bought during the year.  This would give our general manager $8,300 slush fund to use anyway he wished and still be able to report that he stayed under budget. But, back to our pumpkins:  What if the real costs for those pumpkins were only $700 – and a bad general manager pocketed a $1,000 as a kickback?  Or, how do we know if the pumpkin company was really owned by the evil general manager’s wife or son?

• Our bad general manager edicts that all units in RML must have new mini-blinds for all windows so that all units are upgraded and standardized.  He orders all the blinds from one company and cuts a deal that they have to provide free delivery.  However, he is creative and takes their letterhead and makes his own shipping invoice for $2,500 which he pockets.

Again, those are a half dozen simple, hypothetical examples of how malfeasance could slip past most audits IF we didn’t have our current saint for a general manager.

No Checks And Balances At Deer Ridge

Based on comments made at the February 6, 2010 Special Meeting, Luther Parker admitted that there are NO checks and balances of ANY kind in place at Deer Ridge.

Luther stated that:

• There are NO written policy manuals for Deer Ridge and the operation of GGRC and RML.
• There are NO written Delegation of Authority forms that are signed and on file.
• There are NO written systems and procedures for GGRC or RML.
• There is NO written employee manual.

Folks, this is Management 101 stuff that they teach in freshman year of undergraduate school.

Additionally, it appears that no one on the current Board of Directors performs ANY kind of managerial review of any of the actual receipts for goods and services paid at Deer Ridge.

• No one ensures that every check that is written at Deer Ridge pays for what is used and needed at Deer Ridge.
• No one sees ANY of these documents – except Joe Thomas.
• No one even questions Joe Thomas on any of these issues.

In my opinion, all of this is grounds by itself for finding the entire Board of Directors guilty of Gross Negligence and Gross Incompetence!

Management 101 Stuff, For God’s Sake!

Even if we assume we have a 100.00% honest general manager, common business sense would dictate that you have these kinds of systems and procedures, policies and written delegation of authority’s and checks and balances in place to ensure that no nonfeasance or embezzlement can ever take place.

And, on top of all that, Joe Thomas and the board refuse to allow owners to have copies of all books and records that would help the owners ensure no malfeasance or embezzlement was taking place.

What are Joe Thomas and the board trying to hide?

Joe Thomas — The Deer Ridge $10 Million Man

According to the 2010 budget issued by the board in December 2009, GGRC and RML will handle cash receipts of over $1.1 million during this calendar year.  This includes HOA fees, special assessments and RML revenues.

Assuming this was a typical year, that means that Joe Thomas during the past nine years would have handled over $10 million related to Deer Ridge.

This is a massive amount of money.  Huge.

• And, NO checks and balances in place?
• NO systems and procedures, policies and delegation of authority are in place?
• No forensic audit to help ensure that everything is done right?

This is INCREDIBLY bad management by President Luther Parker and the entire board of directors.

I am sure that Joe Thomas greatly prefers to continue things as they are:

• Completely unaccountable to anyone about anything.
• Completely allowed free reign to pretty much do whatever he wants to do with the $1 million plus a year that passes through his fingers.
• Completely insistent that NO owner EVER gets to make copies of any books and records that might catch any malfeasance.

Folks, even if trust your employees, it is incredibly bad management to not have the checks and balances in place to make sure you are protected just in case you hire someone who is not honest.

And, all of this goes beyond holding the general manager position accountable.

Joe Thomas, as general manager, is guilty of gross negligence and bad management by not having a written employee manual, and other control documents, in place in case of lawsuits, EEOC actions, claims of organizational misconduct for drug abuse, claims of sexual misconduct, etc.   Even a $100, fill-in-the-blank software program could solve the problem regarding an employee manual.

Plus, good management practice dictates that ALL positions in an organization should have WRITTEN systems and procedures, policies and delegations of authority.  There are all kinds of risks to GGRC and owners by this gross oversight by both Joe Thomas and each and every board member.

It Is Past Time For A Change

Lots of changes are needed at Deer Ridge.

Immediately fixing this massive policy and procedures hole is one of them.  Firing the Board and Joe Thomas for gross incompetence and gross negligence are also at the top of my list.

But the immediate thing to do is to give ALL owners oversight into what is REALLY happening, financially and operationally, at Deer Ridge.

And, we do this by allowing ALL owners to have copies of ALL books and records – so that all of us can audit the books, so ALL of us can institute our own checks and balances – so that all of us can finally have some assurance that things have been done right.

So that we know if ANY of our $10 million has been embezzled or misappropriated in ANY way.

All it takes is Luther Parker finally agreeing to allow COPIES of all books and records will be made available to ALL owners – starting at 9 AM yesterday morning.

If he doesn’t, we ALL should be wondering:  Exactly what ARE they trying so desperately to hide from the owners?

This is an open letter to Luther Parker and the Board regarding what we see as ongoing mail tampering at Deer Ridge.

As a result of this blog, and the efforts of other full time residents at Deer Ridge, we were able to finally force Joe Thomas and the Board to erect private postal boxes like most multi-family residents have.

As a direct consequence of a conversation that we had with the Gatlinburg Postmaster, he saved a postal box pedestal for Deer Ridge so that the property had zero cost for adding this badly needed acquisition.

(The Board and Joey never gives us any credit for this stuff – but we invite you to ask the question directly of the Postmaster for the truth of our direct efforts. Postmaster Scott Genseal told us at the time that if he did not save the one he had currently on hand for us at Deer Ridge, the property would have to wait a year or two for another free one – or would have to go out and buy a new one for several thousand dollars.)

Joe Thomas fought these private mailboxes as long as he could because he doesn’t want to lose any CONTROL at Fiefdom Deer Ridge.  Please see our other posting on this subject by clicking Postmaster Says We Have A Right To Demand Individual Mailboxes that I posted on September 20, 2009.

As a result of this forced action, Joey has once again reacted in his typical petty way:  attempted retribution against anyone who holds him accountable or interferes with his perceived fiefdom.

The following is a copy of our email about this latest Joe Thomas incident.

To:  Luther Parker and Deer Ridge Board

We attempted to get our mail the past two days.  Some of it was delivered properly into the new mailbox.  However, the postal person is also delivering to the front desk any mail that does not have our unit number.

Obviously, we still have a right of delivery of our mail to the front desk, along with any oversized parcels that come addressed to us at Deer Ridge whether it includes our unit number or not.  As you know, a vast majority of Deer Ridge owners have their mail addressed to 3710 Weber Road without any unit number – and most of this is forwarded by the office staff to their home address.

However, as part of the ongoing harassment and attempted intimidation by General Manager Joe Thomas, he has intentionally and willfully interfered with the timely delivery of our mail, and the mail of other residents at Deer Ridge.  We are fully convinced personally that we have not received some of our mail at Deer Ridge as a result of mail tampering by Joe Thomas.

We believe his actions are a criminal violation of federal law and that Joe Thomas is attempting the same violation with regard to every permanent resident at Deer Ridge.

Joe Thomas is attempting to falsely claim that if our unit number is not on the mail, it cannot be delivered to us.  It appears he has even returned some of our mail, marking it as undeliverable.  Other mail has been held up in his office for no reason whatsoever.  This alone is a criminal violation of federal law.  When our mail is delivered to the front desk, the office person is fully capable of seeing that the mail is addressed to us and put it in our slot for mail in the office.

Instead, our mail is being routed to Joe Thomas’ desk for “review.”  Joe Thomas has no right or authority to “review” our mail or delay its delivery to us.

Please see the attachment with Joe Thomas’ handwritten signature evidencing his illegal actions.

We have already taken these letters with Joe Thomas’ notes and presented them along with an official complaint to the Gatlinburg Postmaster, Scott Genseal, asking that federal authorities fully investigate Joe Thomas for these alleged violations of federal law.  As of today, we have also file a formal complaint with the U.S. Postal Inspection Service with copies of the below hand written notes by Joe Thomas.

Scott assured us that we, and all other residents, have every right to receive our mail at the Deer Ridge office if it arrives without our unit number and that Joe Thomas’ actions are in fact intentionally delaying our mail.  Delaying and otherwise tampering with mail is a federal crime.

This Is A Violation of Federal Law: Destruction, Obstruction and Delay of Mail (18 USC 1700, 1701, 1702 & 1703)

These laws state:

Sec. 1701. Obstruction of mails generally

-STATUTE-

Whoever knowingly and willfully obstructs or retards the passage of the mail, or any carrier or conveyance carrying the mail, shall be fined under this title or imprisoned not more than six months, or both.

The full law on this matter can be viewed by clicking TITLE 18 – CRIMES AND CRIMINAL PROCEDURE PART I – CRIMES: CHAPTER 83 – POSTAL SERVICE

We will not tolerate these actions by a petty tyrant like Joe Thomas – and will do all we can to ensure that it no longer happens to us or to any other Deer Ridge resident.  We will also do all we can to see that Joe Thomas is fully prosecuted for these ongoing acts of retribution.

You, as the Board, are responsible for the actions of your employee.  Act accordingly.  Now.  Or, be held liable.

Robert

We recommend that all residents at Deer Ridge double check on their mail to make sure Joe Thomas is not doing the same thing with your mail.

If he is, and he probably is, then I recommend you also file a complaint with the U.S. Postal Inspection Service by clicking Complaint Against Joe Thomas.

You are welcome to reference our complaint we just filed with the U.S. Postal Inspection Service.   Reference number is: 14953047.

By connecting the dots between your complaints and the one we have already filed, the common thread of abuse by Joe Thomas can be clearly identified by the Postal Inspection Service – and they can quickly initiate their criminal inquiry into Joey’s intolerable, despicable actions.

Will you really lose $40,000 cash if you buy a rental condo at Deer Ridge and use Ridge Management Ltd?

As an owner-occupied home, Deer Ridge is an incredible value with THE best view in the Smokies and great amenities.

However, several owners and would-be owners of Deer Ridge condos have asked me if these units are a good investment or not.  To help answer that question objectively, I had to analyze the real moving parts of buying and owning here.

The following is my detailed investment analysis based on buying a 1-1 condo unit at Deer Ridge Mountain Resort in Gatlinburg, Tennessee.  The numbers for the other sized units at Deer Ridge are very similar, bottom line.

Here are a few pages of the analysis to show you the format.  Click any of the following pages to immediately download the full report.

The Main Assumptions – Using RML To Lease and Manage:

• $50,000 purchase price with $2,000 for initial improvements and $2,000 for closing costs.
• Down payment of 25%, with a mortgage of $37,500 at 7% fixed for 30 years.
• Total resulting initial investment of $16,500.
• 28% marginal tax bracket, 15% long-term capital gain and no state income tax.
• The current $3,400 special assessment for 2011 and 2012, with an additional, average $1,000 per year assessment per unit starting in Year 3 and required for other things like roof, parking lot and “oh, by the way…” ideas from Joe Thomas and the Board.
• Annual appreciation rate of 3% per year, as an average, over the next 10 years.
• Selling costs of 10% – to cover brokerage, closing costs, etc.
• Rental income per night averaging $90 per night after accounting for specials, packages, Hotels.com / Expedia / Etc. discounts with rental rates increasing, on a net basis, by 3% per year.
• Continuation of the historical Joe Thomas and RML 39% economic occupancy for all units on average at Deer Ridge across the entire year.  This equates to a 61% economic vacancy rate. (This is the historical average across the past 8 years – with no signs of any improvement.)
• 40% RML management fee. (RML has upped this fee several times in the past – but this is the current charge.)
• $270 per month for the HOA fee (the highest per sq ft. charge in the entire Gatlinburg, Knoxville area.)  This represents an 82% overcharge compared to the amount that should be charged for 1-1 units according to the Master Deed.  This is expected to be a major point covered with upcoming litigation filed against GGRC and / or its Board of Directors.
• Water at $116 per month.  This represents double what should be charged for 1-1 units according to the Master Deed.
• Contents and liability insurance of $300 per year, $500 per year for internal maintenance and/or forced upgrades required by RML and another $500 per year for repairs.  Maid service is shown at only $100 per year for spring cleaning.  Also shown is the RML pass through costs for credit card fees of about $250 per year.
• Cobbly Nob taxes of $668 and Sevier County taxes of $400 per year.
• Electricity of about $1,000 per year on average along with charges for cable TV and telephone.
• Expenses increasing 5% per year.

The Projected Numbers – Using RML To Lease and Manage:

• Negative Net Operating Income for all ten years after all income and expenses.  This means, even without a mortgage of any amount, the property loses money every year. Over 10 years, this adds up to a loss of out of pocket dollars more than $31,000 – excluding any net proceeds from sale.
• With the 75% mortgage described above, the numbers are a lot worse.  Over 10 years, your loss of out of pocket dollars would be almost $68,000!
• Taking appreciation into account, if we sell after 10 years and sell the unit for $67,200 after buying it for $50,000 with 75% financing, then the loss after all benefits of every kind would still be almost exactly $40,000!
• That is a $40,000 LOSS – Not Gain – With everything taken into account after 10 years!
• This means after owning at Deer Ridge for 10 years, there would be zero net profit – and it will end up costing you $40,000.  This equates to costing you $4,000  a year in order for you to have a place to use and enjoy as a vacation home – assuming you are not “RML Abusive” and want to actually use your unit during the summer or holidays or during the peak foliage time in October.
• If you were to actually hold for longer – say 20 years, it gets even worse.  In that case, it would end up costing you over $86,000!

The Conclusions – Using RML To Lease and Manage:

• Using RML to manage your property, it makes zero sense to buy a unit at Deer Ridge strictly for investment purposes, as a rental unit, expecting any kind of positive ROI whatsoever – EVER.
• The exception to this would be if you are able to buy for HALF the current asking prices.  At some point, the market will PROBABLY recover and possibly go back to this current asking level per square foot.  If that happens, and you able to buy at half price, then you can make money – but will never have a positive cash flow at any time during the holding time – no matter how little you pay!!!
• If you were able to buy for $25,000 instead of $50,000 and still financed 75%, then you could make SOME money from investing in Deer Ridge.  After five years, you would NET less than $3,000 total.  Even with this low price, if you held for 10 years, you would LOSE over $10,000.  Even though these are not great numbers, you could more easily justify the cost per year as an alternative vacation cost – assuming you could really buy a 1-1 for $25,000.
• The HOA fees and the water costs are outrageously high as a result of Joe Thomas and the Board not abiding by the Master Deed Percentages for cost – and this contributes significantly to these numbers not working.
• If you can cost justify on average $4,000 per year to pay for your vacation location (not counting other vacation related costs), then your ownership at a $50,000 purchase price is at break-even with zero ROI as an investment compared to alternative investment opportunities.  Of course, for $4,000 a year, you could afford a very nice vacation in other locations without the hassle of ownership at Deer Ridge.
• If you can use Deer Ridge as your primary home, it is a genuine bargain – compared to other alternative living costs per month in the entire Knoxville area.  With a spectacular view and great amenities, and the relatively low cost per square foot, it can be an ideal primary residence with total monthly costs for everything under $1,000 a month.
• Likewise, if you are in a position to highly utilize the unit for personal use and not worry about rental abuse, the same numbers can apply as for a primary residence.
• Bottom line:  Buy at Deer Ridge to own and use – not to rent – if you are going to use RML.

If You Don’t Use RML To Lease and Manage:

• Historically, over the past 8 years, Joe Thomas and RML have been unable to average anything higher than a deplorable 39% economic occupancy at Deer Ridge.  No matter what marketing steps he takes, no matter how much or the owners’ money is spent on those marketing steps, he appears incapable of doing better with the owners’ units.
• If you were to buy at Deer Ridge and use another, more experienced and qualified management company that could cut that 61% vacancy in half, the investment returns from Deer Ridge are astoundingly better.
• Even if you keep all of the other assumptions exactly the same, the same rental rate per night, the same management fee, the operating expenses, even the 82% gross overcharge of the HOA fees that violates the Master Deed – even if all of that stays the same, and you just solved the vacancy problem that seems to have eluded Joe Thomas for years, then you can make money with a rental property at Deer Ridge.
• You no longer have a Negative Net Operating Income for all ten years after all income and expenses.  Instead, without a mortgage of any amount, the property now makes money every year. Over 10 years, this adds up to a gain in-your-pocket-dollars of more than $38,000 excluding any net proceeds from sale.  This means you have gone from a negative $31,000 to a plus $38,000 – a net swing of $69,000!
• With the 75% mortgage described above, the annual cash flow each of the ten years is right at breakeven.  Instead of the $68,000 loss you would have using RML, the positive cash flow over 10 years would now be $1,140 if you use someone else that can average a 30% vacancy rate – instead of the Joe Thomas 61% vacancy!  Note this is a swing of almost $70,000 of money in your pocket.
• Taking appreciation into account, if we sell after 10 years and sell the unit for the same $67,200 after buying it for the same $50,000 with the same 75% financing, then we have a net gain of $9,800 – instead of the Joe Thomas loss after all tax and cash benefits of $40,000!  This is almost a $50,000 better benefit in your bank account if you don’t use RML!
• This means after owning at Deer Ridge for 10 years, there would be zero net cost to you for having 30% use of your condo per year – over 15 weeks a year – and you end up with about $10,000 in your pocket – plus getting back your $16,500 down payment.

Another ROI Benefit Of Deer Ridge Not Being In The Motel Business

• Right now, Joe Thomas and the Board push all owners to belong to RML, complete with warm-hearted stories that include prayers, motherhood and apple pie – and that you are downright un-American if you don’t donate nearly full use of your condo to the good of RML.
• But Joe Thomas and the Board are playing Pied Piper – not caring if the Deer Ridge owners drown in their losses – as long as RML can keep hanging on by a thread and pay Joe Thomas all his various approved and unapproved compensation.
• The problem is that the more units available for rent at Deer Ridge, the more competition YOU have for renting your unit.
• While a more competent and professional management company could most probably improve occupancy at Deer Ridge, most owners here continue to use RML – no matter how little sense it makes.
• The current low economic occupancy rates at Deer Ridge shows that Joe Thomas has only been able to create a small rental demand for the units compared to all the competitive, newer, less expensive properties in Gatlinburg and especially Pigeon Forge.
• Since there is such low current demand, the more units for rent at Deer Ridge, the less yours will be rented.
• If more units at Deer Ridge are used for personal use or for full time residents, the fewer units there are that will compete with yours for the current narrow niche demand for these units.
• This means your occupancy should rise, and with rising occupancies, rental rates could rise – both of which should make you more money.
• Either way you look at it, Deer Ridge is a LOT better off without RML – and Joe Thomas and the Board have been lying to owners for years that the opposite is true.  Don’t listen to their Pied Piper tune.  Find someone else to solve your vacancy problem.

Want Proof?

Please see the two sets of detailed analysis that follows – the first assuming RML’s use and historical performance – the second with only the vacancy rate changed from Joe Thomas’ abysmal 61% average to a 30% average vacancy using a more competent and professional management company.  Just click Investment Analysis for your own copy of the full report.

Once you have downloaded the full report, you can email it as an attachment to anyone you wish to have a copy, such as your broker.

The good news is if you buy at Deer Ridge, no matter what Joe Thomas may tell you, you have a right to use whatever management company you want to use.

Did you rent your Deer Ridge Mountain Resort unit through Ridge Management Ltd., RML, for all of 2009?

Wonder how your unit’s performance stacked up against the other units for rental?  Well, here’s a chance to find out.

An owner of one of the 2-2 units at Deer Ridge provided me a copy of their year end RML statement.  Here’s what their numbers looked like for 2009 (used here with their permission):

A Quick Analysis

• Owner X had gross rental income on their unit of $14,454 for all of 2009.
• In December, the income was $456 for 6 rental nights according to the above information.  This works out to an average nightly rental rate of $76.
• Since this is a 2-2, let’s assume that the average nightly rental was $105 per night across the whole year.
• This means that for $14,454 of gross income, this unit was rented for about 138 nights out of the 365 nights in a year.
• This means that this unit saw an economic occupancy of only 37.7% – or conversely, a vacancy rate of 62.3% for the year.
• These numbers are consistent with the entire Deer Ridge property as a whole, which has suffered from an average annual economic occupancy of only 39% for the past 8 years under the very questionable leadership of General Manager Joe Thomas.

Is Deer Ridge A Good Investment? / Bad Investment?

• Owner X saw distributions for the whole year of $4,504.  This works out to an average monthly check to them of about $375 per month.
• From this distribution, Owner X had to also pay:  Sevier County taxes, electricity, content and liability insurance, HOA fees and other maintenance from wear and tear and theft.  All of this added up to about an additional carrying cost of about $5,800 for the year.
• This means, that Owner X lost about $1,300 for the year – not counting debt service.  This also does not include the costs for any of the thousands of dollars the board is requiring for the upcoming Asinine Assessment.
• If the monthly mortgage payment was $320 per month, then the total LOSS for the year for Owner X was over $5,000!
• If Owner X keeps their unit for 10 years – and these same trends continue, this means that the aggregate loss for them will exceed $50,000!

Does this make it a good investment – or a bad investment for owning a condo at Deer Ridge?

The answer to that is not quite so black and white – and needs a much more in depth analysis to reach a valid conclusion.

Because so many owners, and prospective buyers, want to know if Deer Ridge is a good or bad investment, my next post will be a comprehensive analysis and downloadable document – so you will finally KNOW the answer!

How Did YOUR Unit Compare to Owner X?

In the meantime, how did your unit stack up to Owner X?  What was your economic occupancy rate with RML?  How much did you REALLY end up making or losing on your investment in Deer Ridge when you count all the costs?

Please comment below – and stay tuned for the next post!

Jim and Wanda Goebel mailed the following letter to the GGRC and RML Board of Directors yesterday and copied me on their letter.  With their approval, I have included it below.

What about you?

Is Deer Ridge, as we currently know it – with its insider deals, secrecy, ongoing violations of our Master Deed and insidious conflicts of interest – what we REALLY want to keep?

Or, is it time all of that ends – and we have a Deer Ridge property that is good for ALL the owners?

Please comment below.

Just a quick note about firewood for Deer Ridge Mountain Resort in particular and Gatlinburg area in general – we’ve found a great guy for firewood for this cold winter.

We just got our second order from Matthew Roark and highly recommend him for both great prices and total dependability.  He lives near Deer Ridge and can usually deliver and stack it on your balcony with very little notice.  We pay $40 for a small pickup truck full – which is a LOT better than the tourist rate at the front desk – or what you have to pay at Food City.

If you are interested, call Matthew at 865-216-2729.

All Owners Are Negatively Impacted By Joe Thomas’ Actions As Principal Broker At Deer Ridge

Joe Thomas serves as General Manager of both Gatlinburg Golf and Racquet Club HOA (GGRC) and Ridge Management Limited, Inc. (RML) property management company and as Principal Broker of Ridge Resort Realty, another affiliated company of RML – creating a HUGE issue with conflicts of interest to the detriment of Deer Ridge Owners.

Joe Thomas and the Board run this property as if it were a motel – publicly chastising and villainizing those owners who do not choose to rent their units using RML – or, God forbid, live in their units.

We contend that through his position as Principal Broker of the on site real estate company, Joe Thomas has attempted to overtly control the ownership of units here by encouraging ONLY those potential buyers who indicate a willingness to rent their units through RML while STRONGLY dissuading others potential buyers who want to live in their unit, not rent it, or if they want to rent it themselves.

Other brokers in the Gatlinburg area have indicated an unwillingness to work with Joe Thomas or list units at Deer Ridge or even co-broker units because of Joey’s strong bias to only sell to those who want to use RML.  Because of this inherent conflict of interest, the market values of units at Deer Ridge have been severely depressed when it comes to resale, thereby penalizing all owners.

Want proof?  Consider that the real, closing price current market values of Deer Ridge units is virtually unchanged from the original selling prices of Deer Ridge in 1984!  25 years and no substantive increase in value???

Since RML is, at best, BARELY holding on right now – Joey can’t afford to lose even one unit from RML.  If all 11 units that are currently listed for sale on the Ridge Resort Realty site sold to non-RML owners, the RML party would finally be over – and even Joey and this Biased Board could no longer hide the huge cash drain that RML has caused for all owners.

Think about it.

If Joe Thomas is AGGRESSIVELY trying to keep a MAJOR portion of interested buyers from buying at Deer Ridge – just because he thinks they might not use RML – that means MUCH fewer contracts get submitted and owners have less chance to raise prices.  As a matter of fact, less demand means long periods between contracts and sellers who are motivated by this Great Recession to sell – are forced to lower prices – and even fire sale their units.

Often, I believe these fire sales are caused by Joey purposely dissuading buyers from buying who might want to live here.  Remember, Joey makes a lot more money for his little empire from getting a unit in the clutches of RML than he will make off the sales commission here – especially if there is another broker involved who is taking half the commission.

Also, bear in mind that Joey doesn’t give a damn what kind of money a seller nets when they sell at Deer Ridge.

If you are selling, and on RML, he knows he has a lock in to rental income from you owning the property.  The longer he can delay the sale of your RML rental unit, the better off he is since there is always a risk when it sells, it will be bought by someone who WON’T keep the unit in RML.

Also, if you are selling, once you are gone, you can no longer do ANYTHING to help him or hurt him…so again he doesn’t care an IOTA whether you, as a seller, make or lose money from your sale or not.

Next, please?

Joe Thomas’ SOLE focus is on whether he can make money off of the unit you currently own with his little RML empire.  To him, your unit, actually EVERY unit, is strictly a commodity with interchangeable owners…a commodity for him to utilize to HIS fullest – and your use of YOUR condo is at best an aggravation to him…and sometimes, a screaming rage when you want to do something with your unit for YOUR benefit.

All of that is my personal opinion of course – but doesn’t it make logical sense based on the antics and actions you have seen from Joe Thomas?

Joe Thomas’ Unholy Trinity Role at Deer Ridge of being the General Manager of GGRC, the General Manager of RML and the Principal Broker of Ridge Resort Realty has created a despicable conflict of interest to the determent of ALL owners.  The only person who is winning is God Joe Thomas as he rakes in OUR money from serving in his Trinity Role.

Amen.  Praise the Lord and pass the plate.

Right now, very few folks are buying vacation homes.  Add to this that Deer Ridge has NEVER made economic sense as an income property since, even debt free, these units are a guaranteed negative cash flow given the current, outrageous HOA fees we all have to pay.

This means that the only real market for these units that are for sale – are folks who plan on either living in the unit full time – or plan on using their unit so much that RML doesn’t make a lot of sense.  Actually, for owner occupants, Deer Ridge is a steal!  The price per foot for this property is obscenely low – especially considering the fantastic view and the amenities.  With so many folks downsizing right now, Deer Ridge could be an ideal primary residence for a lot of folks in the East Tennessee area.

Folks, Something Needs To Change

Actually, a LOT needs to change at Deer Ridge – and one of those changes is that we abolish Ridge Resort Realty and file a complaint with the Tennessee Real Estate Commissions concerning Joe Thomas’ self serving impact on Deer Ridge unit sales.

All we have to do is stop operating the whole property as Little Joe’s No Tel Motel and Mountain Resort, stop the biased selling of units, sell off RML – and get the HOA fees adjusted so that they are in compliance with the Master Deed and Bylaws.  Oh, and get a general manager and Board that are trustworthy, transparent and open – and allows all owners to have full access to copies of ALL books and records.

THEN, we will see MAJOR very quick increases in the market value of all Deer Ridge units – benefiting ALL owners.

Filing Complaint With Tennessee Real Estate Commissions

For all of the above reasons, we and other owners will be filing an official complaint against Joe Thomas with the Tennessee Real Estate Commissions.

You can join us by filing a complaint – all you have to do is click Tennessee Real Estate Commission Complaint Form and mail the completed document to the address shown.

Still not yet convinced to file?

Then, please read on to see if perhaps, just maybe, I can convince you.

Joe Thomas Broker Information

The following information was found at the Tennessee Real Estate Commissions web site today http://www.state.tn.us/commerce/boards/trec

Since that may be too small to see, here’s the same info only bigger:

But Is Joe Complying With The Tennessee Real Estate Commissions?

Note that the list of courses Joey has taken stopped in November 2007.  Well, according to the Tennessee Real Estate Commissions web site, there is a continuing education requirement for all Tennessee real estate brokers:

Two years ended a five weeks ago and I see no new 16 hours of continuing education completed by Joey.  Does that mean that Joe Thomas is violating the Tennessee Real Estate Commissions rules?

Maybe.  Maybe he’s taken the required courses and they just haven’t yet been posted by TREC.  Then, again, maybe he hasn’t done the required work.  Either way, we will mention this in our filed complaint and we suggest that you do the same.  If he’s done the work, then no harm no foul.  If he has NOT done the work…well, TREC will find that very interesting.

This is just part of the myriad of rules and regulations that have to be followed to comply with Tennessee Real Estate Law.  Another one, for example is the Vacation Lodging Service License that can be viewed by clicking License.  See Number 9.  It requires ALL having a financial interest in the vacation / lodging company to be listed.  If GGRC owns RML, it might mean that ALL Owners should be listed.  It may also mean that if Joey didn’t do it right, all owners could be possibly liable for his mistakes.

You Are At Increased Risk If Joe Thomas Did Not Disclose What He Should Have When You Bought At Deer Ridge!

Did you, as an owner, buy at Deer Ridge with the understanding that you were AT RISK for running a real estate brokerage company?

What about being AT RISK for operating a property management company?

Neither of these are normal risk factors when you buy a condo.  Operating any small company, particularly in today’s economy, is a very risky venture.  A lot has to go right for most any company to both survive and thrive.  Often, small companies can’t afford to even make payroll and require the owners to kick in even more operating capital just to keep the doors open.  This is especially true with real estate oriented companies.

Well, guess what?

If you own at Deer Ridge, you are not just buying your own condo and having to worry about HOA fees and special assessments for maintenance of the property and whether the property will enjoy SOME level of value appreciation.  Here, with any condo you buy at Deer Ridge, you are saddled with additional risk since you also have to worry about TWO small operating companies – and whether they are making or losing money.

These two companies are RML and Ridge Resort Realty.

And both of these have been soaking up our operating reserves for years as a result of their ridiculously high overhead that all owners, whether they use RML or not, have to pay for out of their own wallets.

Neither of these risk factors were disclosed to me, nor probably to you, when we bought our unit at Deer Ridge from Joe Thomas.

And this lack of major risk disclosure by Joe Thomas will be part of our filed complaint with TREC.

Ridge Resort Realty License Expired!

Interestingly, even if Joe Thomas’ license is still valid in spite of the above, the one thing that our research shows is that the license of Ridge Resort Realty expired in 2002!

It brings into question whether Ridge Resort Realty, which is a part of RML as I recall, can even represent that it is in the “realty” business?

Assuming it can even do this, one thing is clear:  Ridge Resort Realty CANNOT be paid any real estate commissions since its license expired seven years ago.

That Means That Joe Thomas Gets All The Income And We Pay For All The Expenses

That probably means that the only way that RML gets paid any commissions is through Joe Thomas’ license.   This brings up the following issues:

• We have to depend on Joe Thomas honestly reporting all his real estate transactions to RML and the GGRC Board since he is the only one getting the money.  Uh huh.
• Joe Thomas gets the benefits of being in the real estate business, but not having to pay ANY of the overhead or take ANY of the risks associated with owning and operating a company for a profit.  Pretty sweet deal, huh?  I wish I could have had that kind of deal with all of the companies I’ve owned.  That would have certainly lowered some stressful times as the economy cycled.
• Here’s another key issue though:  If Joey, as an individual, is the broker, then how is he paying either Ridge Resort Realty or RML its “portion” of those real estate commissions?  It is a violation of TREC to pay a commission to any non-licensed entity or person.  So, is Joey doing this?  Or, is Joey keeping ALL of the brokerage commissions for himself with us paying all the bills – including for all the expensive full page ads like this one:

Exactly, what ARE the arrangements that the Board has with Joe Thomas when it comes to Ridge Resort Realty and RML?   They won’t talk – and they block OUR rights to get copies of all the books and records that would disclose all of these dealings to the light of day.

Suspicious, huh?

Other Issues That Will Be Included In Our Filed Complaint Against Joe Thomas

It is our understanding from new buyers and prospective buyers that Joe Thomas is not disclosing both parts of the upcoming Asinine Assessment of $353,500 nor is he disclosing our pending lawsuits against GGRC et al.

Both of these actions represent significant funds relative to the purchase prices at Deer Ridge and, if proven true, I believe that TREC will find them a substantive disclosure violation.

Want To File A Complaint Against Joe Thomas?

If you want to file a complaint against Joe Thomas with the Tennessee Real Estate Commissions, you might want to make it VERY easy on yourself.  Just print out this whole blog posting and make it an attachment to your complaint form.  That will probably provide most of the information you want to include.

Besides Deer Ridge owners, this blog seems to have a very high viewership by many in the Gatlinburg area – including a LOT of real estate brokers who are monitoring the happenings here closely.  If you are a real estate agent who has had problems because of Joe Thomas when it came to trying to buy or sell Deer Ridge units for the benefit of your clients, I especially request that you also file a complaint against Joey.

If we can all get past the biased, stranglehold that Joe Thomas has on the buying and selling of units at Deer Ridge,  we should all FINALLY benefit from increasing values for all unit types.

File Your Complaint ASAP

The more of us who file a complaint, the more likely it is that TREC will investigate what has been happening here at Deer Ridge.

Who knows?

Maybe TREC and the FBI will both show up on property the same day – both wanting to chat with Joseph W. Thomas about what has REALLY been happening all these years at Deer Ridge Mountain Resort.

Hot Off The Press

Watch your mail.  You will be getting a copy of the latest diatribe from President Luther Parker – this one regarding the Walkway Railing Alteration.  To read Luther’s letter now, just click Fiasco or check under Documents You Can Download located in the left column of this blog.

Joey and The Board Finally Understand PART of Article XII

Readers of this blog know that I have been pushing hard for the Board and Joey to abide by the rules of the Master Deed and Bylaws.  Readers also know that one part of that push has been with regard to Article XII – which requires, in part, that 75% of all owners have to give PRIOR approval for any alterations or improvements.

The Board APPEARS to finally understand that they cannot do anything they want with our money.  We, the owners, are suppose to have a vote – and the final say.   If the Board had enjoyed this epiphany earlier and had followed this REQUIREMENT as they should have, then we would not have squandered $80,000 of OUR money on Joe’s Folly Pavilion.  Nor, would we have spent another $40,000 PLUS for pool area and office alterations and building additions to the Maintenance Building.

All of these improvements were done illegally – without the 75% vote of the owners – and Joey and the Board have now admitted their GUILT with the request for the vote they just mailed you.

If the Board is requiring the 75% vote for the walkway railing alteration – then why was it not done for the $120,000 of wasted money for the above projects???

The fact that they are NOW requiring this vote for this alteration is clear cut proof that Joey and the past and current Boards are GUILTY of multiple violations of this very Article and should be held accountable AND liable to ALL the owners for their gross incompetence and gross negligence for having already squandered so much of the owners’ money that otherwise could pay for the maintenance that really needs to be done at Deer Ridge Mountain Resort.

I don’t know about you all – but I want my money back – and expect to hold the violators personally financially responsible for their gross incompetence and gross negligence.

(Come on, Luther, give me some credit.  Ha! Fat chance.  It would have been nice to have an acknowledgment from Luther in his letters that I was the one that pushed for them abiding by this Article XII, but I noticed there was no positive acknowledgment in his Board Meeting letter either.  Golly, gee whiz.  But more about THAT letter coming soon.)

The Part About Article XII That Joey and The Board Are STILL Ignoring

The part they are ignoring – is the REST of the Section that Luther Parker refers to:  Master Deed, Page 16, Article XII, number 2.

Part of Number 2 is shown above.  Guess what else is in Number 2?

See the yellow highlight?  What this means is that for EVERY improvement and alteration, TWO votes are required:

• A 75% positive vote by all the all the owners
• AND, a 90% positive vote by all mortgage companies that have mortgages on any and all units at Deer Ridge, based on the total mortgage indebtedness on all units at Deer Ridge!

I am not sure Joey and the Board even know which mortgage companies hold liens in light of all the foreclosures nationwide, especially with all of the consolidation in the industry.  Stories abound in the news about how so many foreclosures are stalled nationwide because mortgages have been sold and resold so many times, that no one is sure who actually even holds the note on many of these properties anymore.

So, finding out who each lender REALLY is, then getting to a person who is really in charge of that loan and willing to vote for anything will be, at best, difficult.

Additionally, Joey and the Board will be tasked with PROVING that they have contacted the right person, got a signed proxy and properly executed estoppel certificate from each legitimate lender, with the proxy signed by a person with proven authority, and produce a full, detailed spreadsheet clearly showing the comprehensive analysis to prove that a positive 90% vote of all mortgagees has been successfully accomplished in full accordance with the yellow highlighted section of Master Deed, Page 16, Article XII, number 2.

I personally believe that, in this economy with the current real estate mortgage disarray, this cannot be done legitimately.

Come on guys.  You have now finally ADMITTED you were GUILTY of doing things so very WRONG all this time in the past.  And, you can’t just do it HALF RIGHT this time.

I, and a lot of other owners, will be watching for the proof you have done it 100% right this time – including getting the necessary mortgagee vote!

Are They Really Waiting For Your Vote?

The talk around the property is that Joey and the Board are not really waiting for your vote.  Scuttlebutt around here is that they have already ordered the parts for some of this work to be done.  The other talk is that they don’t care what Article XII says, they are going to go ahead and do things the way they want to – irrespective of YOUR vote.  Just like they have done so many times in the past.

Vote NO

I strongly recommend you attend the Special Meeting on February 6th and hear what is really going on here at Deer Ridge.  Alternatively, I strongly urge you to vote NO on the ballot you will be receiving.  If you like, you can designate me as your proxy if you would like me to vote on your behalf.  (Be sure and mail or fax me a copy of the proxy you send back to Joey and the Board in case they “forget” about it.)

Reasons to vote NO:

• Firstly, they are asking for another BLANK CHECK!  Luther didn’t even bother to give us a cost estimate of ANY kind directly tied to his vote request!  I don’t know about you, but my wife is the only person who gets a blank check from me!  With Luther’s request for your Vote, there are no written bids, no statement of work, no competitive bidding, no specifications, no nothing to back it up!  The Board must think we are all idiots.  This, by itself, would mean a NO vote from me.
• In spite of what Joe and the Board say, most of the current wood railings are in good shape and do NOT need to be replaced at all.  Hence, leaving what we have would save the owners a ton of wasted money spent on what did not need to be replaced.
• In our beautiful mountain environment, the metal railings do not tie in aesthetically at all with the property as well as the current wood railings do.
• We just spent over $84,000 on walkway repairs in the last couple of years!  We are going to trash all the monies just spent on them???

I Don’t Trust Them

I hereby put Joe and the Board on notice that I will want to see all the cast votes at the meeting, record how each owner voted, see the above proof on all mortgagees – and post that information on the Blog for owner verification.

So, don’t even think of trying to rig the vote.  We will be watching – very carefully.