HOA Treasurer pleads guilty on embezzlement charges

By Deborah Goonan, Independent American Communities

Money in the form of many large bills

Would you believe that stealing $100,000 from your homeowners’ association – with a guilty plea – could get you a maximum of 1 year in prison and a $1,000 fine?

Seems like an unbelievably light penalty, but it’s true.

When you purchased a property in a homes association, did it ever occur to you that your Board Treasurer – a licensed real estate agent – would hire her own husband as the HOA attorney, and then write almost 100 checks to herself, and withdraw HOA funds from an ATM at a casino?

Apparently, Loretta Lock was gambling on the homeowners’ dime.

By the way, it’s not illegal for the HOA board to hire relatives to work for the Association. Perhaps it should be, but in most states, it’s perfectly legal, as long as the Board member discloses the relationship. This sort of nepotism occurs all the time in privately owned, Association-Governed Housing.

Did it ever cross your mind that your HOA would choose not to conduct regular audits in order to “save money?” I think it’s a safe bet that 3 years’ of expenses for audits would have been far less costly than losing more than $100,000 due to embezzlement.

The article doesn’t mention whether or not the Harbor Homes Association was insured against this sort of loss. Even if they are, you can bet their insurance rates will increase after this incident.

All of this is made possible by weak to non-existent regulation of Association Governed Housing and naive homeowners who put too much trust in the wrong leaders. Combined with weak enforcement of criminal law involving financial crimes in non-profit associations, the end result is that HOAs are an environment ripe for exploitation, fraud, and theft.

Sentencing is set for October 21. The Harbor Homes Association is recommending parole with full restitution.

 

Former HOA treasurer admits embezzling more than $100,000

Judy L. Thomas, Kansas City Star

 

Highlights:

The former treasurer of a Kansas City homeowners association pleaded guilty Thursday to stealing more than $100,000 from her HOA over 2 1/2 years.

Loretta A. Lock, 78, was charged in Clay County Circuit Court in January with embezzling from the Charleston Harbor Homes Association. Lock, a real estate agent, served as treasurer of the HOA from August 2007 to August 2015. According to a grand jury indictment, she stole money from the homes association between February 2013 and July 2015.


At her hearing, Lock admitted to writing 97 checks to herself on the HOA account, ranging in amounts from $250 to $3,200. She also wrote five checks to her husband — who was the HOA’s attorney at the time — for what she described as legal services, but some of those checks had been voided or stubs were missing. According to prosecutors, Lock also made numerous cash withdrawals from ATMs at area casinos.

Read more here: http://www.kansascity.com/news/local/crime/article97923567.html#storylink=cpy

 

 

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