HOA, condo, & co-op corruption, fraud, & theft roundup (June 2018)

By Deborah Goonan, Independent American Communities
This month: several managers, former board members of association-governed communities either arrested or sentenced; mortgage fraud investigation continues in Florida; a developer and hotel owner is sued by owners of condo association for raising fees by 150%; environmental fraud in Massachusetts results in light sentence

 

Sentencing delayed for HOA embezzlers

Daily Journal staff report Jun 23, 2018 Updated Jun 23, 2018

Though a man and woman accused of scheming to embezzle nearly $2.8 million from the San Mateo Woodlake Condominium Association between 2007 and 2013 have been convicted of felony embezzlement, they will wait until later this summer to learn their fate after sentencing hearings scheduled for this week were continued, according to the San Mateo County District Attorney’s Office.

Former HOA manager Susan Lambert, 67, and co-conspirator Michael Medeiros, 61, are next expected to appear in court Aug. 14 and Sept. 14, respectively, for sentencing hearings, according to prosecutors. Having pleaded no contest to felony embezzlement and felony forgery and admitted she stole more than $100,000 in September of 2016, Lambert faces three years, four months in state prison. Because she agreed to testify in Medeiros’ trial — which ended May 11 when a jury found him guilty of felony embezzlement and felony grand theft, a judge chose to delay Lambert’s sentencing until Medeiros’ trial was adjudicated, according to prosecutors.

Now facing a sentence of eight years, eight months in state prison, Medeiros was immediately remanded into custody on no bail when his trial ended, according to prosecutors.

Read more:

https://www.smdailyjournal.com/news/local/sentencing-delayed-for-hoa-embezzlers/article_d8996e50-7696-11e8-95ef-2fd512569af8.html

The wheels of justice turn very, very slowly, when it comes to prosecuting financial crimes against association-governed communities. This case has already dragged on for 5 years since the condo association began to investigate what happened to $2.8 million. 

Condo association in Brickell tower says developer overcharged for shared facilities

The suit claims Mast Capital, which owns the building’s hotel portion, unlawfully jacked up the amount the condo had to contribute to its budget

By Keith Larsen | June 22, 2018 06:30PM

A condominium association in Brickell is suing its shared services provider, Mast Capital, alleging the developer unexpectedly and excessively raised the amount the condo owners had to contribute.

The Mayfield Condominium Association also claimed Mast Capital — which owns the hotel portion of the building — overcharged for some of these expenses, which include maintenance for some of the shared facilities such as security, mail delivery, accounting, admin expenses. The civil suit was filed last month in Miami-Dade Circuit Court.

Mast Capital owns the Conrad Hotel, which is the hotel portion of the 36-story building, called Espirito Santo Plaza at 1395 Brickell Ave. The property, also called Brickell Arch, has 103 luxury condos, along with offices and a retail component. The condo is also called Blue Arch.

The condo owners allege that the proposed 2018 budget for these total costs increased significantly to $733,109 this year, from $291,150 in 2017. That factors to a 150 percent increase.

As a result of these new costs, the condo association “requested to inspect the books and records of Mast Capital” in order to “attempt to understand for itself the reason for the inexplicable increases.” It alleges that Mast Capital has refused all demands by the association to inspect the books.

Read more:
https://therealdeal.com/miami/2018/06/22/condo-association-in-brickell-tower-says-developer-overcharged-for-shared-facilities/

Here’s an example of a mixed used condominium association — part commercial use (hotel, retail, and office) and part residential use. Residential condo owners allege that the developer, who also happens to own the Conrad Hotel, is overcharging condo fees and assessments for the residential condominium units. I’d say a 150 percent increase should raise some eyebrows! When condo unit owners demanded to view financial records, Mast Capital refused, thus prompting a lawsuit. 

 

Ex-manager at Sun City retirement complex in Indio pays $125,000 in embezzlement case

Amy DiPierro, Palm Springs Desert Sun

Published 3:27 p.m. PT June 18, 2018 |. Updated 3:36 p.m. PT June 18, 2018

The former general manager of an Indio retirement community accused of embezzling money from the development where he once worked paid $125,000 in victim restitution on June 4.

Ceasar Larrach, 47, was an employee of Associa/Desert Resort Management, the for-profit housing management company contracted to oversee Sun City Shadow Hills. The Indio development includes 3,450 homes for people ages 55 and over.

The Riverside County District Attorney alleged in a Jan. 19 complaint that Larrach stole about $104,000 from the Sun City Shadow Hills HOA between February 2015 and June 2017.

Larrach initially pled not guilty to three counts of grand theft, including an enhancement for fraud and embezzlement. But he reversed his pleading in May, and signed an agreement pleading guilty to all three of his charges and the enhancement. In addition to being ordered to pay $125,000 restitution, Larrach received a sentence of 36 months probation and 120 days custody, with electronic monitoring.

The former general manager of an Indio retirement community accused of embezzling money from the development where he once worked paid $125,000 in victim restitution on June 4.

Ceasar Larrach, 47, was an employee of Associa/Desert Resort Management, the for-profit housing management company contracted to oversee Sun City Shadow Hills. The Indio development includes 3,450 homes for people ages 55 and over.

The Riverside County District Attorney alleged in a Jan. 19 complaint that Larrach stole about $104,000 from the Sun City Shadow Hills HOA between February 2015 and June 2017.

Larrach initially pled not guilty to three counts of grand theft, including an enhancement for fraud and embezzlement. But he reversed his pleading in May, and signed an agreement pleading guilty to all three of his charges and the enhancement. In addition to being ordered to pay $125,000 restitution, Larrach received a sentence of 36 months probation and 120 days custody, with electronic monitoring.

Read more:

https://www.desertsun.com/story/news/crime_courts/2018/06/18/ex-gm-indio-sun-city-complex-pays-125-k-embezzlement-case/711212002/

Larrach apparently decided to plead guilty and pay $125,000 to the HOA to avoid a longer prison sentence. 

 

(Pixabay.com free image)

AG: Fitchburg man pleads guilty to falsifying water quality reports

Sentinel & Enterprise

06/16/2018 8::21 AM

BOSTON — The president of a Fitchburg-based private wastewater treatment and engineering company has pleaded guilty and been sentenced in connection with falsifying wastewater samples and test results at condominium complexes in Dover, Holliston, and Lunenburg, Attorney General Maura Healey said Friday.

Kent Oldfield, age 52, of Fitchburg, the president of New SRA Inc. and New England Engineering Group, LLC, pleaded guilty Thursday in Middlesex Superior Court to six counts of knowingly tampering with wastewater test methods and 14 counts of knowingly making false reports to the state’s Department of Environmental Protection under the state’s Clean Waters Act.

Following the plea, Judge Laurence D. Pierce sentenced Oldfield to three years of probation, 50 hours of community service focused on protecting the environment, a $19,500 fine, a four-month suspension of his wastewater operation certification, and additional reporting requirements for the full term of his probation.

“The state expects certified operators like the defendant to truthfully report that their wastewater discharge is safe,” said Healey. “Falsifying wastewater samples and test results puts the health of our residents and our water quality at risk.”

Oldfield’s company was certified to treat the wastewater for several privately owned condominium complexes in Lunenburg, Dover and Holliston.

Read more: http://www.sentinelandenterprise.com/breakingnews/ci_31947567/ag-fitchburg-man-pleads-guilty-falsifying-water-quality#ixzz5IvgpO9Hv

So, let’s get this straight.  Probation and a measly $19,500 fine for threatening the health and safety of residents of at least four different condo communities? Seems like a very light penalty, given the serious nature of the crime. 

 

(Pixabay.com free image)

Two Florida men get lighter prison sentences for cooperating in $5.8M Temple Terrace fraud scheme

By Frances McMorris, Reporter, Tampa Bay Business Journal
May 21, 2018, 2:42pm

Two men at a Tampa-based mortgage broker were hit with federal prison time for their roles in a $5.8 million fraud scheme involving the sale of condo units in Temple Terrace, but one of them in particular appears to be ready to testify against a Miami developer alleged to be part of the scheme.

Carlos Escarria, 61, of Largo was given an 18-month sentence by U.S. District Judge Susan C. Bucklew. The judge also sentenced the 35-year-old manager of Transcontinental Lending Group’s branch in Tampa, to 37 months in prison.

Both men were ordered to pay restitution. Escarria was ordered to pay more than $1.28 million while Tobon was ordered to pay more than $5.8 million.
Read more:

https://www.bizjournals.com/tampabay/news/2018/05/21/two-florida-men-get-lighter-prison-sentences-for.html

More reports of federal convictions for those involved in a conspiracy to commit mortgage fraud involving purchase of units in an apartment to condominium conversion in 2007-2008. The scam resulted in hundreds of mortgage loans being issued to unqualified condo owners. 

 

Money in the form of many large bills

President of homeowners association in Cypress accused of misusing funds

 By Leigh Frillici – Reporter
Posted: 5:53 PM, June 04, 2018 Updated: 1:18 PM, June 05, 2018

CYPRESS, Texas – A warrant is now out for the arrest of the Mark’s Glen Inc Maintenance Association’s President Kate Warth for Misapplication of Fiduciary Property.

Someone with knowledge of the case told KPRC that the HOA debit card that only Warth had access to, was used more than 700 times for personal use and expenditures amounting to nearly $100,000.

Read more (video):

https://www.click2houston.com/news/president-of-homeowners-association-in-cypress-accused-of-misusing-funds

See also:

Cypress homeowner’s association president accused of misusing funds turns herself in, bonds out

https://www.click2houston.com/news/cypress-homeowners-association-president-accused-of-misusing-funds-turns-herself-in-bonds-out

The money allegedly stolen by the HOA President should have been used to repair or redesign the neighborhood’s storm water drainage system, say homeowners. 

 

Property manager accused of stealing $77K from homeowners’ association

Updated May 30, 5:00 PM
Posted May 30, 5:00 PM

By Barbara Miller

A property management company manager is accused of stealing more than $77,000 from a Susquehanna Township homeowners’ association.

Christopher James Davis, 27, who operated Delaware Valley Property Management LLC, is charged with stealing $77,290.46 from the Waverly Woods development’s homeowners association accounts, Susquehanna Township police say.

Court records say that Davis provided fictitious monthly statements for a $35,000 CD he was supposed to have opened for the homeowners’ fund in February 2016.

Read more:

http://www.pennlive.com/news/2018/05/property_manager_accused_of_st.html

It’s fascinating to note that Mr. Davis has an A+ rating from BBB and certifications obtained through trade group Community Associations Institute. 

Delaware Valley Property Management website
Delaware Valley Property Management website (Screen capture May 31, 2018)

 

(Pixabay.com free image)

 

Park Ridge police: Property manager accused of stealing $50,000 from condo association

Jennifer Johnson, Pioneer Press

The following items were taken from the Park Ridge Police Department bulletin. An arrest does not constitute a finding of guilt.

Andrew J. Santucci, 29, of the 1100 block of Bristol Lane, Buffalo Grove, was charged with theft on May 25, police said. According to police, members of a Park Ridge condominium association alleged that Santucci stole more than $50,000 from the association’s bank accounts while he was serving as property manager of the complex, located on the 1000 block of North Northwest Highway. Court information was not listed.

Source:

http://www.chicagotribune.com/suburbs/park-ridge/news/ct-prh-blotter-tl-0607-story.html

Scroll down to “theft.” Another property manager arrested for embezzlement. 

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