HOA, condo, Co-op fraud, theft, & corruption roundup (May 2018)

By Deborah Goonan, Independent American Communities

 

Real estate fraud schemes in the world of association-governed communities.

 

Former HOA treasurer gets jail time in theft

By Kim Smith ksmith@gvnews.com

A former HOA treasurer was sentenced Thursday to seven years’ probation and six months in jail for stealing more than $203,000.

 

Wendell Odean Byram, 81, pleaded guilty to one count of theft and faced up to 12½ years in prison for stealing from the Canoa Seca Estates II HOA.

 

More than a dozen HOA members were in court when Pima County Superior Court Judge James Marner sentenced Byram and ordered him to pay more than $203,000 in restitution to State Farm Insurance and the HOA.

Read more:

https://www.gvnews.com/news/former-hoa-treasurer-gets-jail-time-in-theft/article_c38f2612-5f8f-11e8-a035-8f31794928cd.html

HOA members were present at Byram’s sentencing hearing. Several of them were angry that the Judge only gave the 81-year old former HOA Treasurer 6 months in prison. Because he turned himself in and confessed to the crime, and, given his advanced age, the Judge ordered the maximum probation sentence of seven years. At the same hearing, Byram expressed remorse, but he also said it was “easy” to steal money from his HOA. He used the funds to prop up his personal business venture. Byram owes $45,000 in debt, and has just been ordered to pay $203,000 in restitution. 

prison-553836_1920 jail

 

After McKee revelations, can City Hall and the developer work it out?

By Jacob Barker St. Louis Post-Dispatch

May 21, 2018

As a trial to determine the value of a north side building developer Paul McKee once bought played out in St. Louis Circuit Court this month, never-before-aired details about some of the developer’s transactions raised new questions about his future relationship with City Hall.

Among the biggest revelations were that McKee was awarded Distressed Area Land Assemblage tax credits for purchases attorneys for the city alleged were “shams” because no money changed hands. The Missouri Department of Economic Development flagged some of the “sales” as improper. In 2013, it blocked one and clawed back tax credits awarded for another by reducing the amount awarded to McKee on future transactions.

Since the trial aired those details, St. Louis Mayor Lyda Krewson has called for an internal investigation. Some St. Louis aldermen want a criminal investigation. The Department of Economic Development is now aware of a McKee transaction similar to others it deemed improper where the developer was awarded $2.5 million in tax credits that the department never clawed back.

Read more:

http://www.stltoday.com/business/local/after-mckee-revelations-can-city-hall-and-the-developer-work/article_3de8a615-bd0d-5a01-a5a2-29dfca791a27.html

An FBI agent is investigating Paul McKee, a “controversial” developer who owns hundreds of acres of land in St. Louis. City government is forced to confront inconvenient facts presented in court, pointing to “sham” sales and misuse of tax credits. 

 

Judge convicted of fraud to seek retention

CHICAGO (AP) — A Cook County judge who was convicted by a federal jury in Chicago of fraudulently obtaining mortgages for investment properties is seeking retention.

The Chicago Sun-Times reports Judge Jessica O’Brien filed paperwork May 2 with the State Board of Elections setting herself up for a retention vote in November. O’Brien filed her paperwork the week after the Illinois Supreme Court barred her from practicing law.

O’Brien is trying to convince a federal judge to overturn the jury’s verdict. She continues to be paid while appealing her conviction.

Read more:

http://www.news-gazette.com/news/2018-05-23/judge-convicted-fraud-seek-retention.html

 

Nothing like a corrupt judge dabbling in real estate investment!

 

 

Arrest and handcuff fraud theft

Seven accused of taking homes worth $12 million from the living and the dead

Sun Sentinel
May 9, 2018 5:35 PM

A ring of thieves illegally took ownership of more than 40 homes across South Florida in a multimillion-dollar plan — even stealing properties that belonged to the dead, authorities say.

Group members used fraudulent notary signatures to get the properties, then they lived in the homes, sold them or rented them, arrest reports said.

The group picked not only the homes of unaware property owners, but also those from the estates of 18 dead people, the Broward Sheriff’s Office said. Because of that, deputies dubbed their investigation “Operation Tomb Raider.”

The ring, which operated under various company names, is facing more than 600 felony charges that include grand theft and identity theft. It allegedly used quit-claim deeds and powers of attorney to take ownership of the homes.

All told, the homes were worth nearly $12 million. They were concentrated in west Broward County, in cities such as Coral Springs, Tamarac, Lauderhill, Parkland and Weston.

The Sheriff’s Office investigation is the latest South Florida case where investigators say homes were illegally taken without owners’ consent.

Read more:

http://www.sun-sentinel.com/local/broward/fl-sb-operation-tomb-raider-broward-20180509-story.html

BSO Detective Follows Trail From Squatter Complaint to $11.8 Million Fraud Case

NBC 6 (Miami)

What began in June 2016 as a complaint of squatters living in a Weston home culminated Tuesday in the arrest of six people in what police call an $11.8 million scheme to defraud.

Among the victims: dead people.

That’s why Broward Sheriff’s Det. Chris Bradley says the agency dubbed the case Operation Tomb Raiders.

“They prey on homes that were in distress, disabled individuals and, unfortunately in this case, deceased home owners,” Bradley said.

The six charged – including Tinker’s wife Patricia, 44, son Darren, 23, and office manager Gillian Solomon, 49 – face 151 counts of grand theft, ID theft and filing false documents, part of an organized scheme to defraud that police say began in 2010.

The others arrested – Catherine Lichtman, 56, and Mircho Murdjeff, 58 – are charged in connection with their actions involving their business, Prestige Home Buyers, also known as American Family Real Estate & Investment Co., according to the arrest affidavit.

Read more (Video):

https://www.nbcmiami.com/news/BSO-Detective-Follows-Trail-From-Squatter-Complaint-to-Multi-Million-Fraud-Case-482110971.html

Detectives have arrested several individuals accused of an organized crime ring to steal 44 homes by filing false deeds. The group allegedly worked in concert to forge signatures and transfer the properties to themselves. Nearly half of the homes are estates of deceased former owners. Thus detectives have dubbed this case “Operation Tomb Raider.”

 

Tombstones cemetery
(Pixabay.com free image)

 

Miami-based developer faces indictment linked to Tampa project

Mordechai Boaziz is charged with misleading banks and a federal agency to obtain $15M of loans in connection with a condo conversion in Tampa

May 05, 2018 01:45PM

Mordechai Boaziz, director of Miami-based Maverick Investments, was indicted on federal charges of conspiring to lie to banks and a federal agency.

His attorney in Tampa, John Fitzgibbons, said Boaziz is innocent and intends to fight the indictment. Boaziz could face a $1 million fine and as many as 30 years in prison.

The charges against Boaziz stem from his acquisition of an apartment complex in Tampa in the late 2000s to convert the property to a condominium.

The indictment indicates that Boaziz and others misled banks and the U.S. Department of Housing and Urban Development (HUD) by failing to disclose financial incentives to induce purchases of condominium apartments at The Preserve on Sanctuary Cove Drive in Tampa.

Misleading the banks and HUD allowed Boaziz to obtain $15 million of mortgage financing, according to the indictment. [Gainesville Sun]– Mike Seemuth

Source:

https://therealdeal.com/miami/2018/05/05/miami-based-developer-faces-indictment-linked-to-tampa-project/

In this case, a developer has been convicted of deceiving condo buyers and HUD, in order to obtain favorable financing for the affordable housing project. Banks and HUD generally require a substantial percentage of condo units to be presold, before they will lend money to a developer. 
Apartment to condominium conversions were all the rage when condos were selling at a brisk pace in Florida. 
Ironically, as soon as the condo market tanked a decade ago, developers and investors moved in like vultures to acquire condos in ailing associations, and deconvert back to apartments. 

Foreclosure defense attorney Mark Stopa draws praise, criticism at penalty hearing

CLEARWATER — Homeowners from as far away as Texas and North Carolina crowded a Pinellas County courtroom Monday in support of embattled foreclosure defense attorney Mark Stopa.

Facing possible disbarment for professional misconduct, Stopa also drew support from several lawyers and judges, including one who said Stopa had forced judges to “rethink ” the entire foreclosure process.

“He’s had a hand in advancing the law in the area of foreclosure,” said Judge Morris Silberman of the Second District Court of Appeal in Lakeland.

Silberman was among those testifying in the penalty phase of the Florida Bar’s case against Stopa, who says he has helped as many as 7,000 homeowners. Based on testimony at a trial in March, Pinellas Circuit Judge Linda Allan found that the Bar had proved five of its six counts against him including some alleging that he nearly cost two clients their homes when he failed to tell them of bank settlement offers.

Among the critics was Hillsborough Circuit Judge E. Lamar Battles, whom Stopa once tried to have disqualified from hearing a case because the judge allegedly was biased against Stopa’s client, an older Hispanic woman.

Noting that his own wife is “of Spanish descent (and) between 55 and 60,” Battles called Stopa “very aggressive, not to be confused with zealous.”

“He talks over opposing counsel; he’s very rude to opposing counsel; he’s unprofessional in his interactions” with others, Battles added.

Victor Veschio, who represents banks, said he was sitting on a bench in a court reception area once when Stopa began yelling at him in “a very aggressive manner and tone.”

“Then he leaned over and whispered, ‘You are an a–hole and I’m going to crush you,” Veschio testified.

Read more:

http://www.tbo.com/news/business/realestate/Foreclosure-defense-attorney-Mark-Stopa-draws-praise-criticism-at-penalty-hearing_167584574

At a recent disbarment hearing, both supporters and critics gave the judge an earful. Supporters say Stopa is a fierce defender of homeowner rights in bank foreclosure actions. Stopa says he’s a victim of a conspiracy to destroy his career.

Critics say his style is too aggressive and unethical. The Florida Bar has already decided that Stopa violated Bar Rules. Stopa awaits final determination of his penalty. 

lady-justice-2388500_1920 attorney law
(Pixabay.com free image)

 

Woodlake embezzler convicted

Scheme involved false invoices at San Mateo homeowners’ association

By Anna Schuessler Daily Journal staff

Updated

Nearly five years after residents of San Mateo’s Woodlake condominium homeowners’ association were tipped off about an embezzlement scheme in which some $2.8 million was stolen, one of the two co-conspirators accused of the crime was convicted Friday of felony embezzlement and felony grand theft, according to the San Mateo County District Attorney’s Office.

After 11 days of trial and some five hours of deliberation, a jury found Michael Anthony Medeiros, 61, guilty of the two felony counts, for which he faces a sentence of eight years, eight months in state prison. He was immediately remanded into custody on no bail, according to prosecutors.

Read more:

https://www.smdailyjournal.com/news/local/woodlake-embezzler-convicted/article_bc09c5f4-559f-11e8-b323-3f168f03ace3.html

Scheme involved false invoices at San Mateo homeowners’ association

By Anna Schuessler Daily Journal staff

Updated

Nearly five years after residents of San Mateo’s Woodlake condominium homeowners’ association were tipped off about an embezzlement scheme in which some $2.8 million was stolen, one of the two co-conspirators accused of the crime was convicted Friday of felony embezzlement and felony grand theft, according to the San Mateo County District Attorney’s Office.

After 11 days of trial and some five hours of deliberation, a jury found Michael Anthony Medeiros, 61, guilty of the two felony counts, for which he faces a sentence of eight years, eight months in state prison. He was immediately remanded into custody on no bail, according to prosecutors.

Read more:

https://www.smdailyjournal.com/news/local/woodlake-embezzler-convicted/article_bc09c5f4-559f-11e8-b323-3f168f03ace3.html

 

Two articles tying up the loose ends of a 5-year investigation and prosecution of a manager-contractor duo who embezzled $2.8 million from the association.

 

Money $100 bills
Image courtesy of https://quincemedia.com (3D illustration by Quince Media)

Plymouth man charged with tax felonies for income from Eden Prairie condo association

A Plymouth man has been charged with five felony counts of filing fraudulent income tax returns, according to an announcement Thursday, May 3, from the Minnesota Department of Revenue.

 

Hennepin County District Court files say a new bookkeeper for the Edenvale Glen Condo Association in Eden Prairie suspected that David John Nocton, who had been president of the association from many years, had taken money from the association fund for himself.

The Eden Prairie Police Department investigated and told Nocton that payments from the association to himself and his business, J&D. Home Maintenance, were in exchange for maintenance work he had done with acting as the property manager.

 

The Eden Prairie police referred the case to the Minnesota Department of Revenue.

The state investigators determined that Nocton reported a small portion of that income on his taxes from 2012 to 2016. The announcement said they found Nocton issued checks to his business totalling $116,996 and to himself totaling $62,608. The department says that means he owes more than $17,800 in taxes, penalties and interest.

 

Each of the five counts carries a maximum penalty of five years in prison, a $10,000 fine, or both.

Source:
http://www.swnewsmedia.com/lakeshore_weekly/news/local/plymouth-man-charged-with-tax-felonies-for-income-from-eden/article_10ec54ad-f88f-546b-8f60-163d02301f6f.html

The condo association couldn’t get their former board President on theft charges.  But investigators are able to prosecute on evasion of state taxes. 

Talk about a clear conflict of interest. 

Fired property manager refuses to hand over files, keys, access to accounts

By Benny L. Kass, Chicago Tribune

May 16, 2018 12:05 PM

I am a trustee of a 10-unit condo association, which hired a new building manager. When the outgoing manager received the separation letter, he claimed that owners didn’t support the decision and that he wasn’t going to leave the job. He refused to turn over the keys, files and bank accounts. Although he was told the change was uncontested, he would not relent, so a cease-and-desist was sent to enforce the change. He replied that he had an attorney to fight it. (The attorney is his wife and co-owner of their business.) In the meantime, the outgoing building manager is the only one with oversight of our bank accounts. I went to the bank with copies of the notarized statement filed with the registry of deeds to prove that I am a trustee and our declaration of trust, which states that trustees have fiduciary oversight. I explained our concern about the manager being fired and still having sole oversight of our accounts. The bank claimed it needed additional documents but couldn’t explain what they were. The outgoing property manager hasn’t shown us an actual bank statement in at least two years, which is concerning.

Read more:

http://www.chicagotribune.com/classified/realestate/sc-housing-0517-benny-kass-20180515-story.html

This is an advice column, but I share it as an example of red flags pointing to embezzlement or fraudulent management. 

 

And, Finally…

Great advice from a fraud expert.

http://www.globest.com/2018/04/27/how-to-avoid-property-management-fraud/?kw=Have%20You%20Been%20a%20Victim%20of%20Property%20Management%20Fraud?&et=editorial&bu=REM&cn=20180427&src=EMC-Email&pt=California&slreturn=20180327175318

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