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1. “Wextrust”) [1]* 1, an Illinois limited liability company formed in 2003 with headquarters offices

in Chicago, Illinois, which is currently in receivership. Certain of the said Defendants have been directed and

controlled at various levels by individuals, including persons currently serving extended prison terms for criminal

wrong doing dating to 2005 [2], and other named entities and individuals. These entities and persons have acted

singly and some have conspired through a common enterprise to exploit their control and influence over the said

companies and organizations for personal gain, and engaged in a series of illegal activities, including mortgage

fraud, bank fraud, securities fraud, securities law violations, bank law violations, including common law violations,

some of which constitute predicate acts of racketeering, including wire fraud, mail fraud and misrepresentation, to

obtain the property of the Plaintiffs and others by means of false and fraudulent pretenses in direct violation of law.

2. At its core, this case involves the actions of fraudsters and other co-conspirators, who engineered

what is generally referred to as the massive Wextrust Ponzi scheme, and related bank fraud, securities fraud,

mortgage and wire and mail fraud activities. Also included as participants herein are banks, lawyers, accountants

and other professionals, who aided and abetted the criminal and civil fraud, as well as two banking institutions –

MBFI its bank subsidiary MB Bank, that, acquired certain specified assets and attendant liabilities of Broadway

Bank, following the intervention of federal authorities placing Broadway and Wextrust in receivership and Wextrust

principals behind bars. MBFI and MB Bank and their boards and senior executives deliberately, willfully and

repeatedly turned a blind eye to reports provided by Plaintiffs, and in the case of the Boards failed to perform active

and independent oversight as the law, including Sarbanes –Oxley (15 USC 78f(m)(f) and related sections requiring

enhanced supervision by boards and senior management) specifically requires. Plaintiff provided detailed

information concerning the mortgage and other fraud of Wextrust and Broadway, yet MBFI and MB Bank violated

their fiduciary responsibilities as banking institutions, and over the last seventeen months, have sought to take illegal

advantage of Plaintiffs, through acts of fraud, including the pre-dating, backdating, robosigning, unlawful notarizing

of mortgage and other legal documents, thereby placing MBFI and MB Bank at the very center of the fraud

conspiracy , and making the banks, their boards and senior executives thoroughly complicit in it.

3. Seeking to complete the condo conversion of their Landmark Premises located in the heart of

Manhattan's historic TriBeCa district, Plaintiffs 56W LLC and Guy Morris simply sought to borrow money from

Wextrust, an established financing company that partnered with Broadway Bank in a loan joint venture. If Wextrust

had not presented Wextrust-Broadway joint venture proposal to the Plaintiffs, they would have taken financing

from a competing company offering comparable terms. Under an agreement with Wextrust, Plaintiff 56 W LLC

was to receive $11.3 million in refinancing in the fall of 2007 including $1.2 million to finish construction by

December 2007, permitting 56W LLC to put its four residential condo units on the market in January 2008, and then

close on the units and repay the joint venture loan in its entirety at the 9 month maturity (June 21, 2008). As events

turned out, only some $200,000 was provided in the fall of 2007, the units were not completed on time - and- as a

result of the nation's economic crisis and fall of the real estate market- they currently remain unfinished and unsold.

It was subsequently learned that Wextrust from the very start had no money to lend, had in fact been insolvent

dating to 2005 and was existing day to day on stolen, co-mingled funds generated through a $270 million

international Ponzi fraud. It was also found that Broadway and Wextrust orchestrated a bogus note for debt swap to

mislead bank regulators. As the massive fraud was discovered, Wextrust was sued by the SEC and placed under a

court appointed receiver. Meanwhile, Broadway later failed and was seized by Illinois bank authorities, plasced

under a receiver (the FDIC), and certain of its assets, including Plaintiff's purported mortgage, were sold to MB

Bank at deep discount. When Plaintiffs went to MB Bank to arrange a settlement, the bank willfully turned a blind

eye to the three years of Wextrust-Broadway fraud, and called in lawyers to attempt to foreclose on the invalid

fraudulent mortgage and note, and force the Plaintiffs out of their property. It was then found that in pursuing its

foreclosure claim against 56W LLC, MB Bank, while acting as attorney-in-fact for the FDIC, illegally backdated the

mortgage assignment breaking the chain of title, robo-signed or otherwise irregularly executed and unlawfully

notarized the document and failed to verify the mortgage and note as required under New York law. Additionally,

Plaintiff 56 W LLC has discovered that MB Bank entered into a beneficial transaction with the president of

Broadway Bank, raising serious issues of violation of fiduciary duties, collusion and conspiracy.

4. This action arises out of a continuing pattern of illegal and criminal activities, including “massive”

fraud,[3] involving wire fraud, mail fraud, mortgage fraud and bank fraud and false misrepresentation, securities

*Footnotes are set forth in the Appendix beginning at page 136 after the Exhibits infra.

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and bank law violations, conspiracy, gross negligence and negligent misrepresentation by a group of entities and

persons, acting individually, and in some cases organized in a conspiracy as a common enterprise with Broadway

Bank and Wextrust, an investment company presently in receivership, which was insolvent dating to at least 2005

and has continued in operation by misappropriating and comingling funds raised through an immense, multifaceted

fraud on investors and other victims, including Plaintiffs. Also involved both in aiding and abetting the Ponzi fraud

and compounding the unlawful conduct through a pattern of continuing fraud are MBFI and MB Bank and their

officers and directors.

5. Also included as participants, but not defendants, are a number of other professional firms,

including the law firm of Much Shelist,[4] and other such entities and individuals, some acting under color of state

granted permits and licenses, that aided, assisted, abetted and/or acted together with Wextrust and Broadway, and

conspired against Plaintiffs, using a common or coordinated scheme to defraud and deprive them of profits,

compensation and property.

6. To carry out their conspiracy, such Defendants employed a well-orchestrated enterprise utilizing a

covert plan and campaign of fraud and deceit, involving the fraudulent misrepresentation, manipulation, misuse and

abuse of alleged permits and grants of authority by federal and state governments. Also included in the massive

fraud conspiracy are licensed professionals – lawyers, accountants, other legal and financial advisors- who were

utterly and completely derelict in their fundamental duties, obligations and ethical and legal responsibilities, thereby

knowingly or negligently assisting with and facilitating Wextrust’s extensive, well organized pattern of illegal

activities, including predicate acts, involving massive fraud and false misrepresentation. If any one of these licensed

professionals had conducted proper and required due diligence investigations, they could have discovered and ended

this massive fraud years ago, and Plaintiffs would never become subject to the conspiracy and fraud as described in

this complaint.

7. The causes of action brought include the following: fraud by commission, omission and

nondisclosure, common law conspiracy, breach of contract, negligence, and fraud in the inducement, constructive

fraud, and misrepresentation, mail fraud, mortgage fraud, bank fraud, securities fraud and fraudulent use of interstate

wire communications, professional malpractice, misrepresentation, unfair business practices, intimidation, deceit,

negligent misrepresentation, breach of fiduciary duties, aiding and abetting the Ponzi scheme, negligent infliction of

emotional distress, intentional infliction of emotional distress and abuse of legal process.

8. This is a civil action seeking injunctive relief, monetary relief, including past and ongoing

economic loss, compensatory and punitive damages, disbursements, costs and fees for violations of rights, brought

pursuant to common law and related federal and state law claims. This civil action is brought against certain of the

Defendants for predatory lending activities, mortgage and bank fraud, including unfair, deceptive, or fraudulent

practices during the loan origination and post origination servicing process, and unsafe and unsound banking

practices and violations of law and/or regulations operating a lending institution with management whose policies

and practices are detrimental to and jeopardize the safety of its deposits, and operating without adequate supervision

and direction by the board of directors over the management, so as to prevent unsafe and unsound banking practices

and violations of laws or regulations and violations of fiduciary responsibilities by and Willful Blindness of the

Board of Directors of MB Financial and MB Bank , their senior executives and related defendants.

9. Plaintiffs bring this suit for damages and injunctive relief related to Defendants’ violations of the

federal common law powers of the FDIC, and related banking and securities laws, state laws and other relevant

statutes, including Racketeer Influenced and Corrupt Organizations statute (hereafter "RICO"), 18 USC §§ 1961

through 1968, and the Real estate Settlement Procedure Act (“RESPA”) , 12 USC § 2601, et seq, and other relevant

state and federal statutes to put an end to this systemic, long-standing, and ongoing corruption and illegal actions of

Defendants.

10. The Plaintiffs allege that the Defendants wantonly, recklessly, knowingly, purposefully, willfully and

with malice aforethought, acting individually and in certain cases in conspiracy with others in a common enterprise,

sought to deprive Plaintiffs and did so deprive them, of compensation, profits and property, through a continuing

series of predicate acts involving a pattern of violations of individual legal rights, retaliation, misrepresentation,

misinformation, harassment, abuse and manipulation of laws, rules and regulations, conversion, misappropriation,

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fraud, negligent misrepresentation, breach of fiduciary and professional duties and aiding and abetting a Ponzi

scheme.

11. Due to the said pattern of predicate acts, illegal activities, conspiracy and exploitation by Defendants,

the rights of the Plaintiffs have been systematically abused and they have been intimidated by threats or acts of

economic coercion.

II JURISDICTION

12 .(a)This Court has original jurisdiction pursuant to diversity, 28 U.S.C. §1332.

(b) This Court has federal question jurisdiction (28 U.S.C. § 1331) for wire, mail and related fraud

violations of 18 USC §§ 1964 (RICO Act) and repeated and continuing violations of 12 USC 2614. (RESPA Act).

(c) This Court has supplemental jurisdiction over Plaintiffs’ state law claims pursuant to 28 U.S.C.

1367.

III VENUE

13. Venue is proper in this Court pursuant to 28 U.S.C. §1391 and 18 U.S.C. § 1665 as the

Southern District of New York is the judicial district in which a substantial part of the transactions, events or

omissions giving rise to the claims occurred, and substantially all of property that is the subject of the action is

situated.

IV. THE PARTIES

14. Plaintiff Guy Morris is a natural person of the full age of majority, residing in the State of

Colorado at all times relevant to this Complaint.

15. Plaintiff 56 Walker LLC. (“56 W LLC”) is a limited liability company organized in New York

State, which owns the premises located at 56 Walker Street in New York City. Plaintiff Guy Morris, a citizen of

Colorado, is the sole member and equity interest holder in 56 W LLC .

16. Plaintiff INN is an independent, non-partisan international news network and production company

organized under the New York State Not-for-Profit Law, which produces television and radio news and other

programs from studio facilities located at the 56 Walker Street premises in New York City (“56 Walker Street”), and

leased from 56 W LLC pursuant to an exclusive 20 year term lease. INN programs are regularly transmitted via

satellite and other interstate common carrier facilities to TV and radio stations and cable systems in the United

States.

17. Upon information and belief at all times relevant to this action, Defendant MB Financial Inc.

(“MBFI”) is a financial holding company headquartered in Chicago, incorporated under the laws of the State of

Maryland, with principal office in the state of Illinois and a publicly listed company (NASDAQ: MBFI), which has

expanded over the past several years, primarily through the acquisition of six failed banks, including Broadway

Bank.

18. Upon information and belief at all times relevant to this action, Defendant MB Financial Bank,

National Association, has its principal office in Chicago, Illinois (“MB Bank”), is organized under the laws of the

state of Illinois, is subsidiary of MBFI, and operates 88 banking offices located primarily in the Chicago area.

19. Upon information and belief at all times relevant to this action, Defendant Broadway Bank

(Broadway Bank) was originally formed in 1941 as a Chicago based bank owned by holding company, Broadway

Bancorp, Inc., an Illinois corporation (File No: 65524309), and formerly operated as a locally owned community

bank, and in 2008 reported slightly over $1 billion in assets, specializing in commercial lending. On Friday, April

23, 2010, Broadway Bank was closed by the Illinois Department of Financial and Professional Regulation, Division

of Banking. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver. To protect the

depositors, the FDIC entered into a purchase and assumption agreement with MB Bank, to assume all of the deposits

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and certain of the assets of Broadway Bank. The former Broadway Bank locations were reopened on April 24, 2010

as branches of MB Financial Bank[5]

20. Upon information and belief at all times relevant to this action, Defendant Wextrust Capital, LLC

(Wextrust), an Illinois limited liability company, formed in 2003, with headquarters offices in Chicago, Illinois, is

currently in receivership. According to the company’s former website, it previously operated as a globally

diversified private equity and finance company. In addition to its headquarters in Chicago, the company maintained

offices several cities in the U.S. and foreign countries. [7]

21. Upon information and belief at all times relevant to this action, Defendant Steven Byers ( “Byers”),

a resident of the State of Illinois, in or about 2003 co-founded Wextrust and served as the chairman and chief

executive officer of the company and was chief executive officer of Wextrust Securities LLC. and Wextrust Equity

Partners LLC., and various of its entities.[8]

22. Upon information and belief at all times relevant to this action, Defendant Joseph Shereshevsky

(a/k/a Joseph Heller [9]) (“Shereshevsky”), a resident of the city of Norfolk in the Commonwealth of Virginia, was

formerly Wextrust’s Chief Operating Officer,[10] and owner of 20% of Wextrust through a partnership held in the

name of his wife.[11] Shereshevsky has two prior felony convictions, including one felony fraud conviction. In

1994, he pleaded guilty in this Court to one count of conspiracy to commit bank fraud. [12]

23. Upon information and belief at all times relevant to this action, Defendant Amnon Cohen,[13] a

resident of Nevada, was a co-founder (with Byers) and officer of Wextrust, a principal officer[14], and director of

merchant banking. [15] Defendant Cohen was a member of and/or consultant to various companies[16], in addition

to being a principal and executive of Wextrust. [17]

25. Upon information and belief at all times relevant to this action, Defendant Mitchell Feiger, is a

resident of the state of Illinois and Chief Executive Officer, President, Director and Member of Executive

Committee.

26. Upon information and belief at all times relevant to this action, Defendant Jill York, is a resident of

the state of Illinois and Chief Financial Officer, Principal Accounting Officer, Vice President, Chief Financial

Officer of MB Financial Bank NA, Executive Vice President of MB Financial Bank NA and Director of MB

Financial Bank, N.A.

27. Upon information and belief at all times relevant to this action, Defendant Burton Field, is a resident

of the state of Illinois and Chief Vice President, Chief Executive Officer of MB Financial Bank, President of Lease

Banking -MB Financial Bank and Director of MB Financial Bank, N. A.

28. Upon information and belief at all times relevant to this action, Defendant Larry J. Kallembach,

Chief Information Officer of MB Financial Bank NA, Executive Vice President Operations and Technology - M B

Financial Bank and Director of MB Financial Bank, N. A.

29. Upon information and belief at all times relevant to this action, Defendant Susan G. Peterson, is a

resident of the state of Illinois and Chief Retail Banking Officer of MB Financial Bank NA, Executive Vice

President of MB Financial Bank and Director of MB Financial Bank, N.A.

30. Upon information and belief at all times relevant to this action, Defendant Brian Wildman, is a

resident of the state of Illinois and Chief Executive Vice President of MB Financial Bank, Head of Wealth

Management of MB Financial Bank NA and Director of MB Financial Bank, N.A.

31. Upon information and belief at all times relevant to this action, Defendant Rosemarie Bouman B.S.,

CPA is a resident of the state of Illinois and Chief Vice President, Executive Vice President of Administration of

MB Financial Bank NA and Director of MB Financial Bank, N.A.

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32. Upon information and belief at all times relevant to this action, Defendant Mark A. Heckler is a

resident of the state of Illinois and Chief Executive Vice President of Credit Management - M B Financial Bank and

Director - M B Financial Bank, N.A.

33. Upon information and belief at all times relevant to this action, Defendant Edward F. Milefchik is a

resident of the state of Illinois and Chief Executive Vice President of Commercial Banking - M B Financial Bank

and Director - M B Financial Bank, N.A.

34. Upon information and belief at all times relevant to this action, Defendant Thomas H. Harvey is a

resident of the state of Illinois and Chief MBFI Director, Chairman, Chairman of Executive Committee and

Member of Nominating & Corporate Governance Committee.

35. Upon information and belief at all times relevant to this action, Defendant James N. Hallene is a

resident of the state of Illinois and Chief MBFI Vice Chairman, Chairman of Nominating & Corporate Governance

Committee, Member of Organization & Compensation Committee, Member of Credit Risk Committee and Member

of Executive Committee.

36. Upon information and belief at all times relevant to this action, Defendant Karen J. May is a resident

of the state of Illinois and Chief MBFI Director and Chairman of Organization & Compensation Committee.

37. Upon information and belief at all times relevant to this action, Defendant David P. Bolger is a

resident of the state of Illinois and Chief MBFI Director, Chairman of Credit Risk Committee, Member of

Nominating & Corporate Governance Committee and Member of Compliance & Audit Committee.

38. Upon information and belief at all times relevant to this action, Defendant Charles J. Gries,

B.S.C.,CPA is a resident of the state of Illinois and Chief MBFI Director, Chairman of Compliance & Audit

Committee and Member of Credit Risk Committee .

39. Upon information and belief at all times relevant to this action, Defendant Robert S. Engelman, Jr. is

a resident of the state of Illinois and Chief MBFI. Director and Member of Executive Committee.

40. Upon information and belief at all times relevant to this action, Defendant Patrick Henry is a

resident of the state of Illinois and Chief MBFI Director and Member of Executive Committee.

41. Upon information and belief at all times relevant to this action, Defendant Richard J. Holmstrom is a

resident of the state of Illinois and Chief MBFI Director, Member of Compliance & Audit Committee, Member of

Executive Committee and Member of Organization & Compensation Committee .

42. Upon information and belief at all times relevant to this action, Defendant Ronald D. Santo is a

resident of the state of Illinois and Chief MBFI Chairman and Director of MB Financial Inc.

43. Upon information and belief at all times relevant to this action, Defendant D. Morris is a resident of

the state of Illinois and was a Director of MB Financial Inc.

44. Upon information and belief at all times relevant to this action, Defendant Lawrence Gilford is a

resident of the state of Illinois and Director of MB Bank.

45. Upon information and belief at all times relevant to this action, Defendant Richard Gilford is a

resident of the state of Illinois and was a Director of MB Financial Inc.

46. Upon information and belief at all times relevant to this action, Defendant Kenneth Skopec is a

resident of the state of Illinois and Chief Director of MB Financial Inc.

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47. Upon information and belief at all times relevant to this action, Defendant Margaret DeWoskin is a

resident of the state of Illinois, and former bank officer of Broadway Bank and former First Vice President,

Acquired Assets at MB Bank.

48. Upon information and belief at all times relevant to this action, Doe defendants are particular

professionals, including lawyers and accountants and their firms, who are residents of the State of Illinois and were

retained and/or employed by Defendant Wextrust and other Defendants, whose actions facilitated, intentionally or

through negligence, directly or indirectly, the illegal conspiracy and common enterprise and related illegal activities

that are the subject of this Complaint.

Participants But Not Defendants

49. Upon information and belief at all times relevant to this action, Wextrust Receivership established

on or about August 11, 2008 by order of the U.S. District Court for the Southern District of New York. The

Wextrust Receivership operates under the direction of Receiver Timothy J. Coleman.[18]

50. Upon information and belief at all times relevant to this action, HPC Capital GmbH(“HPC”), and its

subsidiaries and affiliates, including HPC Management LLC (“HPCM”), was an investment company located in

Hamburg, Germany.

51. Upon information and belief at all times relevant to this action, Wexford/HPC Mortgage Fund, LP

(a/k/a and referenced herein as “Wextrust/HPC Mortgage Fund L.P.” ) (“Wexford/HPC”) was an investment

company.

52. Upon information and belief at all times relevant to this action, Much Shelist is a Chicago law firm

that was employed by Wextrust to provide legal counsel and advice with respect to the organization of its business

entities and the sale of ownership interests to investors. After investigation the Receiver determined that the firm

failed to conduct proper due diligence in reviewing the background and status of Wextrust and its principals, and

after learning of derogatory information concerning Wextrust and its COO Shereshevsky, it did not include the

information in regulatory filings. As a result of these failures, the SEC alleged that Much Shelist and in particular

their attorney, Don Hershman, were a cause of Wextrust's violations of the Securities Act. The Receiver and Much

Shelist have entered into a settlement agreement under which the firm assigned insurance coverage of claims valued

at $13 million against the firm. Much Shelist is also representative of 22 additional law firms and accounting firms

that also were employed by Wextrust, Broadway Bank and other Defendants, all of which were responsible for

failures similar to those referenced in this paragraph above. If any of these firms or single professional had refused

to continue to aid and facilitate the Wextrust Ponzi scheme and/or related illegal activities, or reported the

company’s illegal and irregular conduct attention of authorities, the Wextrust conspiracy would have been brought

to an end.

53. Upon information and belief at all times relevant to this action, United States Securities and

Exchange Commission (SEC) is an independent administrative agency of the U.S. Government. The SEC is the

plaintiff in the civil action brought against Wextrust, its subsidiaries and entities and its principals.

54. Upon information and belief at all times relevant to this action, Federal Deposit Insurance

Commission (FDIC) is a United States government corporation created by the Banking Act of 1933 (also known as

the Glass–Steagall Act ), Pub.L. 73-66, 48 Stat. 162, enacted June 16, 1933. It provides deposit insurance, which

guarantees the safety of deposits in member banks. As of November 18, 2010, the FDIC insures deposits at 7,723

institutions. FDIC is the receiver of Broadway Bank.

55. Upon information and belief at all times relevant to this action, Perrine Knight is a resident of the

state of Illinois and formerly served as Vice President of Wextrust.

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V. Facts Relevant To All Counts

56. Upon information and belief at all times relevant to this action, as described in detail herein, this

matter involves mortgage fraud, securities and bank fraud and a pattern of continuing fraud, breach of contract,

negligence, misrepresentation, and related elements constituting an ongoing common enterprise and conspiracy by

Wextrust and the named Defendants. Said Defendants are liable for making false statements or failing to disclose

adverse facts well known to them about the businesses they operated. Defendants’ unlawful schemes and course of

business operated as a fraud or deceit on the Plaintiffs and deceived and damaged them.

Outline of Mortgage Fraud Conspiracy

57. Upon information and belief at all times relevant to this action, key elements of the Ponzi fraud

conspiracy are alleged in the criminal indictment of the Wextrust chief executives as follows:

Defendants Byers, Shereshevsky and their co-conspirators operated a Ponzi scheme, whereby they directed that

material portions of moneys raised from investors for specified properties be diverted for other purposes, including

to fund other, unrelated Wextrust investment projects … As a result, Byers and Shereshevsky, through Wextrust

Capital and its affiliates…were able to close on properties that otherwise could not have been purchased by the

designated closing date; pay distributions to investors in non-producing properties ; and attract additional investor

money by creating the false impression that Wextrust was a profitable business. In reality, as of November 2007,

Wextrust had been operating at a deficit for years. (Criminal Indictment at ¶ 7, emphasis added.)

58. Upon information and belief at all times relevant to this action, Plaintiffs are direct victims of the

above conduct of Wextrust and that of the other Defendants and co-conspirators.

59. Upon information and belief at all times relevant to this action, Defendant Wextrust (which is in

receivership) has represented that it solicited investors through private placement offerings into a variety of

investment vehicles via its affiliated broker dealer, Wextrust Securities LLC, and managed those investments

through other affiliates, including Wexford/ HPC[19], a limited partnership[20], and servicer of a certain joint loan

made pursuant to the Wextrust Commitment Letter dated August 9, 2007, by Wextrust together with co-lender

partner (Broadway Bank) and joint venture partners to this litigation. Wextrustis responsible in damages for its

actions and those of the partnership and other Defendants against Plaintiffs as more fully set forth below.

60. Upon information and belief at all relevant times generally mentioned in the Complaint, Defendant

Wextrust along with Broadway Bank participated in what has been identified as a joint venture with others[21] to

extend loans and other financings to Plaintiffs.

61. Upon information and belief at all times relevant to this action, for the purpose of 18 USC Sec

1962(c) Defendants Wextrust, Broadway Bank, Byers, Shereshevsky, Cohen, and others and certain non-defendants,

organized and operated a finance entity and money lending joint venture [22] as evidenced by a series of over 60

agreements and other documents such as a Loan Subordination, Participation and Servicing Agreement

(“Participation Agreement”)[23] , and as such comprise an association in fact enterprise (the “Enterprise”), within

the meaning of 18 USC Sec 1961(4).

62. Upon information and belief at all times relevant to this action, through the Enterprise, the

Defendants and others conducted, directed and participated in the conduct of the Enterprise’s affairs through pattern

of illegal conduct and a series of predicate acts and racketeering activities, including communications and wire

fraud, as described herein, for the purpose of conducting the unlawful conspiracy and related activities as set forth in

detail in this Complaint.

The Enterprise Loan

63. Upon information and belief at all times relevant to this action, Defendants Wextrust and Broadway

Bank jointly entered mortgage loan, notes, security pledge and related agreements with 56 W LLC (the “Enterprise

Loan”), and in so doing, with malice aforethought, conspired through fraud to induce Plaintiffs 56 W LLC and Guy

Morris to execute a series of purported mortgage documents in connection with the Plaintiffs’ ongoing project to

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construct and convert the top four floors of the landmark building located at 56 Walker Street in New York City,

Borough of Manhattan, Block: 194, Lot: 4 (“Walker Landmark Premises”) into four residential condominiums.

64. Upon information and belief at all times relevant to this action, in or about August 2007, 56 W LLC

and Guy Morris were presented with loan offers to refinance the Walker Landmark Premises conversion project in

the amount of approximately $11 million from two sources: CFA Capital Partners, Inc. (CFA) headquartered in Rye,

New York, and the proposed Enterprise Loan offered by Wextrust.[24]

65. Upon information and belief at all times relevant to this action, Wextrust, presenting itself as a

licensed lending company and acting principally through its New York office executives directed by Defendant

Cohen[25], represented in a Commitment Letter dated August 9, 2007[26] and sent via mail and wire (facsimile and

email) to 56 W LLC and Guy Morris that it would provide Plaintiffs various documents, including a “loan proposal

for consideration” on behalf of itself [27] “and/or its affiliates and assigns” to provide an $11.2 million loan at

annual interest of 13.5%, plus a commitment fee of 3% and broker fees of 2.25% for a 9 month term and pursuant to

a series of terms and conditions set forth in the offering document.

66. Upon information and belief, following submission of the Commitment Letter, Wextrust proceeded

with negotiations with Plaintiffs involving, among others, Defendants Byers and Cohen via subsequent mail,

telephone and facsimile and email communications, submitting various documents, including the Loan Submission

Request, and misrepresented that Wextrust possessed the necessary capital to permit the closing of the Enterprise

Loan immediately, and to fund the completion of the construction of the Walker Landmark Premises.

67. Upon information and belief, based on the representations made by Wextrust and other Defendants,

Plaintiffs elected to accept the Enterprise Loan and reject the CFA loan offer.

68. Upon information and belief, during the period extending from August 20 to September 21, 2007,

Wextrust and Broadway Bank, acting largely through Wextrust executives, including Defendants Byers, Wextrust

principal and CEO [28], and Cohen, Wextrust principal and director of merchant banking [29], represented via mail

and wire communications (telephone, facsimile and email) that the Wextrust companies, together with Broadway

Bank, acting through its president, Demetris Giannoulias, could provide 56 W LLC the necessary capital through the

Enterprise Loan to (1) repay an existing building loan and other existing indebtedness of 56 Walker Street premises,

and (2) supply funding necessary to complete the construction and conversion of the Walker Landmark Premises

specifically in accordance with an agreed upon schedule.[30]

69. Upon information and belief, Defendant Wextrust via its executive office in New York and

Broadway Bank retained Robert Lamar Stack, MAI,MRICS to prepare an appraisal of the Walker Landmark

Premises, which appraisal was delivered on August 28, 2007 and stated as follows:

Completion and implementation of the condominium regime is projected by December 1, 2007 or approximately 3

months after the effective date of appraisal (date of Market Value conclusion). It is also projected that as a

condominium apartment building that marketing and exposure will occur concurrently with construction. Absorption

(sale and closing) of the six individual condominium units is projected within 6 months after completion with 2 units

sold and closed upon completion and the balance (4) sold and closed every three months thereafter. RL Stack

Appraisal, emphasis added

Build Schedule Under Enterprise Loan

70. Under the referenced build schedule agreed upon by the parties to the Enterprise Loan, 56 W LLC

required – and the lenders fully recognized and accepted- that the building construction had to be completed by late

2007 [31] to allow time required to sell the four condominium units by spring 2008. This schedule was designed

specifically by the parties to generate proceeds through the residential condo sales necessary to retire the Enterprise

Loan by its maturity date, June 21, 2008.

71. Upon information and belief, the closing of the Enterprise Loan was delayed as Wextrust reported

that it and certain participating lenders in the loan were experiencing difficulties in securing funds necessary to close

10

the transaction from several of the Wextrust U.S. and foreign funding sources, including, according to reports, at

least one foreign based source in Israel.

72. In entering into the Enterprise Loan with Wextrust and other participating entities, including

Broadway Bank, it was necessary for 56 W LLC to incur significant costs, including interest reserve, finance finder

fees, attorney charges, filing and financing fees, taxes, etc., totaling over $ 2.5 million.

73. Based on the requirements of 56 W LLC, Wextrust and the participating entities, including

Broadway Bank, established the maturity date of the Enterprise Loan for June 21, 2008, a nine month term that was

specifically set to allow necessary time for completion of construction and sale of the four condominium units prior

to the maturity date of the Enterprise Loan.

74. Wextrust entered into the Enterprise joint venture loan with Defendant Broadway Bank and others by

executing various purported agreements, including mortgage loan agreements and notes, Loan Subordination,

Participation and Servicing Agreement dated as of September 21, 2007 (the “Participation Agreement”), and other

such legal documents, in or about August 2007 (“Enterprise Agreements”).

75. Pursuant to the Enterprise Agreements, Defendant Broadway Bank purported to loan $8,000,000 to

refinance the existing mortgage debt on Walker Landmark Premises.

76. Pursuant to the Enterprise Agreements, Wextrust and others purported to loan funds ($1.2 million)

to 56 W LLC to finance the final stage of the reconstruction and condominium conversion of the Walker Landmark

Premises.

77. Pursuant to the Enterprise Agreements, Wextrust and others purported to loan funds ($2.1 million)

to 56 W LLC to finance pre-paid interest charges and legal, recording and other closing and financing costs related

to the condominium conversion of the Walker Landmark Premises. Evidence shows that Wextrust lacked its own

funds, and diverted joint venture funds to pay interest owing to Broadway Bank under the Enterprise Loan.

The Fraudulent Bank Note for Debt Swap

78. Upon information and belief, Plaintiffs have come to learn that at the same time they were

negotiating the Enterprise Agreements with Wextrust, Broadway Bank organized a parallel transaction with

Wextrust.

79. Upon information and belief, another Broadway Bank loan involving a hotel in Atlantic City

(“Boardwalk Loan”) had defaulted, and the bank wanted to remove the default transaction from its accounting

records before an impending audit by bank examiners.

80. Upon information and belief, the Boardwalk Loan transaction arrived at involved Wextrust purchasing

the defaulted Boardwalk Loan for a $5.125 million promissory note plus $93,000 cash, which permitted Broadway

Bank to remove the defaulted loan from its records. (The details of the note for debt swap were outlined in an

opinion by Judge Denny Chin on December 3, 2009 in SEC v. Byers (See Wextrust Creditor documents: Doc. 579,

page 11 (http://www.wextrustreceiver.com/documents/ court_ papers/Wextrust%20 Claims%20 Opinion.pdf )).

81. Upon information and belief, investigation by the SEC and Wextrust Receiver confirmed that at the

time of the Boardwalk Loan transaction (and for two years before), Wextrust was insolvent and existing day to day

on the proceeds from the company’s Ponzi scheme. An accurate accounting would have shown Wextrust to be

millions of dollars in debt at the time of the loan for debt swap transaction and the Enterprise Loan to 56 W LLC.

The security Wextrust gave to Broadway was obtained by fraud and thus valueless, and the note for debt swap

transaction was based on fraud and was undertaken to defraud bank regulators.

82. Upon information and belief, but for the fraudulent loan for note swap, which benefited and

maintained the credit status of Broadway Bank, Wextrust and the bank would not have been in a position to extend

11

the joint Enterprise Loan to 56 W LLC, leaving Plaintiffs free to enter the alternate loan, which was immediately

available at the time the Wextrust-Broadway transaction closed.

83. Upon information and belief, Wextrust inter-company emails obtained by Plaintiffs reveal the direct

relationship between the note for debt swap and the 56 W LLC financing. This is shown in an email accessed by

Plaintiffs exchanged between Defendants Byers and Cohen dated September 27, 2007, less than a week after the

closing of the Enterprise Loan, under the title “56 Walker Financing”:

From Amnon Cohen Date: September 27,2007 3.01 p

To: Steven Byers Re: 56 Walker Funding

Steve u are SO wrong. This is a deal that Demetris [ Giannoulias, President of Broadway Bank] loved. He doesn't

want report the delinquency to the fed. He loves for buying his portion out and he will give you money [for the 56W

transaction].

From Amnon Cohen Date: September 27,2007 3.06 p

To: Steven Byers Re: 56 Walker Funding

Demetris has known about this for a month and he is cool with it. He agreed to come talk to us despite this [other]

default.

Failure to Fund 56 W LLC Pursuant to Enterprise Loan

84. Upon information and belief, through their review of company emails, Plaintiffs have also come to

learn that serious financial problems experienced by Wextrust, including unavailability of so-called “take out”

financing by banks due to the nationwide worsening economic conditions and defaults, arose prior to the closing of

the Enterprise Loan, that required certain other loan agreements between Wextrust and Broadway Bank to be

executed as part of the Enterprise Loan.

85. Upon information and belief, these changed conditions were referenced in the email exchange

between Defendants Byers and Cohen dated September 27, 2007:

From Amnon Cohen Date: September 27,2007 312 p

To: Steven Byers Re: 56 Walker Funding

This has nothing to do with underwriting. This deal is solid. There is $5,000,000 of cash equity in this deal.

Unfortunately, we underwrote the take out loans which is very difficult right now due to the lack of bank liquidity

From :Amnon Cohen Date: September 27,2007 3.56 p

To: Steven Byers Re: 56 Walker Funding

Before the liquidity crunch this was a great deal . Guy [Morris] needed to close quickly, he paid us juice. Takeout

was a no brainer. Unfortunately, takeout is an issue banks are not funding .

From Steven Byers Date: September 27,2007 3.58 p

To: Amnon Cohen Re: 56 Walker Funding

This Broadway deal has just fxxxx [expletive deleted] us. You can kiss goodbye any loan for working capital or

anything else. This is why we have to do so much tuffer (sic) on underwriting.

From Amnon Cohen Date: September 27,2007 4.02 p

To: Steven Byers Re: 56 Walker Funding

So how did you leave it with him [Demetris Giannoulias, president of Broadway bank].

12

From Steven Byers Date: September 27,2007 4.08 p

To: Amnon Cohen Re: 56 Walker Funding

They want me to sign the document on the Broadway loan tomorrow and I have to get together with them next week

to go over the collateral because based on what he told me he will be conservative.

From Amnon Cohen Date: September 27,2007 4.56 p

To: Steven Byers Re: 56 Walker Funding

They're willing to lend us the entire amount.

To: Amnon Cohen Date: September 27,2007 4.57 p

From Steven Byers Re: 56 Walker Funding

OK but we have to borrow money from Broadway to pay off Broadway on their first, because the guy is in default

and will not pay the fee or sign an extension. This is underwriting borrower risk and maturity time. I just met with

Broadway. I doubt if we are going to get much in the form of a line from them for working capital or high yield fund

replacement, unless I can give a first mortgage or very conservative second until some of these other loan payoffs

(sic) and now especially with this defaulted loan that we have to take on .

From Steven Byers Date: September 27,2007 5.08 p

To: Amnon Cohen Re: 56 Walker Funding

I know that but now we are responsible for the interest payments on 5 million . That doesn't bother you?? At a time

when we need liquidity and need to borrow more money from them??

From Amnon Cohen Date: September 27, 2007

To: Steven Byers Re: 56 Walker Funding

I understand that. Sure it bothers me. Trust me a[sic] call the broker every day. I’m meeting with the casino

developer next door who lost out on this deal to maybe buy our note. Had I known in May that the banks are not

refinancing I would not have done this loan . I told my loan officers no more land deals there is no take out. I'm

working on it. Wextrust company emails, emphasis added; expletive deleted.

79. Upon information and belief , Plaintiffs have also learned that the Enterprise Loan was not actually

funded at the 56W LLC Closing as reflected in the following email exchange between Cohen and Perrine E. Knight,

former Wextrust Vice President Operations.

From Amnon Cohen September 27,2007 3.11 p

To: Perri Knight Re: 56 walker funding

Yes, Broadway fund[ed] $8,000,000 HPC funded half $1,308,000 plus 50% of two months interest to Broadway.

Joe[Shereshevsky] sent me $375,000.00 and I gave him $364,000.00 (and change) from the Delli's closing.

From Perri Knight Date: Sept 27, 2007 3.52

To: Amnon Cohen, Sheri Gabriel, Tom Pugliese, Katherine Thompson Subject: 56 walker funding

I'd hope to help Adriana get his loan on the system yesterday but there is some confusion on how the funding to

place please confirm /comment on the following:

1. I understand we used proceeds from John Delli's to fund its loan. I need to know that exact amount so I can

credit the Delli's loan.

13

2. From what I have been able to piece together, we funded $1,908,871.00 I need confirmation of this since it

came from multiple sources.

3. If #2 is correct then we have not funded the loan or interest reserve. Ordinarily when I close, I request these

funds as well so they can be kept in a segregated account and used to pay distributions as they are earned. Steve has

confirmed he wants it done this way. So, whenever the cash is available, we will need an additional 1476,563 funded

for this purpose.

4. We have received the first draw request for this deal totaling $34,268.87. We have not funded it from Chicago.

Tom P.[Pugliese] thought it may have been funded from Norfolk . If this draw has been funded please send all

paperwork -- wire or check copies to Andrea asap. Also if it has not, please advise where we should find it from.

5. We received $722,345.83 from HP C where did that number, from? I am unable to determine what percentage

of what they are participating in.

Wextrust company emails, emphasis added.

80. Upon information and belief , Plaintiffs agreed to the Enterprise Loan under the express

understanding and agreement that the funding would be provided under the specific time schedule set to assure that

the final stage of the construction of the condo conversion would be completed by late November-December 2007.

81. Upon information and belief , through October 2007, Wextrust provided 56 W LLC only

$104,112.00 of the budgeted $1.2 million required to complete construction.

82. Upon information and belief, Plaintiffs have now learned from Wextrust company emails that

Defendants did not have sufficient monies to meet the October draw as reflected in the following communication:

From Perri Knight Date: Oct. 16, 2007 5.48p

To: Amnon Cohen; Steve Byers; Tom Coorsh; Joseph Shereshevsky; Sheran Gabriel Subject: 56 walker funding

cc: Tom Pugliese

I have received the first invoice from Broadway Bank for the leverage on this deal. The amount due is $68,333.33 .

We also have a draw request for $104,112.00 that we need to fund tomorrow. The total funding needed is

$172,445.33. We have requested the 50% from H P C leaving our obligation of $120,389.33 .

Additionally my questions [in ¶ 79 supra] have not been addressed. Please let me know when we can expect this

funding so we can avoid the late charge to Broadway bank. As and (sic) aside, because we used loan proceeds from

another payoff which we paid out to HPC per Amnon, our account cannot pay distributions or future draws or

accrued interest and fee income to ourselves.

Wextrust company emails, emphasis added

83. Upon information and belief, through November 2007, Wextrust provided 56 W LLC only

$231,757 of the budgeted $1.2 million required to complete construction .

84. Upon information and belief , throughout October and November 2007, Plaintiffs sought the

cooperation of Wextrust and the other parties to the Enterprise Loan to provide monies included under the budgeted

$1.2 million in final stage financing.

85. Upon information and belief, Plaintiffs submitted an invoice for December 2007, which was not paid

by Wextrust in a timely manner as required.

86. Upon information and belief, according to information provided to Plaintiffs, when it was submitted,

Defendant Cohen stated that he did not wish to pay the December invoice, and asked his Wextrust staff to find a

reason supporting his decision to refuse the payment request.

Wextrust Insolvency

87. Upon information and belief, according to forensic audits and related information obtained by the

SEC, Department of Justice and the Receiver, Wextrust was insolvent and unable to meet its own operating

expenses as an ongoing concern dating to 2005, and from that time, the company was able to operate only through

14

use of misappropriated, misdirected, comingled funds raised from investors and illegally “borrowed” from company

transactions, including the Enterprise Loan and others, and such facts were actually known or should have been

known by certain of the Defendants that provided legal and accounting services to Wextrust and the Wextrust

entities.

88. Upon information and belief, in its civil Complaint, the SEC included the following intercompany

email to Defendant Amnon Cohen, Wextrust principal, from Defendant Shereshevsky, Wextrust COO, dated

November 15, 2007 (the very same time money was withheld from 56 Walker LLC):

We are in debt and I am working diligently to get us out of it. Go ahead and do a forensic audit. It will show that we

spend about 1,000,000 more a month than we make, for the last 3 years, especially the last 19 months. (SEC

Complaint ¶ 68, emphasis added)

89. Upon information and belief, beginning prior to sending the Wextrust Commitment Letter and

subsequently entering into the Enterprise Loan and continuing thereafter, Defendants Wextrust, Byers,

Shereshevsky, Cohen, and others deliberately failed to provide Plaintiffs 56 W LLC and Guy Morris with any

information concerning the dire financial condition of the Wextrust companies and their inability to meet regular

expenses as they were incurred, except through use of misappropriated, misdirected, comingled funds raised from

investors and illegally “borrowed” from other company transactions.

90. Upon information and belief, the inability and intentional failure of Defendants Wextrust, Byers,

Cohen, and others to provide Plaintiffs the construction monies necessary to complete construction in accordance

with the agreed to time schedule, was a significant factor contributing to stoppage of substantially all construction at

the 56 Walker Street site.

91. Upon information and belief, the inability and intentional failure of Wextrust, Byers, Cohen, and

others to provide 56 W LLC the construction monies necessary to complete construction by late 2007 made it

impossible to market the four condominiums in winter-spring 2008 as projected pursuant to the agreed upon

construction and completion schedule under the Enterprise Loan.

92. Upon information and belief, the inability and intentional failure of Wextrust, Buyers, Cohen and

others to provide 56 W LLC the construction monies necessary to complete construction by late 2007 resulted in the

inability of 56 W LLC to retire the loan on the maturity date of the Enterprise Loan (i.e., June 21, 2008).

93. Upon information and belief, throughout the period January through July 2008, Plaintiffs sought

unsuccessfully to have Wextrust provide the full balance of the $1.2 construction budget.

94. Upon information and belief, during the September 2007 through July 2008 period when Wextrust,

Byers, Cohen and others refused to pay the construction moneys in accordance with the requirements of the

Enterprise Loan, the U.S. Department of Justice and the SEC were investigating the operations of Wextrust through

informants and other sources, and preparing to seek a court order to place the company in receivership.[32]

SEC Investigation of Wextrust

95. Upon information and belief, the court appointed Receiver determined that information concerning

current and past illegal conduct of Wextrust and its management was available in the fall of 2007. As early as

September 2007, certain Wextrust investors filed a lawsuit against the company for fraud in connection with a major

underwriting (the IDEX funding), which raised $30 million. In addition, it has been learned that another investor

lawsuit for fraud was filed against Wextrust in November 2007. This information was also available to state and

federal regulators, including the SEC. [33]

96. Upon information and belief, Plaintiffs have learned from sources that during the period January

through July 2008, as the SEC investigation continued, Wextrust’s finances became severely constricted, causing

disruptions in its operations, including budget cut backs and staff downsizing.

15

97. Upon information and belief, in addition, during the same September through July 2008 period

according to press reports, Defendant Cohen, operating as an informant, participated in meetings with the SEC and

others to outline the illegal activities of Wextrust and its executives.

SEC Seizure of Wextrust

98. Upon information and belief, on August 1, 2008, Wachovia Bank froze several of Wextrust's

accounts in response to a Justice Department notice. (See http://greedybastards club.blogspot.com/search?q=heller)

99. Upon information and belief, according to press reports, on August 11, 2008, the FBI apprehended

Defendant Shereshevsky, who was preparing to leave that day for Israel and England. (See http://greedybastards

club.blogspot.com/search?q=heller)

100. Upon information and belief, 56 W LLC learned sometime after August 11, 2008 that the U.S.

Securities and Exchange Commission (SEC) had filed suit in the United States District Court for the Southern

District of New York (SDNY) against Defendant Wextrust (SEC v. Steven Byers, 08-CV-7104 (DC)), (“SEC

Complaint”), and its principals, Byers and Shereshevsky.

SEC Complaint Against Wextrust and its Principals

101. Upon information and belief, the SEC Complaint alleges that Wextrust and its executives,

including Defendants Byers and Shereshevsky, had fraudulently raised money in a series of securities offerings and

comingled and misappropriated funds.

102. Upon information and belief, according to the SEC Complaint Defendants Byers, Shereshevsky

and others, using mail and wire facilities, purportedly obtained funds from investors for a particular Wextrust

project, but constituted fraud in that the company failed to disclose that funds being invested were actually being

used to pay prior investors and operating costs in unrelated offerings via an illegal practice commonly known as “a

Ponzi scheme,” which had the purpose and effect of cheating investors and Plaintiffs.

103. Upon information and belief, in its civil lawsuit against Wextrust, the SEC sought emergency

relief through the appointment of a Receiver to halt ongoing fraudulent securities offerings by Wextrust, and to take

immediate control of the company.

104. Upon information and belief, the emergency Wextrust Receivership continues to operate pursuant

to the SDNY court order.

105. Upon information and belief, the SEC Complaint against Wextrust alleged that over a period of

years, the firm raised at least $255 million from about 1,200 investors in the U.S. and abroad. Subsequent

investigation by the SEC determined that Wextrust Capital and its principals raised over $270 million from

approximately 1400 investors throughout the U.S. and foreign countries. Dating from the formation of Wextrust

Securities in 2005, Wextrust Capital and its principals conducted approximately 70 of private placement offerings

and created approximately 150 entities in the form of limited liability companies or similar entities for these

offerings. (See Hershman Order, ¶ 6.)

106. Upon information and belief, Court papers filed by the SEC and a continuing series of press

reports have revealed that Wextrust dating to 2005 was misappropriating proceeds from its capital raises to pay its

ongoing operating expenses, past due obligations, including interest payments to investors, commingling and

misappropriating funds from private placement transactions, and incurring operating cash losses of over $ 1 million

per month[34] for over 18 months.

107. Upon information and belief, the SEC alleged in its Complaint that Wextrust fraudulently raised

money and commingled, misdirected and misappropriated funds in contravention of specific representations set

forth in various private placement memoranda, that stated that investor funds would be used for specific investments

in real estate or other assets identified in offering memoranda.

16

108. Upon information and belief, subsequent investigation by the SEC established that beginning as

early as 2005, at least one of the outside consulting firms employed by Wextrust, viz., Much, Shelist, a law firm in

Chicago, determined that factual statements included in certain private placement securities offerings of the

company (in particular, the “IDEX Offering”) were not supported by confirming documentation. (see Hershman

Order, ¶12) The referenced attorneys also learned that Wextrust had illegally raised – “over-raised”- some $7

million, using the IDEX private placement offering documents for the purpose of raising $30 million, rather than

$23 million. Id.[35]

109. Upon information and belief, , the SEC Complaint referencing seized company documents also

states that an internal Wextrust combined “balance sheet” showed that as of December 31, 2007, Wextrust directly

and through various affiliates “borrowed” at least $74 million from its own companies, and also “lent” at least $54

million to other such entities.[36]

110. Upon information and belief, one Internet press report summarizes the Wextrust scheme as

follows:

All together, the SEC alleges that WexTrust Capital conducted at least 60 private placement offerings and

created approximately 150 entities in the form of limited liability companies or similar vehicles.

Throughout the process, the SEC alleges, Wextrust Capital partners didn’t disclose material information,

never purchased properties it promised to investors and paid themselves profitably. WexTrust Capital

allegedly committed a litany of violations of U.S. Securities laws. See:

http://www.zamansky.com/blog/2008/08/wextrust-capital-joseph-shereshevsky.html

111. Upon information and belief, the SEC Complaint outlines the Wextrust fraud as follows:

Defendants have been fraudulently raising money in the various offerings, each of which purportedly is for a

particular investment, without disclosing that funds raised were actually being used to pay prior investors in

unrelated offerings and to make unauthorized payments to fund the operations of the Wextrust Entities, which were

operating at a deficit. (SEC Complaint ¶3)

112. Upon information and belief, the SEC Complaint also includes the following excerpt from a seized

company email dated November 16, 2007 from a party identified as “[Wextrust] Partner A,” which reflected the

severe financial problems faced by Wextrust and the efforts taken to keep it afloat:

You raised $9,000,000 from investors for GSA i.e. properties that never existed phony PPMs, etc. . . . Guys

from enron got 20 years for doing that . . . You co-mingled (sic) funds over 100 times. Wiring high yield

(another offering) funds for payroll, Africa, etc. is a crime. (SEC Complaint, ¶37, emphasis added)

113. Upon information and belief, in subsequent press reports, it was revealed that unidentified “Partner

A” referenced in the SEC Complaint was in fact Defendant Cohen, the Wextrust principal in charge of the

Enterprise Loan to Plaintiff 56 W LLC.[37]

114. Upon information and belief, even though attorneys employed by Wextrust knew at least by fall

2007, but likely earlier, that Shereshevsky had misled them with respect to his prior convictions and that he was a

convicted felon, they continued to work for Wextrust assisting the company to raise some $7.5 million from

investors. None of the private placement memoranda drafted by the attorneys disclosed Shereshevsky’s prior

criminal record, or the significant over raises that had been carried out by the company. The attorneys also knew or

should have known that Shereshevsky – a convicted criminal –had control of all of the Wextrust finances, and that

he, and not the CFO, exercised complete control over all of the company’s operating accounts. (Hershman Order, ¶

21.)[38]

115. Upon information and belief, at the time the November 16, 2007 intercompany email outlining

Wextrust’s dire financial condition was being circulated by Defendant Cohen, referencing the lack of operating

funds, he was also refusing to pay the $1 million balance of the construction monies due to Plaintiffs to complete the

Walker Landmark Premises condo construction in accordance with the agreed upon schedule. [39]

17

116. Upon information and belief, additional evidence[40] cited in the SEC Complaint and other

sources reflects the cash flow problems confronting Wextrust during the period starting with the signing of the

Enterprise Loan Agreement with 56 W LLC, and extending forward through late 2007:

Wextrust emails reveal that it made improper transfers of funds almost immediately after the August 2007

offering had commenced. In an October 9, 2007 email, Shereshevsky instructed various Wextrust employees that

all funds for the Crowne-Phoenix offering [a Wextrust capital raising venture] be deposited directly into

Wextrust’s house account at Wachovia bank in Virginia. As recorded in a November 20, 2007 email from

Wextrust’s accounting department,(1) in October and November 2007, Crowne-Phoenix “loaned” Wextrust

$650,000 to fund payroll needs; (2) in October and November 2007, Crowne-Phoenix “loaned” Wextrust

approximately $1 million “to fund partial distribution check funding;” and (3) in October 2007, Crowne-Phoenix

“loaned” Wextrust $600,000 to fund or loan moneys to two other private placement entities, Guaranteed

Depository Receipt Fund (“GDR”) and Pure Africa Minerals LLC (“PAM”). SEC Complaint , ¶ 43

117. Upon information and belief, based on the SEC evidence, what funds that did reach Plaintiffs in

fall 2007 as paid by Wextrust via wire (telefax, phone and email) could only have been drawn from various

comingled sources, obtained illegally and misdirected and misappropriated.

118. Upon information and belief, Wextrust’s cash flow problems continued beyond late 2007, as

reflected in the following excerpt from the SEC Complaint.

In an April 11, 2008 email to Byers [Steven Byers, age 46, is a resident of Oakbrook, Illinois and owns

sixty percent of Wextrust; the Chairman of Wextrust and President and Chief Operating Officer of WEP,

the arm of Wextrust focusing on income-producing properties, and is also an owner or controlling person of

Wextrust Securities], Shereshevsky requests a short telephone conversation to discuss certain agenda items,

one of which is “Ideas for cash to survive until I finish this underwriting [sic].” Later that same day,

Shereshevsky sends a “follow up” email to Byers, stating, “We have to do some old fashion over raising,

raise for the GDR [Guaranteed Depository Receipt Fund] and High Yield (on shore) [another LLC entity]

to get through these months.” SEC Complaint ¶ 80.

119. Upon information and belief, further evidence of Wextrust’s serious cash flow problems and

illegal money transfers among accounts is reflected in the SEC allegations as follows:

Beyer’s view that over-raising translates into “profits” is set out in a previous email to

Shereshevsky on March 12, 2008, in which he states:

Also, a big part of what we do is make money, profit, by raising more than the minimum that is required.

Yes, it needs to be in reason but we have to have the ability to do this. We must determine with our

accountants how we book and treat this and [the then-current CFO] can either get in line or get out of the

way.

Not surprisingly, the CFO referred to in the email has since resigned. (SEC Complaint ¶ 81)

Wextrust Fraudulent Organization and Transactions

120. Upon information and belief, based on his extensive investigation of Wextrust, the Receiver

determined that Wextrust fraudulently commingled the money it raised for its alleged series of fake limited-liability

companies and entities, misdirected the funds and fraudulently misappropriated the monies, using wire facilities to

facilitate and complete the illegal transfers.[41]

121. Upon information and belief, the Receiver has reported: "These [Wextrust Entities] were simply

shell companies. They did not keep separate books and records.” [42]

122. Upon information and belief, as the Receivership proceedings progressed over the last thirty seven

months, Plaintiffs have ascertained that they have been victims of Wextrust’s continuing scheme of fraud and

18

conspiracy, facilitated by Broadway Bank, and the other Defendants, who participated in the Enterprise Loan, as

they, among other things, denied 56 W LLC access to capital for the construction of the Walker Landmark

Premises, thereby delaying completion of the condo units, and costing Plaintiffs millions in damages, and

recklessly endangering its economic interest in the building.

123. Upon information and belief, sometime after August 24, 2008, 56 W LLC secured a copy of a

previously Sealed Criminal Complaint filed by the US Department of Justice against the two principal executives of

Wextrust (Defendants Byers and Shereshevsky), charging them with securities fraud in violation of 18 U.S.C. §

371, i.e. using deceit in connection with the purchase and sale of securities.

124. Upon information and belief, in August 2008, both Byers and Shereshevsky were arrested by

federal authorities, and each subsequently pleaded guilty to one count each of conspiracy to commit mail fraud, wire

fraud and securities fraud.

125. Upon information and belief, the SEC has determined that both Byers and Shereshevsky, as

Wextrust principals, had been engaged in the ongoing criminal enterprise dating back to at least 2005.

126. Upon information and belief, the SEC also determined that Wextrust has been insolvent dating to

at least 2005.

127. Upon information and belief, 56 W LLC has determined that Wextrust, which maintained a

substantial and lavish suite of offices at 114 West 47th

Street in New York City and conducted extensive business

dealings extending loans and conducting other financings over a period of years from that location, was not

registered to conduct business in New York State by either the Department of State or the New York State Banking

Department.[43] This information should have been revealed through due diligence investigations of Wextrust by

its joint venture partners, including Broadway Bank .

128. Upon information and belief, 56 W LLC has ascertained that Wextrust and related entities,

including its former Wexford entities,[44] were not registered to conduct business in New York State by either the

Department of State or the New York State Banking Department.[45]

129. Upon information and belief, additionally, Wextrust and Broadway Bank both maintained their

headquarters offices in Chicago within blocks of each other: Wextrust at 333 West Wacker Drive and Broadway

Bank at 5960 North Broadway.

130. Upon information and belief, at least one of the Wextrust principals, Defendant Shereshevsky,

was arrested in March 1993, Shereshevsky for, among other things, bank fraud and in June 2003, pleaded guilty in

the Southern District of New York to one felony count of conspiracy to commit bank fraud and remained in custody

until 2006. These facts that were known to or could and should have been discovered by all Defendants, including

Broadway Bank and the Doe Defendants, that provided legal and financial consulting services to the Enterprise

Loan partners, through proper and basic due diligence investigation.

History of Dealings Between Wextrust and Broadway Bank

131. Upon information and belief, based on information obtained by the Plaintiffs, it has been

ascertained that in addition to the Enterprise Loan to 56 W LLC, Broadway Bank participated in other joint loan

transactions with Wextrust including the following:

a. Boardwalk & Lincoln LLC Loan (“Boardwalk Loan”)-

Broadway Bank and Wexford/HPC Mortgage Fund L.P. and Wexford High Yield Debt Fund, III, LLC

entered into a Participation Agreement, dated May 25, 2005, relating to a loan made to Boardwalk &

Lincoln LLC in the aggregate amount of $7,750,000. Wexford High Yield Debt Fund, III, LLC purchased

Broadway Bank’s participation in the loan and Participation Agreement. Broadway Bank loaned Wexford

High Yield Debt Fund, III, LLC the sum of $5,125,000 for purchase of Broadway Bank’s loan and loan

documents.

19

b. Dean At Boerum Hill, LLC Loan -

On July 15, 2005, Plaintiff loaned the aggregate sum of $11,500,000 to Dean At Boerum Hill, LLC

pursuant to an Acquisition Loan Agreement, Acquisition Loan Agreement and Building Loan Agreement,

all of which were secured by respective Notes and Mortgages, for financing and construction of property

located on Dean Street, in Brooklyn, New York. These loans and notes were guaranteed by Amnon Cohen,

ReCal Partners at Dean LLC, Michael Zenobio, Jr. and Steven Byers. Upon information and belief,

WexTrust Capital is associated with and/or is a member of ReCal Partners At Dean LLC.

c. West 82nd

Street Holdings, LLC, Loan-

On November 16, 2006, Plaintiff loaned the sum of $8,000,000 to West 82nd

Street Holdings, LLC, West

82nd

Street Investors, LLC , West 82nd

Street Managers, LLC, Wextrust Equity Partners LLC Amnon

Cohen and Steven Byers for financing of property known as 176-178-180-182 West 82nd

Street, New York,

New York. The loan was secured by a note and mortgage agreement.

d. West 82nd

Street Holdings, LLC, Supplemental Loan –

On October 17, 2007, Plaintiff loaned an additional sum of $3,000,000 to the above referenced borrowers

secured by a Junior Promissory Note and Junior Mortgage.

e. West 82nd

Street Holdings, LLC, Supplemental Loan 2-

On December 13, 2007, Plaintiff loaned an additional sum of $1,631,652.76 to the above referenced

borrowers secured by a Junior Note and Junior Mortgage.

Actions of Broadway Bank and Other Defendants Aided Wextrust Fraud

132. Upon information and belief, 56 W LLC has been the victim of an ongoing series of illegal

activities by the Defendants, including Wextrust and associated individuals, entities and Enterprise participants, and

supported, assisted and facilitated by other entities and individuals, including Broadway Bank and certain of the

Defendants and Doe Defendants, which have acted in conspiracy and been engaged in a range of interrelated,

concerted illegal activities- including criminal acts- that have endangered Plaintiffs’ valuable property holdings and

caused them significant damages.

133. Upon information and belief, 56 W LLC has been the victim of the ongoing illegal conduct by

Broadway Bank, which together with Wextrust has been engaged in a range of interrelated, concerted illegal

activities that have endangered Plaintiffs’ property holdings and caused significant damages.

134. Upon information and belief, it has been established by the SEC that Wextrust was insolvent

dating to 2005. But rather than terminating operations, it continued in business together with and facilitated by

others, including the Enterprise members, Broadway Bank and the Defendants and Doe Defendants, and used funds

derived from its illegal Ponzi scheme and other transactions, thereby making 56 W LLC and others direct victims of

this illegal and in certain cases criminal conduct.

135. Upon information and belief, but for using the illegal, comingled proceeds of its fraudulent Ponzi

Scheme and other transactions, Wextrust could not and would not have been in a position to organize the Enterprise

and extend the Enterprise Loan (together with other lenders, including Broadway Bank ) to 56 W LLC, thereby

purposely and recklessly endangering Plaintiffs’ investment and interest in the Walker Landmark Premises, and

causing them significant damages which continue to the present.

136. Upon information and belief, in conceiving, organizing and executing the Enterprise Loan joint

venture financing transaction, Wextrust, acting together with Broadway Bank and the other Defendants, including

the Doe Defendants, purposely conspired with malice aforethought to defraud Plaintiffs by, among other things,

inducing Plaintiffs 56 W LLC and Guy Morris to enter the fraudulent loan transaction, charging them interest on

interest and exorbitant fees and costs, generating additional fees and costs by improperly withholding construction

funds, and arbitrarily raising administrative impediments to delay funding of the final stage of the reconstruction and

20

condominium conversion of the Walker Landmark Premises, which was due to be completed by late 2007, and

charging excessive additional interest, penalties, and extension fees.

137. Upon information and belief, in participating in the origination, funding and management of the

Enterprise, Wextrust and Broadway Bank and the other Defendants had the objective of depriving Plaintiffs of their

property, assets, compensation, and profits to be realized from their ownership of the Walker Landmark Premises,

which, at the time of the Enterprise Loan transaction, was valued in excess of $24 million. [46]

Events Following Commencement of Wextrust Receivership

138. Upon information and belief, beginning in September 2008, Plaintiffs started communicating with

the Receiver and his counsel concerning the prior and continuing activities of Wextrust and the other Defendants,

who had participated in the Enterprise Loan.

139. Also beginning in fall 2008 and continuing well into 2009, based on information obtained from

various sources, Plaintiffs in a series of submissions advised the Receiver and his counsel that, although Wextrust

had long been insolvent and existing on illegal proceeds of its Ponzi scheme, individual executives at Wextrust and

other organizations, including Broadway Bank, had entered into a series of transactions and contracts, including

secret agreements providing for the sharing of fees and other compensation arrangements, and other instruments,

involving the Enterprise Loan, that were transmitted over an extended period of time via mail and wire

communications (phone, telefax and email).

140. During the time period referenced in ¶ 155 supra, Plaintiffs’ representatives on numerous occasions

advised the Receiver and his counsel that, although Wextrust had long been conducting business in various states

and through many affiliates and entities, it had been discovered that basically none of these entities had been

organized in compliance with the laws of one or more states, which facts were known or should have been known by

individual executives at Wextrust and other participating organizations, including its joint venture partner Broadway

Bank, and the participants that provided legal, accounting and related consulting services to Wextrust in connection

with the Enterprise Loan and other financing transactions that were negotiated and administered over an extended

time period dating from 2005 to August 2008 via mail and wire communications (phone, telefax and data).

141. Upon information and belief, from the outset of discussions with Plaintiffs’ representatives, the

Receiver, acting largely through counsel, took the position that all actions undertaken by Wextrust and Broadway

Bank with respect to the Enterprise Loan were proper and in accordance with all applicable laws. 56 W LLC

rejected the Receiver’s position, maintaining that it and Guy Morris were direct victims of the Ponzi scheme and

that the Enterprise Loan were part of the related mortgage and bank loan schemes resulting in damage claims in

excess of $20 million.

142. Following the discussions with the Receiver, Plaintiffs’ representatives held two meetings with

officials of the SEC, the plaintiff in the litigation which had sought the appointment of the Wextrust Receiver. In

their communications to SEC officials, Plaintiffs’ representatives outlined their objections to the position taken by

the Receiver, and stated their claims against Wextrust and the resulting damages that were continuing to accrue –

and presently continue to accrue- on a daily basis.

143. At the meetings with officials of the SEC, they stated that contrary to the initial position that had

been taken by the Receiver, the SEC viewed Guy Morris and 56 W LLC as victims of the Wextrust Ponzi scheme.

The SEC representatives stated further that the SEC, due to funding and other limitations in commencing action

against Wextrust, was seeking compensation only for investors, who had lost their investments in Wextrust ventures,

and not other victims such as Plaintiffs, who lost money as a result of the illegal Ponzi scheme operated by Wextrust

and associated mortgage fraud. The SEC representatives stated further that since Guy Morris and 56 W LLC were

non investor victims of the Wextrust fraud, they would have to seek compensatory damages through their own

means. The SEC representatives also conveyed the apologies of the agency to the Plaintiffs for any problems that

may have previously been caused by the Receiver's initial position, which failed to recognize the 56W LLC and Guy

Morris were victims of the Ponzi scheme and its aftermath. (See Exhibit A Letter of Guy Morris to SEC outlining

report of meeting, and email in response from Steven Rawlings, SEC Regional Director, confirming next meeting.)

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144. Upon information and belief, the evidence obtained through the Receiver’s investigation has also

established that government investigations and regulators were aware through the filing of lawsuits by Wextrust

investors dating to the late summer of 2008 of allegations concerning illegal financings being conducted by

Wextrust. (See Hershman Order, ¶ ¶ 11-26.)

Settlement Agreement Between Receivership and Broadway Bank

145. Upon information and belief, on April 12, 2010, Judge Chin formally approved a settlement

agreement (“Broadway/Receiver Settlement”) executed by the Receiver and Wextrust’s venture partner, Broadway

Bank, which provided as follows: (1) resolved and terminated Broadway Bank’s creditor claim against the

receivership in the amount of $5,125,000 related to the Boardwalk mortgage transaction ; (2) resulted in an

immediate cash payment by Broadway Bank to the receivership in the amount of $650,000, with a potential future

cash payment to the receivership of up to $150,000; and (3) terminated Broadway Bank’s pending appeal of an

earlier ruling before the Second Circuit.

146. Upon information and belief, under the Broadway/Receivership Settlement, Defendant Broadway

Bank agreed to (a) forfeit its $5.125 million claim against the Wextrust Receivership; (b) pay $650,000 in cash

immediately. The Settlement Agreement also provides that Broadway Bank will pay up to an additional $150,000

from proceeds that may be realized from future litigation to be brought by the bank against a number of unnamed

“professionals,” who the bank contends were guilty of negligence and/or breaches of their contractual obligations in

providing legal, accounting and related services to the bank in connection with the Boardwalk transaction.

147. Upon information and belief, the Broadway/Receiver Agreement also terminated the right of

Broadway Bank to claim a continuing security interest in and to various notes that it held via the loan joint ventures

with Wextrust. Specifically, the Court found that Broadway Bank had failed to protect its interest in notes and

related loan documents by making routine UCC filings. As a result, the Court denied Broadway's claims “to the

extent it seeks treatment as a secured creditor...” (SEC v Byers, et al, Opinion, Receiver’s Documents, Doc. 579, p

17)

Defendant Byers Plea Agreement

148. Upon information and belief, on April 14, 2010, Defendant Byers pleaded guilty pursuant to a plea

agreement with the US Department of Justice under which Byers faced a statutory maximum sentence of 25 years in

prison and agreed to forfeit $9.2 million and is subject to mandatory restitution and faces criminal fines up to twice

the gross gain or loss derived from the offense. On April 11, 2011, Byers was sentenced to a term of imprisonment

of 13 years 4 months by Judge Denny Chin.

149. Upon information and belief, in entering a plea, Byers has acknowledged his role in the Wextrust

fraud. Count One charged him with conspiracy to commit securities fraud, mail fraud and wire fraud, in violation of

18 U.S.C. Section 371. The Count carries a maximum term of imprisonment of 5 years. Count Three charged him

with securities fraud in violation of 18 U.S.C. Sections 78j (b) and 78ff. It carries a maximum term of imprisonment

of 20 years.

150. Upon information and belief, the US Department of Justice press release confirmed the following

facts based on its investigation:

“[F]rom at least 2003, Byers and others raised money from investors pursuant to private placement

offerings and then used material amounts of that money for other purposes, and did not disclose their

diversion of funds to investors.

In one such private placement, Byers and others raised approximately $9.2 million in investor funds by

representing that the funds would be used to purchase and operate seven commercial properties that were

leased to the United States General Services Administration ("GSA"). According to the GSA private

placement memorandum issued to investors by WexTrust Capital, the $9.2 million raised from investors,

22

together with a mortgage of approximately $21 million, would be used to purchase the seven GSA

properties and cover related acquisition expenses.

The seven GSA properties, however, were never purchased. Instead, virtually all of the funds raised from

investors to purchase the properties were diverted by Byers and others to other purposes, but investors were

never informed that the funds were used for any purpose other than to purchase and operate the seven GSA

properties.

Byers and others later agreed to make up a story that they would then tell the GSA investors regarding what

happened to their investment.” See: http://newyork.fbi.gov/ dojpressrel/ pressrel10/nyfo041310.htm.

151. Upon information and belief, also at the April 14, 2010 plea hearing, Defendant Byers stated as

follows:

In 2005, myself and others met and devised a plan to raise money for properties that had leases to the GSA.

Sometime in 2006, we continued to raise money for that property even though we didn't own it and didn't

close it. In addition, I made up certain documents that were untrue, that were false, and either sent them or

caused them to be sent to investors Byers Hearing Transcript http://www.wextrustreceiver.com/

documents/court_papers/ Transcript%20of%20Byers%20Plea%20Hearing.pdf at p. 15

152. Upon information and belief, in answer to a series of questions from the Court at the plea hearing,

Defendant Byers provided the following answers:

THE COURT: Did this involve the purchase or sale of securities?

THE DEFENDANT: It involved the purchase of a limited partnership or an LLC and trust which I believe

are securities.

THE COURT: During the course of this scheme, did you communications in furtherance of the scheme?

THE DEFENDANT: Yes, we did.

THE COURT: Did you and/or others in the group make use of the wires or telephones or faxes to make

communications in furtherance of the scheme?

THE DEFENDANT: Yes, we did.

THE COURT: Where did this happen, what state?

THE DEFENDANT: It happened both in Chicago and Norfolk, Virginia, possibly New York as well. As

far as where the offices that it was sent out of?

THE COURT: Communications were sent out of --

THE DEFENDANT: I believe Chicago.

THE COURT: -- Chicago and Norfolk, Virginia?

THE DEFENDANT: Definitely Norfolk, Virginia.

THE COURT: Were any communications sent in to New York?

THE DEFENDANT: To the extent there were investors in New York, then it would be sent to New York.

Byers Hearing Transcript

http://www.wextrustreceiver.com/documents/court_papers/Transcript%20of%20Byers%20Plea%20Hearin

g.pdf at p.p. 17-18

153. Upon information and belief, in addition, at the hearing, the prosecutor provided the following

statement:

MS. BARONI: If the case proceeded to trial, the government would have proven through testimony,

documents, tape recordings and other evidence beyond a reasonable doubt, the facts set forth in the

superseding information; specifically, that Mr. Byers was the chief executive officer of WexTrust Capital, a

private equity company specializing in real estate investments and that from at least 2003 through August

2008, Byers and others raised money from investors, typically through a private placement memorandum,

and diverted material portions of investor funds for other purposes, without disclosing those diversions to

the investors.

23

The evidence would show that Byers and his co-conspirators made materially false and misleading

statements as well as material omissions in numerous ways to investors, including in documents sent

through the U.S. mails and in telephone conversations and investor calls. The evidence would show that

Byers and his co-conspirator basically operated a Ponzi scheme whereby investor moneys were used for

other unrelated projects and investors were paid with other investors' funds.

Specifically with respect to the fraud relating to GSA investors, the LLC, the evidence would show that

WexTrust Capital raised approximately $9.2 million from investors in or about November 2005. Some of

these investors were located in the Southern District of New York. This GSA Investors LLC was formed to

purchase and operate 7 commercial properties that were leased to the General Services Administration.

The GSA properties were never purchased by GSA Investors LLC or by any WexTrust entity. Mr. Byers

and others merely diverted investors' funds and did not disclose those diversions to investors and they

continued to make misrepresentations for years to the investors and even sent out K1 forms to them

showing the purported income that they earned from their investments in GSA when no income was ever

earned. Byers and his co-conspirators continued to use the investor money for other purposes. Byers

Hearing Transcript http://www.wextrustreceiver.com/documents/court_papers/

Transcript%20of%20Byers%20Plea%20Hearing.pdf at p.p. 19-21.

154. Upon information and belief, as noted, Judge Chin on April 11, 2011 sentenced Byers to 160

months in federal prison for his role in the Wextrust Ponzi and fraud scheme .

155. Upon information and belief, on July 18, 2011, Judge Denny Chin sentenced Defendant Joseph

Shereshevsky, Byers’ co-defendant, to a term of 21 years, 10 months, the maximum sentence permitted pursuant to

the plea agreement. Shereshevsky was also ordered to pay $7.7 million in restitution, and forfeit $9.2 million in

proceeds from the crimes.

Purchase of Certain Broadway Bank Loan Assets By MB Bank

156. Upon information and belief, on April 23, 2010, Broadway Bank was seized by the Illinois

Department of Financial and Professional Regulation Division of Banking, which immediately appointed the

Federal Deposit Insurance Corporation (FDIC) as receiver. As outlined in an extensive report by the Inspector

General’s Office of the FDIC, among the reasons cited for the Broadway Bank’s failure were an "aggressive growth

strategy" to pursue commercial real estate and construction loans, out-of-territory lending in Florida and New York,

investments in certain securities and other funding sources, such as brokered deposits, which significantly increased

the risk to the bank, as it hastily and unsystematically sought to reverse growing losses. The Inspector General

found that as a key part of this effort, the bank sought in 2006 -2007 to switch to an increased nationwide focus on

loan growth through geographic diversification in an effort to reverse losses, increase profits and decrease loan

portfolio risk. However, as matters developed, this focus failed as it resulted in a large out-of-territory loan

concentration in some states that experienced significant economic declines, substantial risk, and significant losses

for Broadway. As of December 31, 2007, out-of-territory loans (including the Enterprise Loan) represented 60

percent of its loan portfolio. (See Exhibit B Excerpts from Material Loss Review of FDIC.) Immediately on its

takeover of Broadway Bank, the FDIC concurrently entered into a purchase and assumption agreement with MB

Bank to assume all of the deposits and acquired certain assets of Broadway Bank, including its interest in the

Enterprise Loan. Based on this purchase transaction, MB Bank identifies itself as “successor bank to Broadway

Bank.”[47] MB Bank was the only bank to bid on and acquire the referenced assets of Broadway Bank.

157. Upon information and belief, beginning in June 2010, 56 W LLC contacted MB Bank and sought

to begin discussions concerning the resolution of its claims related to the damages resulting from the Enterprise

Loan. MB Bank was seeking payment for the Enterprise Loan.

158. Upon information and belief, as discussions continued, MB Bank took the position that it was

seeking payment of the full principal ($8 million) plus interest claimed owing on the Enterprise Loan.

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159. Upon information and belief, as outlined in Exhibit A letter to the SEC, it remains the position of 56

W LLC that the Enterprise Loan was fraudulent from the outset,and part of the elaborate mortgage fraud scheme

organized , administered and facilitated by Wextrust in joint venture with Broadway Bank and others. Furthermore,

it is the 56 W LLC position that the purported 56 Walker Street mortgage and note claimed to be held by MB Bank

(“Purported MB Bank Mortgage”) were and are void ab initio, are not supported by a valid chain of title, are part of

a bifurcated, joint venture loan and therefore not subject to foreclosure. Plaintiffs have further learned that MB Bank

claims to the Purported 56 Walker Mortgage are based on an assignment of mortgage (“Backdated 56 Walker

Mortgage Assignment” attached as Exhibit C) that was backdated and apparently robosigned by an MB Bank senior

officer acting as attorney-in-fact for the FDIC, and was notarized in violation of New York Law. Additionally, MB

Bank and its attorneys have deliberately and consistently refused Plaintiffs’ requests to verify the Purported 56

Walker Mortgage and Purported 56 Walker Assignment documents as required under New York State law and the

policy established by the Chief Judge of the New York State Court of Appeals and endorsed by the four Presiding

Justices of the New York State Appellate Divisions.

160. Upon information and belief, 56 W LLC from the outset of discussions informed MB Bank that

any efforts by it or its parent company to foreclose the Enterprise Loan would be regarded as attempt to aid and abet

the Wextrust / Broadway Bank Ponzi scheme and mortgage fraud. 56 W LLC furnished MB Bank and its senior

officers with a copy of a draft copy of the instant complaint to review so they could be fully knowledgeable of the

information available to Plaintiffs. While no communication was received from the MBFI Board or senior

executives, Representatives of MB Bank informed 56 W LLC that they were fully knowledgeable of the position of

56 W LLC and the draft complaint.(See Exhibit D, Letter of attorneys for MB Bank) Over a period of some 14

months, Plaintiff Guy Morris submitted a series of nine letters to MB Bank and MBFI officers and directors

including detailed warnings that the bank's continued efforts to foreclose the Purported 56 Walker Mortgage raised

serious assumed liability claims owing to their position as a successor to Broadway Bank and, more importantly,

new direct liability claims based on the direct violations of their fiduciary duties as officers and directors, and

violation of the doctrine of Willful Blindness and fraud on the court. Additionally, the letters also included evidence

of unlawful conduct by bank officers and related illegal conduct of others. (See three of the series of letters

submitted to MB Bank and MBFI included as Exhibits E,F, and G) Throughout this entire 14 month period, MBFI

has continued to file Form 10Q and 8K Reports with the SEC incorporating representations as to anti-fraud

monitoring controls (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over

financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)).Plaintiffs view the lack of response

to their series of 9 letters by the senior management and Boards of MBFI and MB Bank to be inconsistent with and

contradictory to the representations MBFI has made in its 10Q submissions.

161. Upon information and belief, MB Bank has persisted in its efforts to collect the Enterprise Loan,

initially retaining counsel (formerly employed by Broadway Bank, and subsequently replacement counsel), who first

filed motions under the name Broadway Bank, and subsequently under the name of MB Bank, in an effort to avoid

the involvement of the FDIC in the case, and ultimately designed to place the Walker Landmark Premises into a

receivership, directly threatening the economic and property interests of Guy Morris, 56 W LLC and its lessee, INN.

These actions have been pursued by MB Bank without verifying in any manner the legality of its claim to a first

position security interest in the Purported 56 Walker Mortgage and Assignment.

162. Upon information and belief, during discussions with Plaintiffs, MB Bank executives, and

Defendant DeWoskin (while in the employ of MB Bank), have misrepresented their position to Plaintiffs and others

by stating they are seeking the full amount of the Enterprise Loan as “collection agents” for the FDIC. Plaintiffs

contacted FDIC and confirmed that it has not employed MB Bank as its collection agent. FDIC reported to Plaintiffs

that it sold a series of loans – including the Enterprise Loan-formerly held by Broadway Bank to MB Bank at book

value, and expects that MB Bank will settle claims as it chooses, and/or sell the loans at discount into the secondary

market, which in fact the bank has done with large pools of loans. In June,MB Bank sold 631 performing, sub-

performing and non-performing loans to Colony Acquisitions Financial in a transaction that cost the bank $86

million in charge-offs in Q2. Plaintiffs have informed senior management of MB Bank and the directors of its

parent, MBFI, of the actions of its executives involving misrepresentation of the FDIC position. (See attached

Exhibit F Letter to Ronald Santo, Chairman of MB Bank.)

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163. Upon information and belief, Guy Morris also informed MB Bank’s senior executives and MBFI directors of

the evidence that has been gathered to date concerning the mortgage fraud conspiracy of Wextrust and Broadway

Bank and the bank law violations and fraud of Broadway Bank and Wextrust. Neither senior management nor the

Board has responded to Mr. Morris, notwithstanding the fact that he and his family continue to be shareholders of

MBFI. (A predecessor of MB Bank was founded by a member of the Morris family, many of whom continue to hold

stock in the parent company.) Such deliberate disregard of information supplied by interested individuals, especially

shareholders, is contrary to fundamental responsibilities of corporate directors. Boards of directors are expected to

“understand and adopt the attitude of the modern board which recognizes that the board must perform active and

independent oversight to be, as the law requires, a fiduciary for those who invest in the corporation.” (See 2000 Blue

Ribbon Commission on Improving the Effectiveness of Corporate Audit Committees .)

164. Upon information and belief, MB Bank officers and MBFI directors have been provided evidence

specifically showing that the Enterprise Loan transaction was directly related to the Broadway Bank-Wextrust

mortgage fraud scheme and conspiracy to deceive state and federal bank regulators. (See attached Exhibits D and E,

and F, Supplemental Letter to Ronald Santo, Chairman of MB Bank.)

165. Upon information and belief, MB Bank officers and MBFI directors have been provided evidence

showing that officers of the insolvent Wextrust and senior officers of Broadway engaged in an illegal note for debt

swap designed to mislead Federal and state bank examiners and regulators, which actions constituted bank fraud and

fraud on the regulators. (See attached Exhibit F letter to the board of directors of MBFI.)

166. Upon information and belief, as MB Bank has proceeded with efforts originally begun by

Broadway Bank before its seizure by the Illinois Banking Department to foreclose the purported 56 W LLC

mortgage and note in New York State Supreme Court, Plaintiffs have taken the position that all such legal actions

are illegal and a fraud upon the court. Plaintiffs have cited the following grounds:

a) The Purported 56 Walker Mortgage created as part of the Wextrust-Broadway

Bank joint venture fraud was invalid and void ab initio.

b) The subsequent 56 Walker Mortgage Assignment by the FDIC to MB Bank was

illegally backdated, illegally notarized and therefore void as a matter of law.

c) The Purported 56 Walker Assignment by the FDIC to MB Bank bears a signature

that appears to be irregular and/or robosigned by a person or persons unknown, and therefore is

void as a matter of law.

d) In pursuing litigation against Plaintiffs in New York State Supreme Court,

action, Nesenoff and Miltenberg, former counsel for MB Bank, failed to submit the necessary

certification of counsel required under New York State law and policy to establish the validity

of the Purported 56 Walker Mortgage and the related mortgage and financing documents.

e) Attorneys Nesenoff and Miltenberg failed to answer Plaintiffs requests to provide

sworn verifications as to the validity of the Purported 56 Walker Mortgage and the related

mortgage and financing documents.

f) In submitting an Order to Show Cause seeking the appointment of a Receiver for

the 56 Walker Street premises and a Motion for Summary Judgment against Plaintiffs in New

York State Supreme Court, the substitute counsel for MB Bank, Katten Muchin Rosenman , in

an effort to proceed with and expedite the action, also purposely failed to submit the necessary

certification of counsel required under New York State law and policy establish the validity of

the 56 Walker Joint Venture Mortgage and the related mortgage and financing documents.

g) Attorneys Katten Muchin Rosenman failed to comply with Plaintiffs’ written

request to provide sworn verifications as to the validity of the Purported 56 Walker Mortgage

and the related mortgage and financing documents.

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h) The Wextrust-Broadway Bank joint venture loan to 56 W LLC and Guy Morris

and the mortgages and notes created thereunder were by their terms and on their face

bifurcated, rendering the mortgages unenforceable and foreclosure impossible by Broadway

Bank and its successor, MB Bank.

i) Because of bifurcation used to create the Wextrust-Broadway Bank joint venture

loan to 56 Walker LLC and Guy Morris, Broadway Bank (and its successor MB Bank) never

had an assignable interest in the mortgage and notes. (See Bank of New York, etc., v Stephen

Silverberg, 926 N.Y.S.2d 532, 2d Dept., 2011).

j) The backdated Purported 56 Walker Mortgage Assignment and the related

mortgage and financing documents executed by the FDIC and MB Bank was not authenticated

by a signatory with personal knowledge of how and when the debt documents were created,

rendering the assignment from FDIC to MB Bank void and invalid.

k) The backdated Purported 56 Walker Mortgage Assignment and the related

mortgage and financing documents executed by the FDIC and MB Bank was based on analysis

with other documents in all likelihood robosigned by a person or persons unknown who caused

a false signature to be affixed to the document rendering the document void.

l) MB Bank, as assignee of FDIC and successor to Broadway Bank, has failed to

establish a valid chain of title in and to the Purported 56 Walker Mortgage, and the related

mortgage and financing documents, and therefore it could not legally pursue foreclosure of the

mortgage. (See OneWest Bank, F.S.B. v. Drayton, 29 Misc.3d 1021;  Bank of N.Y. v. Alderazi,

28 Misc.3d 376, 379–380 [the “party who claims to be the agent of another bears the burden of

proving the agency relationship by a preponderance of the evidence”];

m) As assignee of the FDIC and successor to Broadway Bank, MB Bank cannot

receive through assignment or other means a security interest in financial obligations superior

to that held by Broadway Bank.

167. Upon information and belief, MBFI and MB Bank, acting through their Boards of Directors, have

proceeded to authorize the continued legal assault against Guy Morris,56 W LLC, and its lessee INN in an unlawful

effort to foreclose the purported 56 Walker mortgage and note, and seize the Walker Street Landmark Premises and

expel Plaintiffs in the process. MBFI and MB Bank have undertaken these actions in the face of detailed evidence

presented to the boards of directors by Plaintiffs drawn from the continued investigation by the Department of

Justice and others, and related court actions of the SEC and the Receiver establishing legal liability of Wextrust and

Broadway Bank – including criminal liability of the Wextrust principals and the liability of those who aided and

abetted Wextrust, such as the Much Shelist law firm.

168. Upon information and belief, the boards of MBFI and MB Bank to date have violated their fiduciary

responsibilities and chosen to purposely turn a blind eye to the detailed information presented to them by Plaintiffs.

Such actions are clearly direct violations of fiduciary duties and obligations of the officers and directors of MBFI

and MB Bank under corporate law and US bank laws, regulations and policies, and also constitute Willful Blindness

on the part of the Boards, as they have sought to victimize the Plaintiffs, misusing the Purported 56 Walker

Mortgage in a fraudulent attempt to seize the Walker Street Landmark Premises. The Banks and their Board

members and senior management would have all believe that the otherwise invalid 56 Walker mortgage documents

and note were somehow immaculately conceived in the midst of a complex conspiracy of fraud and deception,

which was the Wextrust- Broadway Ponzi scheme and mortgage fraud. Such Willful Blindness was found as a

primary source of liability in the Enron scandal. So too must it be found as the basis of the liability of the MB Bank

and MBFI directors. “The [Enron] Board witnessed numerous indications of questionable practices by Enron

management over several years, but chose to ignore them to the detriment of Enron shareholders, employees and

business associates.” U.S. Senate Permanent Subcommittee on Investigations Report: The Role of Directors in

Enron’s Collapse

27

169. Upon information and belief, in addition, Plaintiffs have recently discovered that MB Bank was fully

knowledgeable concerning the facts and circumstances of the Wextrust Ponzi scheme and mortgage fraud over one

year prior to acquiring certain assets of,and claiming to be successor to Broadway Bank on April 23, 2010. A

review of the Wextrust Receivership filings with this Court ( File No: 08 Civ – 7104(DC)) has revealed that on

February 27, 2009, MB Bank in connection with a takeover of another failed bank, purchased from the FDIC

certain of the assets of Heritage Community Bank, Glenwood, IL.(“Heritage”). Included among the assets acquired

from Heritage was a Fixed/Adjustable Rate Note dated December 14, 2005 made by Wextrust founder and CEO

Steven W. Byers in principal amount of $960,000 (“Byers Note”). According to a Notice of Claim filed by MB

Bank with the Court, the Byers Note was secured by “among other things, a Mortgage from Steven W. Byers to

MB Financial related to real estate located in Chicago, Illinois.” The Notice states that Byers defaulted on the Note

and the full amount remains due and payable. (See http://www.wextrust receiver.com/

documents/court_papers/Notice%20of%20Claim%20MB%20Financial%20 Bank.pdf). (Note: Byers was in federal

custody at the time MB Bank acquired his note.) Also, in the Heritage takeover, MB Bank acquired a construction

mortgage from Group West Builders. LLC in the amount of $975,000 against a property known as 1833 N.

Marshfield Avenue, Chicago, Il. The property also carried a junior mortgage to Wexford High Yield Debt Fund I,

LLC.(another Wextrust related entity). Beginning at least with its acquisition of Heritage in April 2009, and possibly

earlier, MB Bank knew or should have known of the criminal involvements of Wextrust, its principals and its

receivership and operations, and therefore must be deemed to have taken possession of the Purported 56 Walker

Mortgage (and other Broadway Bank paper) with full knowledge of the history of the Wextrust fraud, and the past

and then pending criminal charges against Broadway Bank’s chief executives. This past history of dealings with the

felon Byers and the failed Wextrust raises serious issues with respect o the bank’s later handling of purported assets

it “acquired” as sole bidder from Broadway Bank. It also raises questions as to what disclosures were or were not

made to the FDIC with respect to these prior dealings with Wextrust and its principals.

170. Upon information and belief, Plaintiffs have also recently discovered that MB Bank has had a

continuing and perhaps long standing relationship with Demetris Giannoulias, former president of the failed

Broadway Bank, and current president of CheckSpring Bank in the Bronx, New York (acquired in 2007), and owner

of a residential property in Brooklyn, New York dating to 2006 (68 Hicks Street/36 Cranberry Street). Specifically,

a review of public documents shows that MB Bank sold mortgages at preferential rates to Giannoulias and to his

New York bank (Checkspring) (“Giannoulias Preferential Deals”) (See Exhibit G). The mortgage documents appear

to be highly irregular, involving, among other things, backdating, predating, robosignatures, and invalid

notarizations. These Giannoulias Preferential Deals,involving MB Banks sales of assets acquired from the FDIC to

the president of the failed Broadway Bank, which has been taken over by the same agency, raise serious legal

questions, including possible violations of the Federal Deposit Insurance Act, rules and policies, and breaches of the

Purchase and Assumption Agreement. Plaintiffs are presently in the process reviewing various matters with the

FDIC officials, including a series of apparent compliance violations and breaches of the Purchase and Assumption

Agreement and impact on FDIC loan insurance coverage.

171. Upon information and belief, Plaintiffs have also come into possession of a series of mortgage

transaction documents, including the 56 Walker Mortgage Assignment, the Giannoulias Preferential Deals and

others executed by MB Bank officers, including Thomas Marvinac, MB Bank Senior Vice President and Howard

Martin, MB Bank vice president (and former loan officer of Broadway Bank), in connection with a number of

mortgage transactions. These documents present evidence that the practices of apparent robosigning, use of invalid

notarizations, backdating, and predating of mortgage documents by MB Bank go far beyond the Purported 56

Walker Mortgage and Assignment documents. Plaintiffs have located a cross section of other documents, which

reflect serious irregularities, including apparent robosigning, use of invalid notarizations, backdating, and predating

of mortgage documents. Evidence of such fraudulent practices appearing in a random selection of MB Bank

documents raises serious questions regarding all current and past mortgage foreclosure actions in which MB Bank is

and has been involved, as well as critical regulatory compliance issues. These are matters of immediate concern to

the FDIC, Office of Comptroller of the Currency and the Federal Reserve Board ( see Federal Reserve Board

Consent Order enforcement action against Goldman Sachs Bank Docket No. 11-112-B-HC,SM for deficient

practices involving a pattern of misconduct and negligence in mortgage loan servicing and foreclosure processing

(http://www.federalreserve.gov/newsevents/press/enforcement/enf20110901f1.pdf))Since MBFI is a public

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company, the referenced matters are also of immediate concern as they impact financial reporting by the company

with respect to the six failed banks MB Bank has acquired from the FDIC over the last several years including

Benchmark Bank , Aurora, Ill.(December 2008) acquired $164 million in deposits and assets valued at $146

million; Heritage Community Bank, Glenwood, IL, (February 27, 2009) , $233 million; InBank, Oak Forest, IL

(September 4, 2009) acquisition price $212 million;Corus Bank, Chicago, IL, (September 11, 2009),$7 billion;

Broadway Bank, Chicago, IL (April 23, 2010),$878 million (representing a $394 millioncost to FDIC Fund); New

Century Bank, Chicago, IL( April 23, 2010),$486 million (representing a $125 million cost to FDIC Fund. In its

financial reporting, MBFI has stated that reported non-performing loans exclude loans held for sale and certain

purchased credit-impaired loans that MB Bank acquired in FDIC-assisted transactions, a majority of which it states

are subject to loss share arrangements with the FDIC. The bank has stated that these purchased credit-impaired loans

are accounted for on a pool basis, and the pools are considered to be performing. Additionally, it regularly reports

that non-performing assets exclude other real estate owned related to assets acquired in FDIC-assisted transactions.

Actions by MB Bank and MBFI that call into question compliance with regulatory and contract obligations with the

FDIC, necessarily directly impact financial reporting assumptions and disclosures by MBFI. It is also noted that

MBFI and MB Bank operate without a general counsel or law department. Legal matters are assigned to outside

counsel on a case by case basis and lacking a proper law department there is apparently no bank-wide anti-fraud,

regulatory compliance and financial reporting systems as is to be expected from a company the size of MBFI. This

lack of what should be routine monitoring systems must be a matter of immediate concern to the FDIC, Federal

Reserve Board, Office of Controller of the Currency and the SEC.

172. Upon information and belief, Plaintiffs have also discovered evidence of use of masked Internet

addresses by at least one senior officer of both Broadway Bank and MB Bank. Specifically, Defendant DeWoskin, a

former senior officer of Broadway Bank and MB Bank, has been directly involved in numerous litigation matters,

including Plaintiffs’, affecting both companies. In this regard, discovery taken against the two banks has necessarily

involved Dewooskin’s emails. It has been discovered that rather than, or in addition to, using the servers maintained

by the banks, this particular employee used a public server masked to appear to be the bank server (See Exhibit H).

This appears to be an attempt to avoid disclosure of the officer’s emails and involves serious issues of fraud. It is not

known if other employees of these banks engaged in this same unlawful practice, which in turn calls into question

all discovery responses provided by each bank over the last several years. Additionally, it has recently been

reported that this same officer left the employ of MB Bank the day before she was to provide certain interrogatories

in a pending case (MB Financial Bank v. 78th Street Associates, New York State Supreme Court). This sudden

change of employment allowed MB Bank to take the position that it could not supply the interrogatories. It has

subsequently been learned that the officer has secured a position at a company that appears to have a connection to

at least one MB Bank senior officer.

Violations of Real Estate Procedures Act (12 USC § 2601, et seq)

173. Upon information and belief, Plaintiffs have also ascertained that beginning in 2007 and continuing to

date, Defendants Wextrust, Broadway Bank and MB Bank have engaged in a series of acts and continuing conduct

constituting direct violations of the Real Estate Procedures Act (12 USC § 23601, et seq) (“RESPA”).

174. Upon information and belief, Defendants have violated 12 USC § 2605 in failing to provide notice of

transfer of mortgage servicing responsibilities as follows:

a) On or about October 2008, Broadway Bank (transferee) succeeded Wextrust Capital

(transferor) as loan servicer under the Wextrust - Broadway Bank joint venture loan. Upon becoming servicer,

Broadway Bank failed to comply with the provisions of 12 USC 2605 (b)(1) and (2) in that it did not provide the

required notice to 56 W LLC within the requisite time frame. The Receiver of Wextrust Capital (transferor) also

had an obligation under the specified section to provide notice to 56 W LLC of the transfer of servicing

responsibilities for the said loan. 56 Walker LLC and Guy Morris were damaged by the statutory violations of

Wextrust and Broadway Bank.

b) On or about April 23, 2010, MB Bank (transferee) succeeded Broadway Bank (transferor) as

loan servicer under the Wextrust - Broadway Bank joint venture loan. Upon becoming servicer, MB Bank failed to

comply with the provisions of 12 USC 2605 (b)(1) and (2) and (B) in that it did not provide the required notice to 56

W LLC within the requisite time frame defined as not more than 30 days after the effective date of the assignment,

sale, or transfer of the servicing of the Purported 56 W Mortgage loan where preceded by, as in this case,

commencement of proceedings by the FDIC for receivership of the servicer (or an entity by which the servicer is

29

owned or controlled). Broadway Bank (transferor) had an independent obligation to provide notice to 56 W LLC

within the requisite time frame. 56 Walker LLC and Guy Morris were damaged by the statutory violations of MB

Bank and Broadway Bank.

c) Following April 23, 2010, on repeated occasions, MB Bank as servicer of the 56 Walker Joint

Venture Loan repeatedly failed to respond to written inquiries submitted by 56 W LLC and Guy Morris for

information related to the said loan. MB Bank’s deliberate failures to respond to the said inquiries directly violated

of 12 USC 2605 (e)(1) (a). 56 W LLC and Guy Morris were damaged by the actions of MB Bank.

d) Plaintiffs 56 W LLC and Guy Morris are seeking an award of actual damages incurred as the

result of the failure by Wextrust, Broadway Bank and MB Bank to comply with 12 USC 2605. Additionally, due to

the fact that the violations by Defendants Wextrust, Broadway Bank and MB Bank involve a pattern or practice of

non-compliance with 12 USC section 2605, Plaintiffs are entitled to additional damages.

175. Upon information and belief, Defendants have violated 12 USC § 2605 (g) in failing to provide

required escrow account safeguards.

a) On or about September 21, 2007, Wextrust, on behalf of itself, and Broadway Bank established

an escrow account under the Purported 56 W Mortgage totaling in excess of one million dollars to pay for annual

interest, as well as other expenses and fees. The escrow account directly violated provisions of 12 USC 2605 (g)

related to the establishment of escrow accounts in connection with the federally related mortgage loan in question.

b) On or about April 23, 2010, Broadway Bank, as represented by the FDIC as receiver, agreed to

transfer the Purported 56 W Mortgage to MB Bank, including the accounting of the escrow account originally

established under the Purported 56 W Mortgage. At its inception, the said escrow account totaled in excess of one

million dollars to pay for annual interest, as well as other expenses and fees. The escrow account directly violated

provisions of 12 USC 2605 (g) related to the establishment of escrow accounts in connection with the federally

related mortgage loan in question.

c) Plaintiffs 56 W LLC and Guy Morris are seeking an award of actual damages incurred as the

result of the actions of Wextrust, Broadway Bank and MB Bank in creating and transferring an unlawful escrow

account established and operated in direct violation of 12 USC 2605(g). Additionally, due to the fact that the

violations by Defendants Wextrust, Broadway Bank and MB Bank involve a pattern or practice of non-compliance

with 12 USC section 2605(g), Plaintiffs are entitled to additional damages.

176. Upon information and belief, Defendants have violated 12 USC § 2607 in engaging in unlawful

kickbacks and split charges in direct violation of the said statute.

a) Under the Purported 56 Walker Mortgage as originally established by the Wextrust – Broadway

Bank joint venture , a secret agreement was included under which Broadway Bank would and did unlawfully

“kickback” to and split charges with Wextrust involving some 25% of the interest paid by 56 W LLC. These secret

payments were in direct violation of 12 USC 2607(a) and (b). MB Bank claiming to be a “successor to Broadway

Bank” is seeking to recover the full interest, including the kickback share and split charges paid by Broadway Bank

to Wextrust. MB Bank is therefore directly implicated in the kickback scheme.

b) Plaintiffs 56 W LLC and Guy Morris are seeking an award of actual damages incurred as the

result of the actions of Wextrust, Broadway Bank and MB Bank in creating and transferring an unlawful kickback

share and split charges established and carried out in direct violation of 12 USC 2607(a) and (b). Additionally, due

to the fact that the violations by Defendants Wextrust, Broadway Bank and MB Bank involve a pattern or practice of

non-compliance with 12 USC section 2607, Plaintiffs are entitled to additional damages.

Count 1 ACTION FOR BREACH OF FIDUCIARY AND PROFESSIONAL AND PUBLIC TRUST DUTIES

REQUIRED OF FDIC MEMBER BANKING INSTITUTIONS AND THEIR OFFICERS AND

DIRECTORS

(Against Defendants MB Bank and MBFI and Broadway Bank and their Named Officers and Directors)

178. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 177 above

with the same force and effect as if herein set forth.

179. Defendants MB Bank and MBFI and Broadway Bank and their named officers and directors knew

there was an illegal or improper object to be accomplished, i.e. to deprive Plaintiffs of their property, profits and

compensation through breach of professional and fiduciary duties and public trust responsibilities.

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180. Plaintiffs have direct harm and damages, as stated supra, as a direct result of breach of professional

and fiduciary duties.

181. Furthermore, in this case, the MB Bank, MBFI and Broadway Bank Defendants, including banking

institutions and banking professionals, operate under the law, including, Federal Reserve Act, 12 U.S.C. 221 et seq,,

(“Federal Reserve Act”), The Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. § 1833a,

(“FIRA”)The Federal Deposit Reform Act and Conforming Amendments Act 12 U.S.C. Section

1828(a)(1)(B)(FDIC Act), and the Securities Exchange Act of 1934,15 U.S.C. § 78a (Securities Act), and pursuant

to the public trust, and accordingly, they must be held to the highest fiduciary responsibilities required of corporate

officers. Therefore, here, given the circumstances and actions involved, includingviolations of the federal common

law powers of the FDIC, and banking and securities laws,and the MB Bank and MBFI Defendants reckless and

Willful Blindness to the criminal and related conduct at issue, said Defendants should properly be held the highest

degree of culpability for breaches of their professional and fiduciary duties.

182. As a result of said Defendants’ actions constituting breach of professional and fiduciary duties,

Plaintiffs are now and will continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to

an award against the Defendants, jointly and severally, for actual, general, special, compensatory damages in the

amount of at least $ 25,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs

of this action, including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 2

ACTION FOR VIOLATIONS OF THE FEDERAL COMMON LAW POWERS OF THE FDIC, AND

COMMON LAW FIDUCIARY RESPONSIBILITIES OF BANK OFFICERS AND DIRECTORS

(Against Defendants MB Bank and MBFI and Broadway Bank and their Named Officers and Directors)

183. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 182 above

with the same force and effect as if herein set forth.

184. Defendants MB Bank and MBFI and Broadway Bank and their named officers and directors knew

there was an illegal or improper object to be accomplished, i.e. to deprive Plaintiffs 56 W LLC, Guy Morris and

INN of their property through systematic violations of the federal common law powers of the FDIC, and state

banking and securities laws, and state common law fiduciary obligations.

185. Defendant Broadway Bank acted in violation of federal law, entering a series of fraudulent

agreements and financial instruments in conspiracy with Defendant Wextrust designed to mislead Plaintiffs and

deprive them of their property profits and compensation.

186. Defendants MB Bank and MBFI and their named officers and directors knowingly assumed the said

series of fraudulent agreements and financial instruments designed by Broadway Bank in conspiracy with Wextrust

to mislead Plaintiffs, and willfully, recklessly and purposely set about a course of action to deprive Plaintiffs of their

property, profits and compensation.

187. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of the conduct of

the said Defendants.

188. As a result of said Defendants’ actions constituting duress, Plaintiffs are now and will continue to

suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award against all the Defendants,

jointly and severally, for actual, general, special, compensatory damages in the amount of at least $ 15,000,000 and

for punitive damages in an amount to be determined by the jury, plus the costs of this action, including attorney's

fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 3

ACTION FOR WILLFUL BLINDNESS

(Against Defendants MB Bank and MBFI and their Named Officers and Directors)

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189. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 188

above with the same force and effect as if herein set forth.

190. Defendants MB Bank and MBFI and their named officers and directors knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs 56 W LLC, Guy Morris and INN of their property

through Willful Blindness.

191. The said Defendants on numerous occasions have been provided comprehensive and detailed

information by the Plaintiffs outlining the illegal – and criminal- past actions of Wextrust and Broadway Bank,

Byers, Shereshevsky, Cohen and others, who participated in creating and carrying out the Enterprise Loan mortgage

fraud and other illegal acts. Although presented with this thorough report of illegal conduct, the said MB Bank

Defendants ignored the comprehensive information described to them, choosing to deliberately shield themselves

from the clear evidence of critical facts as strongly suggested by the circumstances known to them. Such conduct

has been deemed to constitute Willful Blindness. It has been established in prior cases that the traditional rationale

for this doctrine is that defendants who behave in this manner are just as culpable as those who have actual

knowledge.

192.The Company reported in its latest 10Q filed with the SEC on August 1, 2011 that an evaluation of the

MBFI “disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934

(the "Act")) was carried out as of June 30, 2011 under the supervision and with the participation of our Chief

Executive Officer, Chief Financial Officer and several other members of our senior management.” The company has

further stated that the MBFI “Chief Executive Officer and Chief Financial Officer concluded that, as of June 30,

2011, our disclosure controls and procedures were effective in ensuring that the information we are required to

disclose in the reports we file or submit under the Act is (i) accumulated and communicated to our management

(including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required

disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's

rules and forms.” This representation is directly contradictory to and at variance with the detailed facts and

circumstances outlined in this complaint concerning reports of fraud and related illegal conduct previously

forwarded to the senior executives and Board members of MBFI and MB Bank.

193. In this case, the MB Bank and MBFI, including banking institutions and banking professionals,

operate under the law, including, Federal Reserve Act, FIRA, FDIC ACT and Securities Act, and pursuant to the

public trust, and accordingly, such institutions and individuals must be held to the highest fiduciary responsibilities

required of corporate officers. Therefore, here, given the circumstances and actions involved, including MB Bank

and MBFI Defendants’ Willful Blindness to the criminal and related conduct at issue, said Defendants should

properly be held the highest degree of culpability for breaches of their professional and fiduciary duties.

194. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of violations of

fiduciary obligations and Willful Blindness on the part of the MB Bank Defendants.

195. As a result of said Defendants’ actions constituting Willful Blindness, Plaintiffs are now and will

continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award against the

Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount of at least $

25,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 4

ACTION FOR AIDING AND ABETTING AN ILLEGAL ENTERPRISE AND PONZI SCHEME

(Against Defendants MB Bank and MBFI, Wextrust and Broadway Bank and their Named Officers and Directors)

196. Plaintiffs repeat and reallege and incorporates by reference the allegations in ¶¶ 1 through 195

above with the same force and effect as if herein set forth.

197. Defendants MB Bank and MBFI and Broadway Bank and their named officers and directors knew

there was an illegal or improper object to be accomplished, i.e. to deprive Plaintiffs of their property through aiding

32

and abetting an illegal Enterprise and Ponzi Scheme by, among other things, in the case of Broadway Bank, aiding

and facilitating the Enterprise, and in the case of MB Bank and MBFI, succeeding to and thereby replacing one of

the said Enterprise participants and thereby continuing the illegal conduct, and in all instances, designed to seek to

seriously damage Plaintiffs and profit by such actions.

198. MB Bank (for itself and its parent, MBFI) claims to have succeeded to the rights, property and

business of Broadway Bank, a participant and member of the illegal Enterprise.

199. MB Bank as claimed “successor to Broadway Bank” has illegally sought to collect on fraudulent

notes and mortgage documents, which were obtained from Plaintiffs as a direct result of the illegal Enterprise and

related Ponzi scheme outlined in detail above.

200. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of said

Defendants efforts to illegally seize Plaintiff’s property and interfere with and ultimately destroy their businesses.

201. Furthermore, in this case, the MB Bank, MBFI and Broadway Bank Defendants, including banking

institutions and banking professionals, operate under the law, including, Federal Reserve Act, FIRA, FDIC ACT and

Securities Act, and pursuant to the public trust, and accordingly, they must be held to the highest fiduciary

responsibilities required of corporate officers. Therefore, here, given the circumstances and actions involved,

including MB Bank and MBFI Defendants’ Willful Blindness to the criminal and related conduct at issue, said

Defendants should properly be held the highest degree of culpability for breaches of their professional and fiduciary

duties.

202. As a result of said Defendants’ actions constituting aiding and abetting a RICO Enterprise, Plaintiffs

are now and will continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award

against the Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount of $

25,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 5

ACTION FOR DECEIT

(Against Wextrust, Broadway Bank, their successors, and their named officers )

203. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 202 above

with the same force and effect as if herein set forth.

204. Defendants MB Bank and MBFI and their named officers and directors knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs 56 W LLC, Guy Morris and INN of their property and

compensation through deceit, accomplished through a mode of conduct including the systematic violations of the

federal common law powers of the FDIC, and banking and securities laws including Federal Reserve Act, FIRA,

FDIC Act, RESPA, Securities Act .

205. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of MB

Defendants’ deceit.

206. As a result of said Defendants’ actions constituting deceit, Plaintiffs are now and will continue to

suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award against all the said Defendants,

jointly and severally, for actual, general, special, compensatory damages in the amount of at least $10,000,000 and

for punitive damages in an amount to be determined by the jury, plus the costs of this action, including attorney's

fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 6

ACTION FOR DURESS

33

(Against Defendants MB Bank and MBFI, Wextrust and Broadway Bank and their Named Officers and Directors)

207. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 206 above

with the same force and effect as if herein set forth.

208. Defendants MB Bank and MBFI and their named officers and directors knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs 56 W LLC, Guy Morris and INN of their property

through duress, accomplished through a mode of conduct including the systematic violations of the federal common

law powers of the FDIC, and banking and securities laws including Federal Reserve Act, FIRA, FDIC Act, RESPA,

Securities Act.

209. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of duress.

210. As a result of said Defendants’ actions constituting duress, Plaintiffs are now and will continue to

suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award against all the Defendants,

jointly and severally, for actual, general, special, compensatory damages in the amount of at least $ 10,000,000 and

for punitive damages in an amount to be determined by the jury, plus the costs of this action, including attorney's

fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 7

ACTION FOR NEGLIGENT MISREPRESENTATION

(Against Defendants MB Bank and MBFI , Wextrust, Broadway Bank and their Named Officers and Directors)

211. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 210 above

with the same force and effect as if herein set forth.

212. Defendants MB Bank and MBFI and their named officers and directors knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs 56 W LLC, Guy Morris and INN of their property

through negligent misrepresentation, accomplished through a mode of conduct including the systematic violations of

the federal common law powers of the FDIC, and banking and securities laws including Federal Reserve Act,

FIRA, RESPA, FDIC Act, Securities Act.

213. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of negligent

misrepresentation.

214. As a result of said Defendants’ actions constituting intimidation, Plaintiffs are now and will

continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award against the

Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount of at least $

10,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 8

ACTION FOR ABUSE OF LEGAL PROCESS

(Against Defendants Broadway Bank, MB Bank and MBFI and their Officers and Directors)

215. Plaintiffs repeat and realleges and incorporate by reference the allegations in ¶¶ 1 through 214

above with the same force and effect as if herein set forth.

216. Defendants Broadway Bank, MB Bank and MBFI, acting through their counsel, initially the firm of

Nesenoff & Miltenberg, LLP and subsequently the firm of Katten Muchin Rosenman LLP knew there was an illegal

or improper object to be accomplished; to deprive Plaintiffs of their property through abuse of legal process,

including the filing of a fraudulent mortgage foreclosure action without certifying the validity of the note and

mortgage as required under the laws and court procedures of New York State.

34

217. Plaintiffs have direct harm and damages, as stated supra, as a direct result of abuse of legal process.

218. As a result of said Defendants’ actions constituting abuse of legal process, Plaintiffs are now

suffering and will continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an award

against the said Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount

of $5,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 9

VIOLATION OFRICO ACT ( 18 USC§ 1962 (c))

(Against Wextrust, Broadway Bank, any of their successors, and the officers and directors of said parties, and

related participants, including Doe Defendants)

219. Plaintiffs repeat in reallege the allegations set forth and paragraphs 1 to 218 of the complaint as if

stated fully herein.

220. The full scope of Defendants' conspiracy and wrongdoing is unknown and Plaintiffs'

investigation of same continues. As the nature of Defendants’ conduct and information is uniquely within the

possession of the Defendants and their accomplices, known and unknown, the full extent of their fraudulent and

corrupt enterprise, and the participants therein, will not be known until full, complete and comprehensive discovery

is undertaken and concluded.

RICO Persons

221. 56 W LLC, Guy Morris, and INN are persons under 18 USC §§ 1961(3) and 1964 (c).

222. Based on information and belief, for the purpose of 18 USC Sec 1962, the RICO Persons included

in this complaint are as follows: Defendants Wextrust , Broadway Bank, Byers, Shereshevsky, and Cohen.

RICO Enterprise

223. For the purpose of 18 USC Sec 1962(c), at all relevant times, at least the following “Enterprise”

existed within the meaning of 18 USC §1961 (4). The Enterprise is an entity that engaged in activity affecting and

interstate and foreign commerce and was an enterprise at all times relevant to this complaint. The Defendants

participated in the operation and management of each aspect of this Enterprise, and conducted its affairs through

their pattern of unlawful activity within the meaning of 18 USC § 1961 (1)(B), 1341, 1343, and 1344, including

execution of their scheme to defraud, corrupt, cheat, steal and convert the property and money of Plaintiffs 56 W

LLC, Guy Morris, and INN and others. Each Defendant has knowingly and intentionally engaged in acts to further

the conspiracy to defraud Plaintiffs and others in the state of New York and other states in United States.

Membership of the Enterprise

224. The Enterprise is an association in fact comprised of corporate members and individuals comprised

of the Defendants within the meaning of 18 USC Sec 1961(4). Each of the Defendants was associated with the

business of the Enterprise, through a pattern of unlawful activity within the meaning of 18 USC §§ 1961 (1) (B),

1961 (3), 1961(4), 1961(5), 1962(C), and 1964 (C).

225. Members of the Enterprise, who intentionally engaged since 2007 in the plan to defraud the

Plaintiffs by operating as a real estate financing entity and money lending joint venture as evidenced by a series of

agreements and other documents such as a so-called Participation Agreement, and the statements and court filings of

the Receiver, include : Wextrust, Broadway Bank, Byers, Shereshevsky , and Cohen.

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226. Using the Enterprise, the RICO persons conducted, directed, and participated in the conduct of the

Enterprise’s affairs through a pattern of racketeering activity and a series of predicate acts for the purpose of

conducting the unlawful activities as set forth in detail in this Complaint.

227. Specifically, at all relevant times, the purposes of the Enterprise included the following:

(1) to allow individual Defendants to engage in numerous sham financial transactions, which they had no

intention of completing;

(2) to conceal Defendants’ improper, illegal, and fraudulent enterprise and conspiracy from Plaintiffs and their

associates and business partners, various Federal and state licensing authorities and law enforcement agencies by

using various corporate names and sham entities, paying some invoices in part, secretly diverting and comingling

funds, failing to disclose and avoiding law suits and judgments;

(3) to accept from Plaintiffs closing, finders’, consulting, financing and other fees, advances, deposits, and

other charges and security interests in their properties;

(4) to convert the fees, deposits, etc. for the use and benefit of the Defendants and the Enterprise;

(5) to take advances in payment of commissions and related fees from Plaintiffs and secretly divert certain of

such monies;

(6) to channel such converted, misappropriated, co-mingled, and ill-gotten funds for purposes connected with

operating a sham real estate financing company by the Enterprise and Defendants, and

(7) to distribute and parcel out the converted, misappropriated, co-mingled, and ill-gotten funds in order to

provide financial or other beneficial rewards to members of the Enterprise and the Defendants and others assisting

the Defendants.

228. The members of the Enterprise, specifically including Wextrust and Broadway Bank and their

officers, including Defendants Byers, Shereshevsky and Cohen, and others also had a plan to defraud, convert, and

misappropriate certain promissory notes, which had no intrinsic value. The bogus notes were provided by Wextrust,

which was insolvent from 2005 and existing only on monies obtained through the Wextrust Ponzi scheme, in

exchange for other notes secured by valuable real estate. The success of this plan depended on the creation of the

bogus notes, which then could be exchanged for other notes secured by valuable real estate. One of the main

purposes of this plan was to defraud bank regulatory authorities.

Continuity of the Enterprise

229. The Enterprise’s regular way of doing business involved the members engaging in phony financial

transactions involving taking in substantial deposits, finder’s and administrative fees, pre-paid interest charges,

closing fees, interest surcharges, extension fees, all toward projects that the members did not intend to complete or

could not complete due to lack of readily available funds. As part of the plan, the Defendants also used some of

these monies to pyramid or finance other projects as part of a Ponzi scheme, all in violation of applicable laws,

licenses, investment fund obligations, contractual obligations and requirements and state and Federal laws and

regulations.

230. The Enterprise was ongoing since at least 2006 when Wextrust and Broadway Bank created the joint

venture structure for arranging loans, one of which was extended to Plaintiffs 56 W LLC and Guy Morris. The

Defendants systematically solicited and entered into financing contracts such as that signed with Plaintiffs. After

collecting substantial fees, Wextrust would cease providing funding necessary for companies such as 56 W LLC to

complete their construction projects.

231. Defendants would use the monies taken from contracting parties such as the Plaintiffs in the form of

transaction fees, consulting fees, pre-paid commissions, pre-paid interest, and advances, which would be transferred

36

and co-mingled in a general account to be used for non-related, personal and corporate uses, constituting illegal

misappropriation and diversion of funds.

Culpability of the Defendants in the Enterprise

232. Some of the members of the Enterprise, including each of the Defendants named, at least one of

whom was previously convicted of bank fraud, acted with culpability in their scheme. Some members may have

operated as unwitting instruments, who negligently, falsely, or improperly participated in the illegal activities. In all

cases, the members either knew of the illegal activities, or, based on their position and professional and business

knowledge, experience and other responsibilities, should have known that others in the Enterprise were engaging in

illegal conduct.

Racketeering Acts Related to Mail and Wire Fraud

233. Upon information and belief, at all times relevant to this complaint, as previously alleged herein,

and continuing until the time of filing this Complaint, in the Southern District of New York and elsewhere,

Defendants and others, known and unknown to date, knowingly, purposely and intentionally devised a scheme

related to the real estate financing business and artifice to defraud, and obtained money and property from Plaintiffs

and others by means of false and fraudulent pretenses, representations, and promises, and omissions of material

facts, knowing that the pretenses, representations, were false when made, or in the case of omissions, created a false

representation by purposely not disclosing full information as required.

234. Upon information and belief, it was further part of the said scheme and artifice that, in order to

conceal the fraudulent enterprise that the Defendants made numerous statements through electronic and postal

mailings, deposited checks accepted in New York and other states, and processed the same deposits electronically

through banks in various states, including New York, Illinois and Virginia.

235. Upon information and belief, it was further part of the said scheme and artifice that, in order to

conceal the fraudulent enterprise, the Defendants would transfer funds of the Plaintiffs and others into other projects

run by the Defendants.

236. Upon information and belief, Defendants had no interest in completing the financings such as that of

Plaintiffs as required by their contracts, and instead set about to accept payments without the intention of actually

funding the completion of the work as required by contract.

237. Upon information and belief, it was further part of the said scheme and artifice that Defendants and

their co-conspirators would mail and transmit and distribute via electronic mail, regular United States mail,

proposals, commitment letters, information, contracts and related documents, checks, and wire payments to further

the fraudulent illegal activities of the enterprise.

238. Upon information and belief, it was further part of the said scheme and artifice that Defendants and

their co-conspirators would and did misrepresent, conceal, and hide and cause to be misrepresented, concealed and

hidden, the purpose of the fraudulent enterprise and the acts done in furtherance of a scheme to defraud Plaintiffs

and others.

239. Upon information and belief, it was a further part of the said scheme and artifice, and in furtherance

thereof, that Defendants would and did communicate with each other and with their co-conspirators and others, in

person, by mail, and by interstate electronic communications and other interstate and foreign wire facilities

regarding contracts, construction activities, payments, acts of fraud and ways to avoid detection by Plaintiffs and

others.

240. Upon information and belief, for the purpose of executing and attempting to execute the scheme or

artifice described herein, Defendants and their co-conspirators would and did knowingly place and caused to be

placed in any post office, or authorized depository for mail matter and things to be sent and delivered by the United

States Postal Service (“USPS”), and private mail carriers; took and received therefrom such matters and things; and

37

knowingly caused to be delivered by mail according to the direction thereon, and at a place at which it was directed

to be delivered by the person to whom it was addressed, any such matter and thing in violation of 18 USC § 1341,

including, but not limited to, the instances referenced herein.

241. Upon information and belief, for purposes of executing and attempting to execute that scheme and

artifice, Defendants and their co-conspirators would and did knowingly transmit, and caused to be transmitted in

interstate and foreign commerce, by means of wire communications, on numerous occasions, and at numerous

locations, allegedly sent by members of the Enterprise using their real or false or fictitious names to various

consultants, lawyers, creditors, partners, business associates, contractors, investors or others, to purchase and pay

for, deposit, transfer, invest, sell, hypothecate, buy construction and other materials, supplies and equipment and

other related an unrelated goods and services for the Enterprise and for of the Defendants and others (collectively

“transmissions”) in violation of 18 USC § 1343, including, but not limited to, the representative transmissions

referenced herein.

a) On or about July 7, 2007, Wextrust, at the direction of Defendants Byers, Cohen and others,

forwarded via wire (telefax) and mail from its New York offices at 114 West 47th

Street the Initial Commitment

Letter to Plaintiffs 56 W LLC and Guy Morris, which fraudulently misrepresented that Wextrust was a properly

organized, fully functioning and funded investment company that was capable of arranging, organizing and

extending a $10.75 million credit facility to Plaintiffs as set forth in the said letter, when in fact the company was not

legally authorized to conduct business in New York State, and at the time and for extended time predating the letter

had in fact been insolvent, and was only continuing in business by using comingled and misappropriated funds

raised through an international Ponzi type fraud at the direction of Defendants Byers, Shereshevsky and others.

b) On or about August 9, 2007, Wextrust, at the direction of Defendants Byers, Cohen and others,

forwarded via wire (telefax) and mail from its New York executive offices at 114 West 47th

Street to Plaintiffs 56 W

LLC and Guy Morris various documents, including the final Commitment Letter (“Wextrust Commitment Letter”),

which fraudulently misrepresented that Wextrust was a properly and legally organized, fully functioning and funded

investment company that was capable of arranging, organizing and extending a $11.2 million credit facility (the

Enterprise Loan) to Plaintiffs as described in the said letter, when in fact the company was not legally authorized to

conduct business in New York State, and at the time and for extended time predating the transmission of documents

and telephone communications, had in fact been insolvent and was only continuing in business by using comingled

and misappropriated funds raised through an international Ponzi type fraud at the direction of Defendants Byers,

Shereshevsky and others.

c) On or about September 14, 2007, Wextrust, at the direction of Defendants Byers, Cohen, and

others participating in the Enterprise Loan forwarded via wire (telephone, telefax, email) and mail from its New

York offices at 114 West 47th

Street to Plaintiffs 56 W LLC and Guy Morris various loan closing documents,

including the following:

Note and Splitter Agreement

Substitute Note A

Substitute Note B

Amended and Restated Land Loan Agreement

Amended and Restated Land Loan Note

Amended and Restated Land Loan Mortgage, Assignment

of Leases and Rents

and Security Agreement

Building Loan Agreement

Building Loan Note

Building Loan Mortgage, Assignment of Leases and Rents,

and Security

Agreement

Project Loan Agreement

Project Loan Note

Project Loan Mortgage

Amended and Restated Loan Agreement

Amended and Restated Loan Note

Amended and Restated Loan Mortgage, Assignment of

Leases and Rents and

Security Agreement

Assignment of Leases and Rents

Collateral Assignment of Agreements Affecting Real

Estate

Assignment of Construction Contract

Consent to Assignment of Construction Contract

Contractor's Certificate

Assignment of Architect's Agreement and Plans and

Specifications

Consent to Assignment of Architect's Agreement and

Plans and Specifications

Architect's Certificate

38

Pledge and Security Agreement

Subordinate Pledge and Security Agreement

Pledge and Security Agreement re: Trust Account

Environmental Indemnification Agreement

Section 255 Affidavit for Assignment of Leases and

Rents

Pledge and Security Agreement (LLC Interests)

Disbursement Request and Authorization

Notice of Final Agreement

Resolution

Privacy Notice

Borrowers Certificate

Agreement to Provide Insurance

in association with which Wextrust, among other things, through implied representations and warranties, fraudulently misrepresented

that it was a properly organized, fully functioning and funded investment company that was capable of arranging, organizing and

extending, directly and indirectly, a $11.2 million credit facility (the Enterprise Loan) to Plaintiffs as described in the Wextrust

Commitment Letter, when in fact the company was not legally authorized to conduct business in New York State, and at the time, and

for extended time predating the transmission of documents and telephone communications, had in fact been insolvent dating to 2005

and was only continuing in business by using comingled and misappropriated funds raised through an international Ponzi type fraud at

the direction of Defendants Byers, Shereshevsky and others, and used or caused the use of the mails and/or wire communications in

connection with transmitting and/or delivering the said written communications, documents, including contracts, exhibits and related

writings, emails and other electronic communications and other related materials in furtherance of the continuing pattern of fraud and

other related illegal activities as conducted by the Enterprise, that included among its members Wextrust and Broadway Bank.

d) On or about September 16, 2007, Wextrust, at the direction of Defendants Byers, Cohen, and others forwarded and

exchanged via wire (telephone, telefax, email) and mail from its New York offices at 114 West 47th

Street to Plaintiffs 56 W LLC and

Guy Morris various Wextrust-Broadway Bank joint venture closing documents, including the following:

Loan Subordination, Participation and Servicing Agreement

in association with which Wextrust, through implied representations and warranties, fraudulently misrepresented that it was a properly

organized, fully functioning and funded investment company that was capable of arranging, organizing and extending, directly and

indirectly, a $11.2 million credit facility (the Enterprise Loan) to Plaintiffs, when in fact the company was not legally authorized to

conduct business in New York State, and at the time, and for extended time predating the transmission of documents and telephone

communications, had in fact been insolvent and was only continuing in business by using comingled and misappropriated funds raised

through an international Ponzi fraud as directed by Defendants Byers, Shereshevsky and others, and used or caused the use of the

mails and/or wire communications in connection with transmitting and/or delivering the said written communications, documents,

including contracts, exhibits and related writings, emails and other electronic communications and other related materials in

furtherance of the continuing pattern of fraud and other related illegal activities as conducted by the Enterprise that included among its

members Wextrust and Broadway Bank.

e) On or about September 20, 2007, Wextrust, at the direction of Defendants Byers, Cohen, and others forwarded via

wire (telephone, telefax, email) and mail from its New York offices at 114 West 47th

Street to Plaintiffs 56 W LLC and Guy Morris

various closing documents, including documents from joint venture partner, Broadway Bank, and the following:

NOTICE OF FINAL AGREEMENT FOR BROADWAY BANK'S AND WEXFORD/HPC MORTGAGE FUND, L.P.

LOANS TO 56 WALKER,LLC AND GUY W. MORRIS

in association with which Wextrust, through implied representations and warranties, fraudulently misrepresented that it was a properly

organized, fully functioning and funded investment company that was capable of arranging, organizing and extending, directly and

indirectly, a $11.2 million credit facility (the Enterprise Loan) to Plaintiffs, when in fact the company was not legally authorized to

conduct business in New York State; and at the time, and for extended time predating the transmission of documents and telephone

communications, had in fact been insolvent and was only continuing in business by using comingled and misappropriated funds raised

through an international Ponzi type fraud as directed by Defendants Byers, Shereshevsky and others, and used or caused the use of the

mails and/or wire communications in connection with transmitting and/or delivering the said written communications, documents,

including contracts, exhibits and related writings, emails and other electronic communications and other related materials in

furtherance of the continuing pattern of fraud and other related illegal activities as conducted by the Enterprise that included among its

members Wextrust and Broadway Bank.

39

f) On or about September 21, 2007, Wextrust, at the direction of Defendants Byers, Cohen and others, forwarded via

wire (telefax) and mail from its New York offices at 114 West 47th

Street to Plaintiffs 56 W LLC and Guy Morris various execution

copies of documents related to the closing of the Enterprise Loan and closed the transaction (partly in escrow), which fraudulently

misrepresented that Wextrust was a properly organized fully functioning and funded investment company that was capable of

extending a $11.2 million credit facility (the Enterprise Loan) to Plaintiffs as described in the said documents, when in fact the

company was not legally authorized to conduct business in New York State, and at the time and for extended time predating the

transmission of documents and telephone communications, had in fact been insolvent, and was only continuing in business by using

comingled and misappropriated funds raised through an international Ponzi type fraud as directed by Defendants Byers, Shereshevsky

and others through the illegal Enterprise that included among its members Wextrust and Broadway Bank.

g) On or about September 28, 2007, Wextrust, at the direction of Defendants Byers, Shereshevsky, Cohen, and others

forwarded via wire (telephone, telefax, email) from the Wextrust Chicago and New York offices to Plaintiffs 56 W LLC and Guy

Morris various communications concerning the status of the purported Closing of the Enterprise Loan documents, which among other

reports included information that the loan amounts had been taken from comingled funds in certain cases and had, in the case of

$1.477 million interest reserve, not been funded.

h) On or about October 16, 2007, Wextrust, through Defendants Byers, Cohen, Shereshevsky, and others forwarded

via wire (telephone, telefax, email) from the Wextrust Chicago and New York offices to Plaintiffs 56 W LLC and Guy Morris various

communications concerning the status of the attempted drawdown of construction funds by Plaintiffs as provided in the Enterprise

Loan documents, which among other reports included information that the requested amounts had been taken from comingled funds in

certain cases and had, in the case of $120,389.33, not been funded, and confirmed that the Wextrust account could not pay

distributions or future draws or accrued interest and fee income.

i) On or about November 15, 2007, Wextrust, through Defendants Cohen, Shereshevsky and others forwarded via wire

(telephone, telefax, email) from and to the Wextrust Chicago and New York offices various communications concerning the financial

condition of Wextrust, which among other reports included information that the company was insolvent and had been regularly

running losses of more than $1 million per month.

j) On or about July 21, 24, 31 2008, Wextrust, Broadway Bank through Defendants Cohen, Shereshevsky, and others

forwarded via wire (telephone, telefax, email) from the Wextrust and HPC offices in Chicago and New York to Plaintiffs 56 W LLC

and Guy Morris various communications to Plaintiffs and their representatives concerning the payment of $356,000 in interest and

extension fees as referenced in the Enterprise Loan at a time when the SEC was in the process of proceeding to place Wextrust in

Receivership, and without providing information confirming that Wextrust was insolvent and without the ability to continue as a going

concern, and could not pay expenses as they were incurred.

k) On or about August 8, 2007 Wextrust, Broadway Bank, through Defendants Cohen and others forwarded via wire

(telephone, telefax, email) from the Wextrust offices in Chicago and New York to Plaintiffs 56 W LLC and Guy Morris various

communications, including an Addendum to the Participation Agreement, misrepresenting the circumstances identified as leading to

the change of control of the joint venture and failing to provide Plaintiffs and others information confirming that Wextrust was

insolvent and without the ability to continue as a going concern, and could not pay expenses as they were incurred.

l) On or about September 21 and 22 2008, Wextrust, Broadway Bank, through Defendants Cohen and others

forwarded via wire (telephone, telefax and email) from the Wextrust offices in Chicago and New York to Plaintiffs 56 W LLC and

Guy Morris various communications to Plaintiffs and their representatives, concerning the payment of $356,000 in interest and

extension fees as demanded by the Enterprise Lenders, which amount was paid by 56 W LLC, and failing to provide Plaintiffs and

others information confirming that Wextrust had been insolvent and without the ability to pay expenses as they were incurred and to

continue as a going concern dating to 2005.

Defendants Use of the Telephone and Wires to Further the Scheme

242. The following constitutes samples of regular communications:

Defendants would place calls to and receive calls from Plaintiffs to induce them to make further payments and then instead of

utilizing the money with respect to the 56 Walker Street Landmark Premises condo conversion project, they would keep the money for

themselves or others, or they would pay some out for other projects, or provide working capital to the Enterprise. Other predicate acts

by Defendants, including, but not limited to, Wextrust, Byers and Cohen, in violation of 18 USC 1341, 18 USC 1343 and/or 18 USC

1344 undertaken in furtherance of a scheme or artifice to defraud with the specific intent to defraud, included, but are not limited to:

a) maintaining contacts by telephone and conspiring by mail or wireless communications in furtherance of the aforesaid

fraudulent activities, including those specified in ¶ 241 supra.

40

b) transmitting a series of fraudulent agreements and other documents by mail and wireless communications, including

those referenced in ¶ ¶241 (c),(d) and (e) supra with the reasonable and foreseeable result that business agreements and related

activities with and/or in furtherance of the continuing pattern of fraud and other related illegal activities.

c) creating bogus domestic and foreign corporate and other fake entities by mail and additional wire communications in

connection with and/or in furtherance of the continuing pattern of fraud and other related illegal activities including a series of

partnerships, limited liability companies and other such entities, and operating them as “sham” companies (see ¶241 and footnote 36

supra).

d) executing and exercising consents, assignments, resolutions, authorizations and agreements by mail and/or wire

communications in connection with and/or in furtherance of the continuing pattern of fraud and other related illegal activities,

including those referenced in ¶¶ 241 (a)-(l) supra.

e) opening domestic and foreign bank accounts by mail and/or wire communications in connection with and /or in

furtherance of the continuing pattern of fraud and other related illegal activities, including, among others, accounts at Wachovia Bank

under the name Wextrust and related names.

f) transferring and / or causing to be transferred funds by mail and/or wire communications in connection with an/or in

furtherance of the continuing pattern of fraud and other related illegal activities, including using accounts at Wachovia Bank, among

others under the name Wextrust and related names.

g) using notes, mortgages and other financial instruments, both domestically and internationally, by mail and/or wire

communications with the reasonable and foreseeable result that the corresponding payments and money transfers were made by mail

and/or wire communications in connection with in/or in furtherance of the continuing pattern of fraud and other related illegal

activities, including those referenced in ¶¶ 241 supra.

h) using the mail and/or wire communications to convey fraudulent representations concerning certain real estate and other

related transactions in connection with and/or in furtherance of the continuing pattern of fraud and other related illegal activities,

including those specified in ¶¶ 241, supra

Pattern of Activities

243. Each communication, transmission, money transfer, check endorsement and deposit received by Defendants during

the period beginning in 2007 and after constituted a separate execution of the Enterprise scheme through mails and interstate

communications.

244. Each such communication of the Enterprise and the Defendants accomplished, among other things, the purpose of

retaining money as derived from the financing scheme by the Defendants in the form of increased revenue and improper benefits to

them.

245. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC, and its lessee INN, and Guy Morris beginning in or about June 2007, Defendants, using wire

communications, falsely represented to the Plaintiffs their financial standing, licensing, qualifications, capacity and ability to arrange,

organize and provide financing for the 56 Walker Street Landmark Premises condo construction project, and further failed to inform

Plaintiffs of certain secret agreements among the Defendants, including fee sharing arrangements, as well as the prior criminal bank

fraud convictions of at least one of the principals of the fraudulent Enterprise.

246. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, beginning in or about June 2007, Defendants utilized wire communications to forward to

Plaintiffs an initial Enterprise Loan Commitment Letter signed by Defendant Cohen and authorized by Defendants Byers and

Shereshevsky, which contained fraudulent misrepresentations and outlined the terms and conditions under which the RICO Enterprise

would supply a loan in the amount of approximately $10.75 million to fund the final phase of construction of the 56 Walker Street

condo conversion, such loan to have a 12 month the maturity date.

247. In furtherance of a scheme or artifice to defraud, and with the specific intent to defraud Plaintiffs 56 Walker LLC and

Guy Morris beginning in or about August 2007, Defendants utilized wire and/or mail communications to forward to Plaintiffs a

second and final Enterprise Loan Commitment Letter signed by Defendant Cohen, and approved by Defendants Byers and

Shereshevsky, which contained fraudulent misrepresentations and outlined the terms and conditions under which the RICO Enterprise

41

would arrange, organize and provide a loan in the amount of approximately $11.3 million to fund the final phase of construction of the

56 Walker Street Landmark Premises condo conversion, such loan to have a 9 month maturity date, with all construction funds to be

provided to Plaintiffs by late 2007, so as to allow sufficient time to complete construction and market the four condo apartment units,

and close on their sale prior to the June 28, 2008 maturity date of the loan offered by the Enterprise.

248. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 W LLC and Guy Morris, beginning in or about September 21, 2007, Defendants Byers, Cohen, Shereshevsky and others,

via wire communications, closed the RICO Enterprise Loan with Plaintiffs using, among others, comingled funds, but, owing to a lack

of capital, was forced to close partially in escrow, pending receipt of necessary funds via wire from various domestic and foreign

sources, including investors in Israel raised through fraudulent schemes and devices, since Wextrust lacked the necessary funds to

meet current and future requirements under the said loan agreements.

.

249. Upon information and belief, in furtherance of a scheme and artifice to defraud and with specific intent to defraud

Plaintiffs 56 W LLC and Guy Morris, in order to close the Enterprise Loan, the Defendants, including Byers, Shereshevsky, and

Cohen, via wire communications, provided Plaintiffs with commingled funds illegally raised from various domestic and foreign

investors and other Wextrust investment transactions for other purposes, including the use of the proceeds of the so-called Delli loan

transactions in Texas to fund the closing of the Enterprise Loan as referenced in the email of Wextrust officer Perri Knight in ¶ 76

supra. These communications are referenced at footnote ¶ 75 supra included a series of emails among Defendants Byers and Cohen

confirming the need to secure additional funding from Broadway Bank to meet Wextrust’s obligations under the Enterprise Loan.

250. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, in or about October 2007, in order for Plaintiffs to receive funds to pay for construction

costs under the Enterprise Loan, the Defendants using wire communications transferred commingled funds illegally raised from

various domestic and foreign investors, but in so doing, only provided $104,812 financing of the $1.2 million budgeted pursuant to the

Enterprise Loan agreements.

251. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, in or about November 2007, in order for Plaintiffs to receive funds to pay for construction

costs under the 56 Walker loan, the Defendants using wire communications transferred commingled funds illegally raised from

various domestic and foreign investors, but in so doing only provided approximately $100,000 financing of the $1.2 million budgeted

to be provided by November 2007 pursuant to the Enterprise Loan agreements.

252. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, in or about December 2007, when Plaintiffs sought to receive funds to pay for construction

costs under the Enterprise Loan, Wextrust and the Defendants, using wire communications, and while continuing to use comingled

funds illegally obtained from a continuing Ponzi scheme for other purposes, including payment of operating expenses, failed to

provide such funding to Plaintiffs in direct violation of the terms of their Loan agreements with the Enterprise, which required that the

entire $1.2 million budgeted for the final stage of construction be provided no later than by November – December 2007.

253. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 W LLC and Guy Morris, from November 29, 2007 and continuing to March 11, 2008, the Enterprise, while using wire

communications involved in comingling funds illegally obtained from a continuing Ponzi scheme, failed to provide any of the

remaining balance of the $1.2 million in budgeted funding necessary for the continuing construction of the 56 Walker Street condo

project.

254. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, in order for Plaintiffs to receive funds to pay for construction costs under Enterprise Loan,

the Defendants used wire communications to transfer commingled funds illegally raised from various domestic and foreign investors,

but in so doing provided only a fraction the $1.2 million budgeted and required to be provided by November-December 2007.

255. Upon information and belief, in furtherance of a scheme or artifice to defraud, and with the specific intent to defraud

Plaintiffs 56 Walker LLC and Guy Morris, in or about July and August 2008, Defendants Wextrust, acting through Defendants Byers,

used wire communications and entered into a plan or scheme together with Broadway Bank, and others using fraud to seek to collect

and did collect additional monies from Plaintiffs, including excessive interest charges, extension, legal and other fees.

256. Upon information and belief, at this same time, Wextrust was being sued by some of its shareholders for securities

fraud and failing to disclose the prior criminal conviction of its COO, the SEC and Department of Justice were completing necessary

procedures to seize Wextrust and place it in receivership, other Wextrust real estate projects were not being funded and as a result

42

were being foreclosed, Wextrust failed to pay expenses as they became due, none of which information was communicated to

Plaintiffs.

257. Upon information and belief , the foregoing predicate acts taken together constitute a pattern of unlawful activity

within the meaning of 18 USC § 1961 (1) (B). The predicate acts are both related and continuous since at least July 2006. The acts

are connected to one another as part of a scheme to accomplish a uniform purpose of defrauding Plaintiffs and others of the benefits of

project financings and Plaintiffs of income and payments from the 56 Walker Street condo conversion project. The repeated nature of

this conduct during the period of the scheme, and the threat of similar conduct continuing in the, future makes the acts continuous.

Summary of 18 USC § 1964 Allegations

258. Upon information and belief, in connection with the activities giving rise to these claims, the Defendants at all

relevant times acted corruptly, with malice, intent and knowledge and in reckless disregard of Plaintiffs’ rights.

259. Upon information and belief, at all relevant times, the Enterprise as defined herein was engaged in interstate and

foreign commerce in various states, including New York, Illinois, New Jersey and Virginia.

260. Upon information and belief, as set forth above, the Defendants at all relevant times in connection with the activities

giving rise to these claims, conspired with each other, and with others, as yet unknown, to engage in the various activities set forth

herein, and aided and abetted one another in these activities, all in violation of the statutes as set forth herein, and conspired to do so in

violation of 18 USC § 1962 (d). In addition, unknown individuals as yet named as Defendants, conspired with the Defendants as

alleged herein.

261. Upon information and belief, each of the Defendants agreed to the operation of the conspiracies to defraud, corrupt,

cheat, steal, obtain by fraud and convert the property and money of the Plaintiffs and others.

262. Upon information and belief, as set forth above, at all relevant times, and in furtherance of and for the purpose of

executing the scheme and artifice to defraud, corrupt, cheat, steal, obtain by fraud and convert the money or property of Plaintiffs and

others, the Defendants, on numerous occasions used, and caused to be used, the mails and wire communications. Each such use of the

emails and wire communications in connection with and in furtherance of the scheme constitutes the offense of mail fraud in violation

of 18 USC §§ 2 and 1341, and the offense of wire fraud in violation of 18 USC §§ 2 and 1343.

263. Upon information and belief, as set forth above, at all relevant times and in furtherance of and for the purpose of

concealing the delivery of, and aiding the execution of the scheme and artifice to defraud the Plaintiffs, the Defendants, on numerous

occasions, did engage in misleading conduct towards another person, to wit, the creation of numerous corporations engaged in

building construction financing, acquisition and other financings and investments, and specifically project financing, with the intent to

hinder, delay, and prevent the communication to law enforcement officers and local regulatory officials of information relating to the

commission of, and possible commission of various illegal acts.

264. Upon information and belief, the Defendants used the separate individual companies in a common plan to defraud

Plaintiffs and others, accept payment for work they did not intend to fully or properly perform, avoid prosecution, and scheme among

themselves and with other participants to defraud Plaintiffs, while attempting to mislead regulatory officials to avoid prosecution.

Violation of 18 USC § 1962 (c)

265. Upon information and belief, each of the named Defendants was associated with this Enterprise and has conducted or

participated, directly or indirectly, in the management operation of the affairs of the Enterprise, a scheme to defraud financings for

construction projects, including the 56 Walker Street Landmark Premises condo conversion, which it did not intend to perform,

diversion of funds from Plaintiffs to members of the Enterprise, securing funds from the Plaintiffs and others for use in other projects

by the Enterprise, inter alia, through a pattern of unlawful activity within the meaning of 18 USC §§ 1961 (1) (B), 1961 (5) in 1962

(c), to wit:

A. Multiple, repeated and continuous instances of mail fraud in violation of 18 USC §§ 2 and 1341; and

B. Multiple repeated and continuous instances of wire fraud in violation of 18 USC §§ 2 and 1343 .

266. Plaintiffs suffered injury to their businesses and /or property within the meaning of 18 USC§ 1964 (c) by reason of

the violation of statutes as set forth above and committed by the Defendants.

Count 10

VIOLATION OFRICO ACT

43

(Conspiracy in violation of 18 USC§ 1962 (d) to violate 18 USC§ 1962 (c))

(Against Wextrust, Broadway Bank, any of their successors, and the officers and directors of said parties, and related participants,

including Doe Defendants)

267. Plaintiffs reallege paragraphs 1 -256 as set forth above.

268. Plaintiffs are “persons” under 18 USC§§ 1963 (3) and 1962 (c)

269. Each of the Defendants is a “person” under 18 USC §§ 1963 (3) and 1962 (3)

270. The following enterprise constitutes an “Enterprise” within the meaning of 18 USC §§ 1961 (4) and 1962 (c), which

enterprise was engaged in activities affecting interstate and foreign commerce at all times relevant to this Complaint:

Wextrust, Broadway Bank, Byers, Shereshevsky, Cohen and certain of their officers and directors.

271. Upon information and belief, each of the Defendants was associated with this Enterprise and has conducted or

participated, directly or indirectly, in the management operation of the affairs of the Enterprise, a scheme to defraud financings for real

estate and construction projects, including the 56 Walker Street Landmark Premises condo conversion, which it did not intend to

perform, and the diversion of funds from Plaintiffs to members of the Enterprise and others, and the securing of funds from the

Plaintiff for use in some other projects for the Enterprise, inter alia, through a pattern of unlawful activity within the meaning of 18

USC §§ 1961 (1) (B), 1961 (5) in 1962 (c), and 1962 (d) to wit:

A. Multiple, repeated and continuous instances of mail fraud in violation of 18 USC§§ 2 and 1341;

B. Multiple repeated and continuous instances of wire fraud in violation of 18 USC§§ 2 and 1343 . and

C. Multiple, repeated and continuous instances of violations of 18 USC§§ 2 and 1344

272. Plaintiffs suffered injury to their businesses and /or property within the meaning of 18 USC § 1964 (c) by reason of

the commission of the unlawful activities within the meaning of 18 USC § 1961 (1) (B) that were overt acts in violation of 18 USC §

1962 (d) committed by the Defendants.

Count 11

VIOLATION OF RICO ACT

(Conspiracy in violation of 18 USC§ 1962 (d) to violate 18 USC§ 1962 (b))

(Against Wextrust, Broadway Bank, any of their successors, and the officers and directors of said parties, and related participants,

including Doe Defendants)

273. Plaintiffs reallege paragraphs 1-272 as set forth above.

274. Plaintiffs are “persons” under 18 USC§§ 1963 (3) and 1962 (c)

275. Each of the Defendants is a “person” under 18 USC§§ 1963 (3) and 1962 (3)

276. The following enterprise constitutes an “enterprise” within the meaning of 18 USC§§ 1961 (4) and 1962 (c), which

Enterprise was engaged in activities affecting interstate and foreign commerce at all times relevant to this Complaint:

Wextrust, Broadway Bank, Byers, Shereshevsky, Cohen and certain of their officers and directors

277. Upon information and belief, each of the Defendants was associated with this Enterprise and has conducted or

participated, directly or indirectly, in the management operation of the affairs of the Enterprise, a scheme to defraud financings for real

estate construction projects, including the 56 Walker Street Landmark Premises condo conversion, which it did not intend to perform,

diversion of funds from Plaintiffs to members of the Enterprise, securing funds from the Plaintiff for use on some other projects for

the Enterprise, inter alia, through a pattern of unlawful activity within the meaning of 18 USC§§ 1961 (1) (B), 1961 (5) in 1962 (c),

and 1962 (d) to wit:

A. Multiple, repeated and continuous instances of mail fraud in violation of 18 USC §§ 2 and 1341;

B. Multiple repeated and continuous instances of wire fraud in violation of 18 USC §§ 2 and 1343 ; and

C. Multiple, repeated and continuous instances of violations of 18 USC §§ 2 and 1344

278. The conspiracy set forth in the preceding paragraphs amounted to separate conspiracies by the Defendants with each

of the participants that also benefited from Defendants’ activities.

44

279. Plaintiffs were injured in their businesses or property within the meaning of 18 USC§ 1964 (c) by reason of the

commission of the unlawful activities within the meaning of 18 USC § 1961 (1) (B) that were overt acts in violation of 18 USC§ 1962

(d) committed by the Defendants.

280. Some of the members of the Enterprise, including each of the Defendants, acted with culpability in their scheme.

Other members were necessary instruments or were victims of the culpable members of the Enterprise.

281. Plaintiffs suffered injury to their businesses and /or property within the meaning of 18 USC§ 1964 (c) by reason of the

commission of the unlawful activities within the meaning of 18 USC § 1961 (1) (B) that were overt acts in violation of 18 USC § 1962

(d) committed by the Defendants.

COUNT 12

ACTION FOR FRAUD

(Against Named Defendants)

282. Plaintiffs repeat and re allege the allegations in ¶¶ 1 through 281 above with the same force and effect as if herein set

forth.

283. Upon information and belief, Wextrust participated in the Enterprise with Broadway Bank, and the other Defendants,

and is responsible to Plaintiffs for substantial damages, by the following acts and omissions:

a) Wextrust, an insolvent entity not registered to do business in New York, participated in the alleged formation of other entities

not registered to do business in New York, to organize, manage and administer the Enterprise Loan.

b) Wextrust, an insolvent entity not registered to do business in New York, participated with Broadway Bank in organizing,

processing, managing and administering the Enterprise Loan.

c) Wextrust acting with other Defendants, including Byers, Shereshevsky, Cohen and Doe Defendants, purposely withheld

construction funding under the Enterprise Loan from September 21, 2007 forward until Wextrust was placed in receivership in August

2008, thereby interfering with construction and delaying completion of the project in accordance with the agreed upon building

schedule.

d) Wextrust acting with other Defendants, including Byers, Shereshevsky, Cohen and Doe Defendants, purposely interfered with

the construction project and took arbitrary, capricious and unconscionable positions regarding funding, and refused to timely fund the

construction loan and where funds were provided, it used monies that were misappropriated, misdirected, comingled and fraudulently

obtained from various investors and other sources.

e) Wextrust organized, managed and facilitated illegal, improper and unconscionable actions of Broadway Bank, and others.

f) Wextrust entered the Enterprise joint operating agreement with Broadway Bank under which, among other things, Wextrust

managed a secret fund from which Wextrust received proceeds in the form of a secret rebate of approximately 25% of the hard money

interest charged by Broadway Bank and paid by 56 W LLC.

g) Wextrust acting other Defendants, including Doe Defendants illegally held back various monies including approximately

$640,000.00 of construction funding under the Enterprise Loan for which 56 W LLC was paying unconscionable, hard money interest,

thereby delaying the project until Wextrust went into receivership.

h) Wextrust was not properly licensed to do business in New York State by the Department of State.

i) Wextrust was not licensed by the New York State Banking Department to do business in the State of New York.

j) Other Wextrust entities were not properly licensed to do business in New York State and were not licensed by the New York

State Banking Department.

k) Wextrust failed to reveal to 56 W LLC that at least one of the Wextrust principals (Defendant Shereshevsky) had previously

pleaded guilty to participating in bank fraud and failed to secure state and federal licenses required to operate as a broker dealer and to

conduct similar financing services.

l) Wextrust failed to reveal to 56 W LLC that Wextrust had since 2005 been insolvent and was commingling, misdirecting and

misappropriating funds in violation of state and federal law and using the illegally obtained funds as needed in violation of its

agreements with investors.

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m) Wextrust participated in a pattern of activities with Broadway Bank and other Defendants, including Doe Defendants, involving

unsafe or unsound practices in violation of state and federal law by, among other things, operating while insolvent, conducting a

criminal enterprise, including a $270 million Ponzi Scheme, which defrauded over 1000 investors, and failed to register with the State

of New York or obtain licenses or permits from the New York Banking Department.

n) Wextrust also participated in a conspiracy to deceive and mislead bank examiners involving a fraudulent note for debt swap

where Wextrust (while insolvent) issued and exchanged a note in principal amount of $5.15 million to purchase a defaulted loan (the

Boardwalk Loan) from Broadway Bank before the bank examiners reviewed its books. In return for entering into this fraudulent note

for debt swap, Broadway Bank agreed to fund $8 million of the Enterprise Loan.

o) 56 W LLC has been the victim of Wextrust and associated individuals, including Defendants Byers, Shereshevsky and Cohen

and related entities, whose activities were facilitated by Broadway Bank and other Defendants, including Doe Defendants, which

wrongful acts have endangered Plaintiffs’ property holdings and caused significant damages.

p) Given the fact that Wextrust participated in other business dealings with Broadway Bank over an extended period of time,

Broadway Bank and its executives, directors and consultants must have known, or, given their specialized knowledge and expertise

in commercial banking, should have known that Wextrust was not in a financial or legal position to extend and administer a

construction loan to 56 W LLC (the Enterprise Loan), and in so participating with Wextrust, the common Enterprise recklessly

endangered 56 W LLC’s investment in the Walker Landmark Premises.

284. As a result of Wextrust’s actions, and those of its partners and joint venturers, including Broadway Bank, and the

other Defendants, Plaintiffs 56 W LLC and Guy Morris now and will continue to suffer irreparable injuries and monetary damages.

285. Plaintiffs are entitled to an award against Defendants for actual, general, special, compensatory damages in the

amount of at least $15,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

COUNT 13

BREACH OF CONTRACT

(Against Wextrust, Broadway Bank, their successors, and their named officers )

286. Plaintiffs repeat and re allege the allegations in ¶¶ 1 through 285 above with the same force and effect as if herein set

forth.

287. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of breaches of contracts, including

the Enterprise Loan Agreements and related contracts, including breach of the implied covenant of good faith and fair dealing by

Wextrust and its subsidiaries, entities and affiliates, Broadway Bank, Byers, Cohen, and other Defendants.

288. As a result of actions of Wextrust, Broadway Bank, and other Defendants which constitute breach of contract,

Plaintiffs are now suffering and will continue to suffer irreparable injuries and monetary damages.

289. 56 W LLC is entitled to an award against Wextrust for actual, general, special, compensatory damages in the amount

of at least $15,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action, including

attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

COUNT 14

ACTION FOR NEGLIGENCE

(Against Named Defendants)

290. Plaintiffs repeat and re-allege the allegations in ¶¶ 1 through 289 above with the same force and effect as if herein set

forth.

291. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of the reckless and negligent acts

of Defendants, Plaintiffs are now suffering and will continue to suffer irreparable injuries and monetary damages.

292. Plaintiffs are entitled to an award against Wextrust, general, special, compensatory damages in the amount of at least

$25,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action, including attorney's

fees, and such other relief as the Court deems to be just, fair, and appropriate.

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COUNT 15

ACTION FOR CONSPIRACY

(Against Named Defendants)

293. Plaintiffs repeat and re-allege the allegations in ¶¶ 1 through 292 above with the same force and effect as if herein set

forth.

294. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of the coordinated acts of

Wextrust, Broadway Bank, MBFI, MB Bank, Cohen, Byers, Shereshevsky, and other Defendants, in concert with others constituting

conspiracy. Plaintiffs are now suffering and will continue to suffer irreparable injuries and monetary damages.

295. Plaintiffs are entitled to an award against Defendants, general, special, compensatory damages in the amount of at

least $20,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action, including

attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 16

ACTION FOR FRAUD IN THE INDUCEMENT

(Against Wextrust, Broadway Bank, their successors, and their named officers )

296. Plaintiffs repeat and re-allege the allegations in ¶¶ 1 through 295 above with the same force and effect as if herein set

forth.

297. In September 2007, Plaintiffs entered the Enterprise Loan Agreements and related contracts in which Wextrust

participated as a joint venturer with Broadway Bank that contained statements that were false when made, including, but not limited

to, misrepresentations as to express and implied representations and warranties as to corporate authorization, legal registration,

organization and licensing, financial and commercial status and standing, solvency, and availability of loan proceeds, which in truth

and in fact could not be and were not to be made available to Plaintiffs.

298. Upon information and belief, Wextrust on its behalf and the Enterprise joint venture partners, including Broadway

Bank, represented that it had funds available to timely complete the refinancing, construction and renovation of the 56 Walker

Landmark Premises condo conversion project; that it would timely fund the remaining construction and renovation work; and that it

was financially sound, with sufficient assets and funds available to it and through it to loan 56 W LLC as necessary to complete the

construction and renovation work as specified in the loan documents.

299. Upon information and belief, Plaintiffs did not discover the true facts with respect to the nature of the said

misrepresentations until sometime after August 11, 2008 when the SEC secured a court order placing the company under the control

of the Receiver, nor could Plaintiffs with reasonable due diligence have fully discovered such true facts until sometime after August

11, 2008.

300. Upon information and belief, the representations by Defendants contained in the Enterprise Loan Agreements were

known to be false as of date when made, and/or were made with the pretense of actual knowledge when knowledge did not actually

exist, and / or were made recklessly and without regard to the actual facts; were made with the intention of actually deceiving and

defrauding Plaintiffs, and were made with the intention to induce 56 W LLC and Guy Morris to enter into the Enterprise Loan

Agreements, including mortgage agreements, and to pay the substantial consideration, fees, charges, advances, deposits, etc. directly

and indirectly to Wextrust, Broadway Bank, and others.

301. At the time the said representations were made, Plaintiffs did not know the truth with regard to representations made

by Defendants Wextrust, Broadway Bank, Byers, Cohen, and others in the Enterprise and as contained in the Enterprise Loan

Agreements, but only fully discovered true facts and circumstances sometime after August 11, 2008.

302. Plaintiffs believed the representations made by Defendants including Enterprise members Wextrust, Broadway Bank,

Byers, Cohen, and others participating in the Enterprise Loan joint venture, and those contained in the Enterprise Loan Agreements

and related documents to be true at the time they were made and relied thereon, and were thereby induced to enter into the said

agreements and pay the consideration hereinbefore referred to and stated to the Defendants.

303. Had Plaintiffs known the true facts and circumstances concerning Wextrust’s insolvency and its declared and secret

understandings with Broadway Bank and others, the participation of at least one Defendant (Shereshevsky), who had previously been

convicted of federal bank fraud, Wextrust’s illegal organization and operations and arrangements (contractual and otherwise) with its

47

Enterprise joint venture partners, including Broadway Bank, and others, as assisted and facilitated by other Defendants, Plaintiffs

would not have entered into the Enterprise Loan Agreements and paid the consideration therefore to the Defendants and others.

304. By reason of the foregoing, Plaintiffs have and will continue to suffer direct harm and significant damages, as stated

supra, as a direct result of the acts and omissions of Defendants constituting fraud in the inducement.

305. As a result of Defendants’ actions and omissions constituting fraud in the inducement, Plaintiffs are now suffering

and will continue to suffer irreparable injuries and monetary damages.

306. Plaintiffs are entitled to an award against all Defendants for actual, general, special, compensatory damages in the

amount of at least $20,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this act ion,

including attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 17

ACTION FOR BREACH OF FIDUCIARY AND PROFESSIONAL DUTIES

AND AIDING AND ABETTING A PONZI SCHEME

(Against Named Defendants)

307. Plaintiffs repeat and reallege and incorporate by reference the allegations in ¶¶ 1 through 306 above with the same

force and effect as if herein set forth.

.

308. Defendants including Enterprise members Wextrust, Broadway Bank, Byers, and Cohen, knew there was an illegal or

improper object to be accomplished; i.e., to deprive Plaintiffs of their property and money through breach of fiduciary and

professional duties and aiding and abetting a Ponzi scheme.

309. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of the actions of the said

Defendants.

310. As a result of said Defendants’ actions constituting breach of fiduciary and professional duties and aiding and abetting

a Ponzi scheme, Plaintiffs are now and will continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an

award against all the Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount of

$20,000,000 and for punitive damages in an amount to be determined by the jury, plus the costs of this action, including attorney's

fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 18

ACTION FOR MISREPRESENTATION

(Against Named Defendants)

311. Plaintiffs repeat and re-allege and incorporate by reference the allegations in ¶¶ 1 through 310 above with the same

force and effect as if herein set forth.

312. Defendants including Enterprise members Wextrust, Broadway Bank, Byers, andCohen, knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs of their property through misrepresentation.

313. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of those acts of misrepresentation.

314. As a result of Defendants’ actions constituting misrepresentation, Plaintiffs are now and will continue to suffer

irreparable injuries and monetary damages. Plaintiffs are entitled to an award against all the Defendants, jointly and severally, for

actual, general, special, compensatory damages in the amount of at least $ 15,000,000, and for punitive damages in an amount to be

determined by the jury, plus the costs of this action, including attorney's fees, and such other relief as the Court deems to be just, fair,

and appropriate.

Count 19

ACTION FOR UNFAIR BUSINESS PRACTICES

(Against Named Defendants)

315. Plaintiffs repeat and re-allege and incorporate by reference the allegations in ¶¶ 1 through 314 above with the same

force and effect as if herein set forth.

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316. Defendants including Enterprise members Wextrust, Broadway Bank, Byers, and Cohen, knew there was an illegal or

improper object to be accomplished, i.e. to deprive Plaintiffs of their property through unfair business practices.

317. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of unfair business practices.

318. As a result of Defendants’ actions constituting unfair business practices, Plaintiffs are now and will continue to suffer

irreparable injuries and monetary damages. Plaintiffs are entitled to an award against all the Defendants, jointly and severally, for

actual, general, special, compensatory damages in the amount of at least $ 15,000,000 and for punitive damages in an amount to be

determined by the jury, plus the costs of this action, including attorney's fees, and such other relief as the Court deems to be just, fair,

and appropriate

Count 20

ACTION FOR INTIMIDATION

(Against All Named Defendants)

319. Plaintiffs repeat and re-allege and incorporate by reference the allegations in ¶¶ 1 through 318 above with the same

force and effect as if herein set forth.

320. All of the Defendants knew there was an illegal or improper object to be accomplished, i.e. to deprive Plaintiffs of

their property through intimidation.

321. Plaintiffs have suffered direct harm and damages, as stated supra, as a direct result of intimidation.

322. As a result of Defendants’ actions constituting intimidation, Plaintiffs are now and will continue to suffer irreparable

injuries and monetary damages. Plaintiffs are entitled to an award against all the Defendants, jointly and severally, for actual,

general, special, compensatory damages in the amount of at least $ 5,000,000, and for punitive damages in an amount to be

determined by the jury, plus the costs of this action, including attorney's fees, and such other relief as the Court deems to be just, fair,

and appropriate.

Count 21

ACTION FOR VIOLATIONS OF REAL ESTATE SETTLEMENT PROCEDURES ACT ( RESPA)

(Against All Defendants)

323.Plaintiffs repeat and re-allege and incorporate by reference the allegations in ¶¶ 1 through 322 above with the same force

and effect as if herein set forth.

324.All of the Defendants and, in particular, Wextrust, Broadway Bank, MB Bank and MBFI, knew or should have known

that as mortgage lenders and servicers there are a number of specific statutory and regulatory provisions defined in 12 USC § 2601 et

seq, and regulations issued thereunder, that must be followed with respect to lending money for federally related mortgage loans. The

purpose is to improve reporting, prohibit kickbacks and improper charges, and regulate escrow accounting.

325.The named Defendants regularly and consistently violated the provisions set forth in RESPA by engaging in kickbacks,

requiring the payment of unconscionable and abusive escrow deposits and payments, misusing the said deposits and failing for a

period of years to provide any accounting of the escrowed funds.

326.As a result of Defendants’ actions constituting regular, repeated and continuous violations of RESPA provisions and

regulations, Plaintiffs are now and will continue to suffer irreparable injuries and monetary damages. Plaintiffs are entitled to an

award against the named Defendants, jointly and severally, for actual, general, special, compensatory damages, and for punitive

damages in an amount to be determined by the jury, plus the costs of this action, including attorney's fees, and such other relief as the

Court deems to be just, fair, and appropriate.

Count 21

ACTION FOR NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS

(Against All Defendants)

327. Plaintiff Guy Morris repeats and re-alleges and incorporates by reference the allegations in ¶¶ 1 through 326 above

with the above with the same force and effect as if herein set forth.

328. Defendants have continually negligently and purposely inflicted emotional distress on the Plaintiff Guy Morris.

49

329. Defendants had a continuing affirmative duty to perform their services and conduct their business in such a manner as

not to inflict emotional distress on the said Plaintiff.

330. Defendants breached their duties to Plaintiff.

331. Plaintiff was, is, and, with a high degree of likelihood, will continue to be inflicted with emotional distress due to the

intentional, concerted and/or reckless actions of Defendants.

332. As a result of the intentional, concerted and/or reckless conduct of Defendants, Plaintiff has suffered and will

continue to suffer physical symptomatologies, such as severe pain, anguish, severe emotional trauma, among other symptoms and

related serious health conditions.

333. As a result of Defendants’ concerted actions against Plaintiff, Guy Morris is now and will continue to suffer

irreparable injuries and monetary damages, as well as damages for impaired chronic health conditions and mental anguish. Plaintiff is

entitled to an award against all the Defendants, jointly and severally, for actual, general, special, compensatory damages in the amount

of at least $5,000,000, and for punitive damages in an amount to be determined by the jury, plus the costs of this action, including

attorney's fees, and such other relief as the Court deems to be just, fair, and appropriate.

Count 23

ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

(Against All Defendants)

334. Plaintiff Guy Morris repeats, re-alleges and incorporates by reference the allegations in ¶¶ 1 through 333 above with

the same force and effect as if herein set forth.

335. Defendants intentionally and deliberately inflicted emotional distress on Plaintiff Guy Morris by their concerted

actions.

336. The conduct of Defendants against said Plaintiff was reckless, extreme and outrageous, beyond all possible bounds of

decency and utterly intolerable in a civilized community.

337. The actions of the Defendants were the cause of Plaintiff’s distress.

338. Plaintiff is a reasonable man.

339. The physical and emotional distress sustained by Plaintiff is severe.

340. As a result of the Defendants' extreme and outrageous conduct, Plaintiff has suffered to the present, and, with a high

degree of likelihood, will continue to suffer mental pain and anguish, and severe emotional trauma.

341. As a result of Defendants’ actions, Plaintiff Guy Morris is now and will continue to suffer irreparable injuries and

monetary damages, as well as damages for mental anguish. Plaintiff is entitled to an award against all the Defendants, jointly and

severally, for actual, general, special, compensatory damages in the amount of at least $5,000,000 and for punitive damages in an

amount to be determined by the jury, plus the costs of this action, including attorney's fees, and such other relief as the Court deems to

be just, fair, and appropriate.

VI. DEMAND FOR JURY TRIAL

342. Plaintiffs demand a trial by jury on any and all issues triable of right. Now it in an active role and if and how the end

of a and

PRAYER FOR RELIEF

WHEREFORE Plaintiffs, 56 Walker LLC, INN and Guy Morris, pray for relief and judgments against all

Defendants, jointly and severally, as follows:

1. On the First, Second, Third and Fourth Counts:

a. Compensatory damages, for a sum of at least $25,000,000, plus interest;

b. Punitive damages;

c. Declaratory and injunctive relief;

50

2. On the Fifth, Sixth, Seventh and Eighth Counts in the Complaint,

a. Compensatory damages, for a sum of at least $10,000,000, plus interest;

b. Punitive damages

3. On the Ninth, Tenth, Eleventh, and Twelfth Counts in the Complaint,

a. Compensatory damages, for a sum of at least $25,000,000, duly trebled plus interest;

b. Punitive damages

c. Declaratory and injunctive relief;

4. On the Thirteenth, Fourteenth, Fifteenth and Sixteenth Counts in the Complaint,

a. Compensatory damages, for a sum of at least $15,000,000, plus interest;

b. Punitive damages

5. On the Seventeenth and Eighteenth Counts in the Complaint,

a. Compensatory damages, for a sum of at least $20,000,000, plus interest;

b. Punitive damages

5 On the Nineteenth and Twentieth Counts in the Complaint,

a. Compensatory damages, for a sum of at least $15,000,000, plus interest;

b. Punitive damages

6. On the Twenty First, Twenty Second and Twenty Third Counts in the Complaint,

a. Compensatory damages plus interest;

b. Punitive damages

7. On all Counts

a. An accounting of all deposits and transfers made by Plaintiffs to

Defendants, and reimbursement of all wrongful deposits and transfers and

accepted by Defendants

b. Reasonable attorney's fees incurred in the prosecution of this action;

c. All costs and expenses incurred in the prosecution of this action;

d. Pre-judgment and post judgment interest on actual damages incurred

e. Such other and further relief as this Court deems just and proper to end

the ongoing wrongful conduct of the Defendants.

WILLIAM P. CALLAHAN /S/ ------------------------------------------- WILLIAM P. CALLAHAN (WC9777) Attorney for Plaintiffs 515 Madison Avenue, Suite 2306 New York, NY 10022 Tel. (212) 889-3000 Fax (212) 889-3242 Em: willcall66@gmail.com

CHRISTOPHER THOMPSON (CT-9436)

33 Davison Lane East

West Islip,New York 11795

Tel. (631) 983-8830

Fax: (631)983-8831

Em: ctalawman@aol.com

Of Counsel to William P. Callahan for Plaintiffs Dated: September 30, 2011 56 Walker LLC, Guy Morris, INN World Report, Inc.