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Developer alleges racketeering offenses



GENEVA RIDGE MAY SEEK $247 MILLION MORE IN DAMAGES - In the six-page notice of injury and claim, Geneva Ridge states some city of Lake Geneva officials have engaged in racketeering. According to the claim, the racketeering activity of city officials "have the same intent, accomplices and victim. The intent is to inflict economic harm and delay upon the Geneva Ridge, who is the victim, so as to abet an accomplice of the enterprise (the city) in obtaining ownership of the property of Geneva Ridge." The racketeering claims include: - Misconduct in public office - Tampering with public records and notices - Engaged in scheme to defraud, conceal using U.S. mail or wires - False swearing - Perjury - Threats to injure
June 16, 2010 | 09:12 AM
The city's legal problems keep piling up.

Late last week, representatives of Geneva Ridge Joint Venture, also known as Hummel, filed a notice of injury and claim with the city, which is the first step toward initiating a civil action against the municipality.

In the six-page notice, Geneva Ridge claims city officials have engaged in racketeering activity as defined by statutes. They are seeking an additional $247 million in damages, which is twice as much as the damages Geneva Ridge has cited in its federal suit against the city.

The notice claims that racketeering activity, including misconduct in office, tampering with public records and notices, false swearing, perjury and threats to injure, occurred with the intent to "inflict economic harm and delay upon the Geneva Ridge, who is the victim, so as to abet an accomplice of the (city officials) in obtaining ownership of the property of Geneva Ridge."

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The notice lists defendants as current and former public officials Bill Chesen, Todd Krause, Gary Dunham, Mary Jo Fesenmaier, Penelope Roehrer, Arleen Krohn, Tom Spellman, Don Tolar, Frank Marsala, Don Rutkowski, Al Kupsik, Tom Hartz, Matt Kuehl, Dennis Lyon and Marty Smith. These are the same people listed as defendants in the $123 million federal claim. The new claim also names the Friends of Geneva Lake, Inc. and the Vote No Mirbeau-Hummel organization as related to the racketeering.

The notice alleges that some city officials have "associated with, worked with, attended a meeting of, or acted in accord with one or more" of the organizations Friends of Geneva Lake or Vote No Mirbeau. It states that not less than one of the city officials at one separate time or place have attempted to commit or committed a violation of the city's municipal code "by acting with regard to matters in which" the council member "maintained a personal interest."

Geneva Ridge annexed to the city in early 2005 and proposed three different development plans for the property formerly located in Linn Township. None of the plans — including a venture that involved New York-based Mirbeau of Geneva Lake to include a 100-room inn, spa and winery — received final approval from city officials.

Geneva Ridge attorney Lisle Blackbourn said Tuesday that the $247 million monetary figure is based on state statute allowances.

"This gives the city notice of a potential lawsuit," Blackbourn said about the filing.

City Attorney Dan Draper said Monday the notice will be sent to the city's insurance company for further determination.

Some current aldermen said Monday night they spoke with their attorney Joe Wirth, from the firm Piper & Schmidt, about the most recent notice of injury and claim.

On Tuesday, Wirth was unavailable for comment about the notice.

Geneva Ridge already is suing the city in federal court for more than $123 million. Currently, that case is in the discovery process, in which information for last week's notice for alleged racketeering was found.

Blackbourn said Tuesday that the latest notice "wasn't even contemplated" when the court proceedings for the initial federal case was started.

According to the amended complaint on the $123 million suit, the entire case "arises from unlawful conduct by certain city officials who control the local government." It involves a "systematic and ongoing pattern of intentional unequal treatment of Geneva Ridge Joint Venture from others similarly situated without any rational basis. These city officials individually and collectively have abandoned and ignored legal obligations of their elected offices, as well as the rules, regulations and procedures of their own municipal zoning ordinances.

"These individuals are motivated by an illegitimate objective of intentionally inflicting sufficient economic harm and delay upon Geneva Ridge, to cause it to abandon its plans to develop its properties, convert Geneva Ridge into a seller, force a sale of its properties to a 'more desirable developer' and leave the community."

In the amended complaint, Geneva Ridge states the referendum and the treatment of the property during the Smart Growth process as violations of equal protection.

Another claim includes citations to then mayor Chesen's suspensions and effort to charge Spellman, Fesenmaier, Krohn and Roehrer for misconduct and open meetings law violations. The claim states that those involved in Friends of Geneva Lake, Vote No Mirbeau, Lower Density Development and other opponents of the development, Fesenmaier, Roehrer, Spellman, Dunham and other city defendants and Plan Commissioners planned and agreed to retaliate against Geneva Ridge.

In the open records claim for damages, Geneva Ridge cites not only did city officials fail to produce public documents, information was destroyed.

Geneva Ridge also contends that those involved engaged in "a planned and concerted effort to devalue the property and hinder Geneva Ridge's ability to develop it through manipulations of the zoning and planning process, to force a sale of the property at a price substantially below fair market value, all for the benefit of others, has effectively rendered the property valueless to Geneva Ridge."

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