HOA, Condo Fraud, Theft, and Corruption Roundup (April 2017)

By Deborah Goonan, Independent American Communities

 

HOA defrauded of millions accuses law firm of facilitating scheme (NV)

By Jenny Wilson, Las Vegas Review Journal

Updated March 28, 2017 – 10:13 pm

Forty people were arrested and at least three people killed themselves after federal investigators started bulldozing a construction company owner’s massive election-rigging scheme to defraud homeowners associations of millions of dollars and win an illegal fortune off of construction defect lawsuits and building repair contracts.

The construction company owner, Leon Benzer, is serving a 15-year prison sentence. His criminal partner, former construction defect attorney Nancy Quon, killed herself in 2012 as authorities were zeroing in on her role. Her estate since has paid out a $6 million settlement to the homeowners association that suffered the greatest losses, a lawyer for the Vistana HOA said in court Tuesday.

But the dust still hasn’t settled. The homeowners association is trying to convince a judge that the fraud ringleaders could not have embezzled millions without the gross malpractice committed by a law firm that was hired in 2006 to protect the integrity of the Vistana HOA board elections.

The firm, Kummer Kaempfer Bonner Renshaw and Ferrario, did the opposite and concealed illegal behavior from its client, attorney Richard Haskin, who is representing the Vistana HOA, told a Clark County judge Tuesday.

Read more:

https://www.reviewjournal.com/crime/courts/hoa-defrauded-of-millions-accuses-law-firm-of-facilitating-scheme/

 

This is an interesting legal strategy – Vistana HOA is filing a malpractice suit against KKBRF, claiming that the law firm deliberately concealed election fraud facilitated by one if its former attorneys, Brian Jones. Jones had been hired by the HOA to monitor its election, but was later found guilty of helping to rig that election to place Benzer’s accomplices on the board. Even though the criminal prosecutions are over, the civil suits may take years to uncover the large ring of corruption.

 

 

Miami Beach condo buyer sues seller and broker over alleged Airbnb misrepresentations (FL)

Martina Abosi also alleges remodeling work was completed without permits

March 30, 2017 02:00PM
By Franicsco Alvarado

Bahamian investor Martina Abosi wanted to get in on the Airbnb action in Miami Beach to help fund her retirement, so she set out to find a condo in areas of the city where short-term rentals are allowed.

Instead, Abosi paid $330,000 last year for a unit in a 1960s mid-rise tower that was allegedly renovated without permits, located in a neighborhood where short-term rentals are prohibited. And she faces a $20,000 fine should she seek out renters, according to a lawsuit she recently filed in Miami-Dade Circuit Court.

Abosi says in the suit that she was unaware of the unpermitted work and that the building at 360 Meridian Avenue in Miami Beach is in a prohibited zone. She is suing the seller, Andre Frings, his broker Oliver Davis and real estate brokerage Keller Williams Miami Beach to get her money back, in addition to an undisclosed amount of damages for the funds she spent getting the unit permitted, plus loss of income from being unable to offer the 6th floor apartment to short-term renters.

Read more:

https://therealdeal.com/miami/2017/03/30/miami-beach-condo-buyer-sues-seller-and-broker-over-alleged-airbnb-misrepresentations/

In this case, real estate investor Martina Abosi claims that a realtor and his client misrepresented the condo she purchased for the purposes of renting it on Airbnb. After the purchase, not only did Abosi find out that the condo was not eligible for short-term rentals, but she also discovered that major renovations had been completed by the seller without permits. Another buyer beware story. 

 

Clayton woman pleads guilty to embezzling $800,000 from 25 homeowner associations (NC)

Anne Blythe, News Observer

April 10, 2017

Diana Kelly, a Clayton woman accused of embezzling more than $800,000 from 25 homeowners associations whose accounts she managed, pleaded guilty on Monday to the charges as part of a plea arrangement with Wake County prosecutors.

Kelly, 54, rose in front of Wake County Superior Court Judge Donald Stephens and told him she had agreed to enter the plea, which meant she will serve the next 10 years in prison.

Read more here: http://www.newsobserver.com/news/local/crime/article143776124.html#storylink=cpy

Diana Kelly, former owner of Kornerstone Management, was sentenced to 10 years in prison with work release. She has been ordered to repay more than $600,000 to victim associations. Kelly had been able to conceal her embezzlement from more than two dozen associations for years. See previous blog for more details.

 

PCSD: HOA treasurer admits to stealing $180,000 (AZ)

By Kim Smith ksmith@gvnew.coms April 14, 2017

The treasurer for Canoa Seca Estates II walked into the Green Valley substation of the Pima County Sheriff’s Department on Thursday afternoon and told deputies he was guilty of stealing $180,000 from the homeowners association, according to a PCSD spokesman.

Wendell Odean Byram, 79, was booked into the Pima County Detention Center on a single count of theft, Lt. Eric Johnson said.

Bill Copeland, the HOA’s incoming president, said he went to Chase Bank with past-president Carl Schuster on Thursday to be added to the bank account. While they were there, they realized the account balance “didn’t ring true,” Copeland said.

After looking over three years of bank statements, Copeland said he and Schuster confronted Byram, who admitted to taking the money for his business, Copeland said.

Read more:

http://www.gvnews.com/news/pcsd-hoa-treasurer-admits-to-stealing/article_6b491486-216f-11e7-b1bb-6beee2b15a54.html

 

Bryam was a trusted neighbor and business owner that served as Treasurer of his HOA. A few important points here. Board members should be reviewing bank statements every month, and the numbers should agree with the Treasurer’s report to the penny. And do spend the money for periodic audits. Although the association’s insurance might cover most of their financial loss, rates for future policies are sure to increase. 

 

Slidell woman arrested for stealing from homeowners’ association

Ashley Rodrigue, WWL
April 25, 2017

SLIDELL- Attorney General Jeff Landry’s Office has arrested a Slidell woman for felony theft in excess of $25,000, Money Laundering over $20,000 and Bank Fraud.

Laura Kozma was booked into the St. Tammany Jail Monday following an investigation by the Louisiana Bureau of Investigation.

Authorities say while Kozma was an employee of the Belair Homeowners’ Association in Slidell, she stole dues checks submitted by neighborhood residents. Detectives say Kozma deposited more than $36,000 into a secret bank account for the BHOA, then used her position as the only approved signer on the account to make more than $32,000 in cash withdrawals.

Read more:

http://www.wwltv.com/mb/news/local/northshore/slidell-woman-arrested-for-stealing-from-homeowners-association/434111097

Another alleged case of theft by an association manager. My question: how was Kozma legally permitted to open an account in the association’s name, without the bank requiring two signatures of board members? 

See also:

http://www.wwltv.com/news/local/northshore/hoa-dues-theft-arrest-spawns-advice-for-other-homeowner-organizations/434384880

 

CANANDA

COURT DECISIONS

Condo Deposit Fraud results in Criminal Conviction for Developer’s Lawyer

DENISE LASH April 10, 2017

A Toronto lawyer, Meerai Cho, was recently convicted of criminal breach of trust and had her licence to practice law revoked for her part in facilitating the theft of $13,000,000 by her client, a condominium developer. We previously blogged about this in May 2015.

The stolen money was comprised of deposits paid by over 140 purchasers of units in a mixed-use commercial/residential condominium to be built in North York, Ontario. As reported by the Law Society of Upper Canada (the “Law Society”), most purchasers lost between $50,000 and $100,000.

Read more:

http://www.lashcondolaw.com/condo-deposit-fraud-results-in-criminal-conviction-for-developers-lawyer/

An attorney from Toronto was convicted for helping her client, a condo developer, to obtain access to $13 million in purchaser deposits. The developer then took off with the money. Meerai Cho will spend at least 3 years in prison, and is no longer licensed to practice law.


2 thoughts on “HOA, Condo Fraud, Theft, and Corruption Roundup (April 2017)

  1. These accounts of HOA fraud and embezzlement are very informative, especially as to the possible involvement of professionals presumably hired to help “manage” the HOA’s affairs. My question has to do with how these criminal investigations and/or prosecutions get started? What can an Owner or diligent Board member do to report suspected fraud and embezzlement and to whom should such allegations be communicated?

    Like

    1. Obtain bank statements, invoices, receipts. If the numbers don’t add up. If you have evidence of missing money, unpaid invoices, or unauthorized cash withdrawals, start by filing a report with the local police. If you have no evidence but expect foul play, contact the Attorney General in your state. Speak with someone in the financial fraud department, explain your concerns, and listen to any tips or advice they may provide.

      Do you have any other suggestions?

      Like

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