HOA, Condo, Co-op Fraud, Theft, & Corruption Roundup (Feb. 2018)

By Deborah Goonan, Independent American Communities
South Austin HOA suing former employees for misusing organization funds (TX)

By Yoojin Cho
Published: February 15, 2018, 11:16 pm Updated: February 15, 2018, 11:18

AUSTIN (KXAN) — The Shady Hollow Neighborhood Association filed a lawsuit last week against two of its former employees. The lawsuit alleges that the former general manager used money from the HOA account to pay off his own credit card balance.

The president of the HOA Board told KXAN they first became aware of the problem at the end of December. They’re now working to determine exactly how much of the HOA money was used for the general manager’s personal purchases.

Michael Cain, the board president, said, “Merchants [now] have to cooperate with providing receipts and see if it was a valid purchase, not a valid purchase.”

According to the lawsuit, there were several charges for gift cards and items on Amazon.com on the general manager’s credit card.

The general manager and bookkeeper were hired in 2010 under different HOA leadership. The current board says the HOA policy requires new hires to undergo background checks, but they couldn’t be sure if that policy was followed since they didn’t do the hiring of this general manager.

Read more (Video):

South Austin HOA suing former employees for misusing organization funds

A former general manager and bookkeeper are being investigated and sued for allegedly misappropriating at least $200,000. The lawsuit claims money was used to pay personal credit card bills, among other things. As usual, the financial irregularities were discovered shortly after a some new HOA board members were elected.  

He directed $20 million in fake luxury home buys. That bought real prison time. (FL)

dneal@miamiherald.com

February 01, 2018 11:19 AM
Updated February 01, 2018 11:48 AM
For directing a $20 million mortgage fraud in South Beach and Fort Lauderdale, 46-year-old Marco Laureti was sentenced to 15 years in prison and five years of supervised release.

That makes one year of federal corrections oversight for each million dollars of mortgage fraud.

Laureti, who was convicted of seven counts of wire fraud and one count of conspiracy to commit wire fraud in November, also got hit with $8,316,135 in restitution. It’s unclear how much of that, if any, will reach Miami Beach’s Sunset Harbour South or Fort Lauderdale’s 45 Hendricks Isle, the two buildings slammed in the scam during the 2007-09 financial disaster.

Two who said they played roles in the scheme under Laureti’s supervision, Miami Lakes’ Michelle Cabrera and Hialeah’s Pedro Melian, were sentenced in November after pleading guilty to one count of wire fraud affecting a financial institution. For using her title company in the scheme, Cabrera was sentenced to two years and one month of prison time, followed by five years’ supervised release with $10,502,773.99 in restitution. Melian, who provided a faux buyer (his mother) for one of the 45 Hendricks Isle units, got five years’ probation with $3,778,032.16 in restitution.

Read more here: http://www.miamiherald.com/news/local/crime/article197815149.html#storylink=cpy

Big time mortgage fraud convictions lead to jail time and millions in restitution for Laureti, Cabrera, and Melian. But it’s doubtful that the condo associations affected will ever see the money. A fourth suspect, Felix Mostelac, has apparently fled the country. 

Woman charged with theft of homeowners association funds(IL)

By Republic-Times on February 14, 2018 at 2:24 pm

A Waterloo woman is alleged to have stolen more than $73,000 in funds over a period of nearly six years through her capacity as a local homeowners association official.

Emily Brand, 39, of 20 Station West, was picked up Monday night by Waterloo police on a Monroe County arrest warrant for felony theft (control/intent).
Court information states that Brand obtained unauthorized control over $73,492.81 collected through the Station West Homeowners Association between March 2010 and December 2016.

Brand posted bond Monday night and was released from Monroe County Jail with a March 15 court date set.

Read more:

http://www.republictimes.net/woman-charged-with-theft-of-homeowners-association-funds/

Another former HOA board member is under investigation for alleged theft.

Community leader convicted of election fraud wasn’t denied his right to testify, Pa. court says (PA)

Updated Feb 7, 11:33 AM; Posted Feb 7, 11:32 AM

By Matt Miller mmiller@pennlive.com
In a case that is unusual in several ways, a state Superior Court panel has refused to void the conviction and prison term of a man who tried to rig an election for a private homeowners’ association.

Among other things, Myron M. Cowher II claimed on appeal that his rights were violated when his belated request to testify at his Pike County trial was denied.

Cowher, 54, was convicted of 217 counts of forgery, identity theft, criminal use of a communications facility, records tampering, and conspiracy for trying to alter the outcome of a 2014 election of the board of directors for the nonprofit Wild Acres Community Association. He was sentenced to 1 1/2 years to 50 months in state prison for the crimes.

Read more:

http://www.pennlive.com/news/2018/02/community_leader_convicted_of.html

A follow-up to the conviction of one of two men involved in election fraud in Wild Acres HOA, in the Pocono region of Pennsylvania.  Someone regrets not testifying in his own defense. 

(Pixabay.com free image)
Woman heads to prison for failing to pay restitution (CT)

Updated 2:22 pm, Wednesday, January 31, 2018, News Times
WATERBURY, Conn. (AP) — A Connecticut woman convicted for allegedly stealing from a condo association is heading to prison for failing to pay $50,000 in restitution as part of her plea deal with prosecutors.
The Republican-American reports that 58-year-old Joanne Fournier, of Watertown, would have received only five years of probation had she paid the restitution Friday. Fournier could have faced 2 ½ to five years in prison if she paid part of the restitution.

Read more:

https://www.newstimes.com/news/crime/article/Woman-heads-to-prison-for-failing-to-pay-12540514.php

Because a former property manager failed to live up to the conditions of her Alford Plea deal, she is now headed to prison. The condo association will not see their $50,000 restitution. 

 

Arizona offers homeowners little protection from bad HOAs, managers (AZ)

Catherine Reagor and Jessica Boehm, The Republic | azcentral.com

Published 6:00 a.m. MT Feb. 7, 2018 | Updated 2:36 p.m. MT Feb. 7, 2018

Excerpt:

Stealing from homeowners

Karen Whiting, who owns community management association Method Real Estate, went to prison in mid-January for stealing more than $300,000 from four Valley HOAs she managed.

The water and electricity were almost turned off in the Gilbert Fincher Creek community Whiting was hired to manage because she hadn’t paid the bills, according to Maricopa County Superior Court documents.

Whiting pleaded guilty to theft and fraud for taking almost $21,000 from that HOA, $177,000 from Gilbert’s Greenfield Lakes HOA, $117,000 from Phoenix’s Paradise Park HOA and $2,445 from Phoenix’s Gold Key Racquet Club.

Board members from those HOAs testified about how the thefts hurt their communities, including home sales falling through and property-tax liens.

When HOA members began to suspect wrongdoing, there was no regulatory agency for them to turn to for help. Instead, members themselves researched and documented the thefts and then notified Gilbert police.

In October, federal prosecutors accused the owners of Phoenix-based Eagle Property Management of taking almost $1.3 million from several Valley homeowners associations.

Harlow White, his wife, Nancy, their daughters Rachel Ellerbrock and Kelsey Powell, and Powell’s husband, Michael Powell, were indicted on money-laundering and conspiracy charges.

Prosecutors allege the group used funds from the HOAs it managed to pay personal bills and mortgages. Eagle Property managed 40 Valley HOAs, including the upscale Scottsdale communities Edge at Grayhawk, Skye Top at Troon and Mission de los Arroyos.

Harlow and Nancy White have a September trial date.

Kelsey Powell, Michael Powell and Rachel Ellerbrock have sentencing hearings scheduled in July, according to court records. The Powells and Ellerbrock, who face fines of up to $250,000, five years in prison and restitution, pleaded guilty to conspiracy to commit transactional money laundering.

https://www.azcentral.com/story/news/local/arizona-investigations/2018/02/07/arizona-offers-homeowners-little-protection-bad-hoas-managers/1062694001/

An investigative report of the Arizona Republic includes several examples of fraud and theft committed by property managers. The report points out that community association managers are unlicensed in Arizona.

(Pixabay.com free image)
Ex-manager at Sun City retirement complex in Indio pleads not guilty to stealing $100,000 (CA)

Amy DiPierro, The Desert Sun Published 3:56 p.m. PT Jan. 31, 2018 | Updated 4:24 p.m. PT Jan. 31, 2018

The former general manager of a giant retirement community in Indio pleaded not guilty to stealing more than $100,000 from the homeowners association he worked for in a court hearing on Jan. 31.

Ceasar Larrach, 46, was an employee of the housing management company Associa working at Sun City Shadow Hills in Indio, a 3,450-home development for people ages 55 and over.

A group of about 10 residents of Sun City Shadow Hills attended Larrach’s arraignment.

“To be quite frank with you, I’ve told people that if this continues, I’m going to move,” said Michael Bard, 78, who moved to the retirement community part time in 2010. “I want to enjoy the rest of my life.”

Larrach pled not guilty to three counts of grand theft. The Riverside County District Attorney alleges that he stole about $104,000 from the Sun City Shadow Hills HOA between February 2015 and June 2017.

Read more:

https://www.desertsun.com/story/news/crime_courts/2018/01/31/ex-manager-sun-city-pleads/1075811001/

A manager formerly employed by Associa Management pleads not guilty to theft of more than $100,00 from the HOA he managed. The community is a well-known large scale retirement haven. Several disillusioned owners attended the arraignment hearing. 

 

Receiver removed from Parkway Gardens is president of Chicago-based real estate institute (IL)

By Ryan McCarthy

FAIRFIELD — The Chicago-based Institute of Real Estate Management says it’s looking into all available information about Ben McGrew, the new president of the institute and a former $275-an-hour receiver for the 240-unit Parkway Gardens condominiums in Fairfield.

A 2016 order by the Solano County Superior Court found that McGrew at Parkway Gardens “failed to report, account or perform his duties as receiver and has failed to account for or obtain approval of the court for payments.”

He was ordered to pay $27,500 to Parkway Gardens, where he was named receiver to manage the property after a lawsuit joined by the city of Fairfield.

Read more:

https://www.dailyrepublic.com/solano-news/fairfield/receiver-removed-from-parkway-gardens-is-president-of-chicago-based-real-estate-institute/

Members of the Chicago Institute for Real Estate Management (IREM) elected  Ben McGrew as President of the organization. But a lawsuit contends that McGrew took unauthorized payments while serving as a Receiver for a distressed condominium association. Apparently, no one from IREM did a background check on board candidates?

Palm Beach developer admits to lying to bankroll Vero condo project (FL)

Jane Musgrave Palm Beach Post Staff Writer
6:02 p.m Thursday, Jan. 18, 2018

WEST PALM BEACH
A 74-year-old developer who operated from offices in Palm Beach faces a possible five-year prison sentence after admitting to a federal judge on Thursday that he submitted phony documents to banks to keep an oceanfront condominium project in Vero Beach afloat.

Once facing eight counts of bank fraud, George Heaton pleaded guilty to a single charge of conspiracy to commit the offense of making false statements to a federally insured institution. The plea deal allowed him to escape the more serious charges, each of which was punishable by a maximum 30-year sentence.

Read more:

http://www.palmbeachpost.com/news/crime–law/palm-beach-developer-admits-lying-bankroll-vero-condo-project/K2D8aeln9NWPpyRDLlXzLJ/

Another multimillion fraud scheme committed by a developer, an accountant, and a title and escrow agent. Plea deals have been made in order to reduce sentences to be made in the next several months. Phony information was supplied to lenders, and banks reportedly lost millions when condo units ended up in foreclosure. 

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One Reply to “HOA, Condo, Co-op Fraud, Theft, & Corruption Roundup (Feb. 2018)”

  1. How in good conscience do they steal from their neighbors? Oops that’s the operative word – conscience! Why are the thieves allowed probation? Lock them up so they don’t move to your zip code…

    Like

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