HOA, Condo Fraud, Theft, and Embezzlement roundup (June 2016)

By Deborah Goonan, Independent American Communities


PAI’s Don Christy pleads guilty to fraud (SC)

(Island Packet) Don Christy, the former owner of Property Administrators Inc. on Hilton Head Island, pleaded guilty to one count of federal wire fraud, a felony offense, in U.S. District Court in Charleston on May 31, 2016. The 72-year-old Christy, whose company managed services for local Homeowners Associations and large neighborhoods, is set to be sentenced within a few months. He faces a maximum of 20 years in prison in addition to having to pay restitution. We captured Christy as he walked out of court and caught up with his attorney, Mike Macloskie.

Christy and his secretary, Lisa Arnold, are both charged with defrauding homeowners of $3.5 million. When the business shut down in February 2015, PAI had 21 clients on Hilton Head Island, and had been managing some of the condo or homeowners associations for two decades. 

Christy and his attorney appear in a brief video exiting the courthouse.  

Insurance rates in Hilton Head are bound to increase with all the recent theft claims just from this case alone. 



Orting School Board president commits suicide as court appearance loomed for homeowners association theft (WA)

(The News Tribune) Orting School Board President Iris Lilley killed herself on the day she was to appear in court for allegedly stealing from her homeowners association.

The Pierce County Medical Examiner’s Office ruled the 59-year-old’s death was a suicide, but when she died is uncertain. Officials presume it was Tuesday morning.

Lilley’s family found her body Tuesday afternoon in a wooded area of Graham after she left a note with the location, sheriff’s spokesman Ed Troyer said Thursday.

Prosecutors charged her with first-degree theft May 17, and she was to be arraigned at 8:30 a.m. Tuesday in Superior Court in downtown Tacoma.


Truly a tragic story all around – the former HOA Treasurer’s alleged theft exceeding $160,000, the unpaid water utility bills that resulted in a special assessment for owners, the broken trust of a once well-respected School Board President, and Lilley’s taking of her own life rather than face up to the charges. 

Two typical red flags that contributed to the embezzlement: Lilley’s personal financial troubles, and a lack of proper financial protocols and oversight by fellow HOA Board members. 



Hidden Harbor Homeowner’s Association President indicted (TN)

(News Channel 9) In a release, Hamilton County Deputies say John Brian Markee, age 47, turned himself in Friday. after the Hamilton County Grand Jury handed down an indictment charging him with one count of theft over $10,000.00.

The indictment came after a five month investigation conducted by the Hamilton County Sheriff’s Office Criminal Investigation Division.

Read More: http://newschannel9.com/news/local/hidden-harbor-homeowners-association-president-arrested

(Earlier report with Video)

Neighborhood association and police investigate missing $22,000

Read MoreL http://newschannel9.com/news/local/neighborhood-association-and-police-investigate-missing-22000


Markee was serving as Association President, and apparently nobody else on the board was checking bank statements. When the board hired a new accountant who educated the board about proper oversight of association funds, Markee resigned from the Board and admitted to taking $1000 for personal use. A criminal investigation later uncovered $22,000 was missing. 

The second link above contains a copy of Hidden Harbor’s letter to HOA members informing them of the missing money. 



Cedar Lake woman accused of taking funds from subdivision association (IN)

(Times Staff, Cedar Lake) The treasurer for a subdivision association is accused of using money from the organization to pay her personal bills, according to court records.

Jennifer L. Schmid, 40, of Cedar Lake, faces two counts of theft. She was arrested and released Sunday from Lake County Jail after posting a $2,000 bond.

During a review earlier this year of the financial books for the Surprise Park Improvement Association, it was discovered that the records weren’t adding up. Some of the records were destroyed.

The audit determined that the association lost $39,377.37 while when Schmid was the treasurer.

Read more: http://www.nwitimes.com/news/crime-and-court/cedar-lake-woman-accused-of-taking-funds-from-subdivision-association/article_7343a878-2451-5d3b-8353-0a66a867cf4a.html

Schmid was the Treasurer for the HOA. When confronted with an audit that noted discrepancies, she admitted to taking money for personal use. It was also discovered that Scmid paid her personal bills with HOA funds. Schmid has been arrested on two counts of theft and has repaid approximately $12,000 to Surprise Park. 



Developer who bilked investors sent to state prison (PA)

LEWISBURG — Refusing to give Mifflinburg businessman Ted A. Cresswell more time to pay $2 million back to investors he bilked in a failed Monroe Township housing development project, a Lycoming County judge sentenced the convicted thief to one to seven years in state prison Tuesday.

As he delivered the sentence in Union County Court, Judge Dudley N. Anderson had some harsh words for Cresswell, 60, who pleaded no-contest to felony deceptive or fraudulent business practices in December and then asked for sentencing to be deferred several months to give him time to repay investors.

“It’s a perversion of justice,” Dudley said of Cresswell’s request for probation to allow him a chance to raise the $2,002,500 he owes about two dozen victims who invested in the proposed townhouse development on Mill Road in Snyder County.

Assistant Attorney General Anthony Forray said an investigation showed that only about $10,000 of the $2 million invested was put into the project by Cresswell and the rest was spent on his personal expenses.

“I can’t say it’s joyful, but I’m satisfied” with the penalty, said Susan Evans Nogler, a victim and longtime friend of the Cresswell family. “It’s a betrayal. He made the choice of greed over relationships and that’s something we’ll never understand.”

Read More: http://www.dailyitem.com/news/local_news/developer-who-bilked-investors-sent-to-state-prison/article_5da3e046-ec1d-5f53-ba41-b387af949b5e.html

In this case, Cresswell swindled more than $2 million from real estate investors to build a townhouse community on former farm land in Snyder County. That project never even broke ground, because the money was used for Cresswell’s personal expenses.

Incredibly, at the sentencing hearing, several of Cresswell’s investors testified on his behalf, in hopes of outweighing testimony from victims who pressed charges. Judge Anderson was not swayed. 




Nevada Supreme Court Justice Nancy Saitta is stepping down

Nevada Supreme Court Justice Nancy Saitta abruptly announced Monday that she is retiring more than two years before her second term is up.

Saitta, 65, notified Gov. Brian Sandoval in a letter last week that she was stepping down from the high court on Aug. 8. Her six-year term runs through 2018.

Her retirement comes three months after a Las Vegas Review-Journal story revealed that a sworn deposition had surfaced alleging Saitta “tipped off” a key target to FBI-led raids in a massive investigation into homeowners association fraud.

Saitta has strongly denied tipping off the target, construction defect lawyer Nancy Quon, who eventually killed herself under the weight of the investigation. The retiring justice could not be reached Monday for further comment.

In the deposition, Lisa Kim, who ran a company that managed HOAs linked to the long-running federal investigation, testified that Quon told her about the tip on Sept. 24, 2008, the first of two days of court-approved law enforcement searches across the valley. The next day investigators searched Quon’s office.

Read more: http://www.reviewjournal.com/politics/government/nevada-supreme-court-justice-nancy-saitta-stepping-down

What a coincidence that Saitta is stepping down now. Kudos to Jeff German for staying on this story as the civil trials get underway. 






Collingwood, Barrie condo fraud case set for pre-trial on Aug. 8 (Ontario)
By John Edwards

A woman accused of defrauding several local condominium corporations, is back in court next month.

Rhonda McCarthy, 41, of Springwater Township faces 72 charges connected to alleged fraudulent financial activity involving several condominium corporations in Collingwood, The Blue Mountains, and Barrie.

Initially, she faced 52 charges, but police continued to investigate the case and added an additional 20.

Read more: http://m.simcoe.com/news-story/6733643-collingwood-barrie-condo-fraud-case-set-for-pre-trial-on-aug-8

McCarthy has managed numerous condominium properties.



Terrebonne police officer facing fraud charges over condo fees (Montreal)

(CTV Montreal)

A police officer from Terrebonne is facing fraud charges related to the Chomedey condo complex where he lived.

Lt. Daniel Fortier is accused of defrauding his neighbours of nearly $200,000, money allegedly taken from the condo fees he was in charge of administrating.

Fortier was arrested last week by the Laval police after the alleged fraud was exposed by Fortier’s neighbours.

People trusted Fortier because of his position as a police lieutenant.

The Journal de Montreal reports that the condo association filed a $223,000 lawsuit against Fortier and two other co-administrators who may also have spent condo fees for personal reasons.

Read more: http://montreal.ctvnews.ca/mobile/terrebonne-police-officer-facing-fraud-charges-over-condo-fees-1.2927093

The residents of Chomedey condo complex are senior citizens living on retirement income, so the financial loss hits them particularly hard. Like the report of the School Board President above, Fortier earned the trust of his neighbors by virtue of his chosen profession – a police lieutenant. 

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