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

By Deborah Goonan, Independent American Communities

It seems the late summer lull for reports of illegal sheninigans in HOA-ville is over. September brings a bumper crop of new reports from across the U.S.

Elderly Seal Beach Woman Accused Of Embezzling Over $100K

This 71-year-old Seal Beach woman was arrested Saturday on charges embezzling from her homeowner’s association.

By Ashley Ludwig, Patch Staff | Sep 24, 2018 6:40 pm ET

SEAL BEACH, CA — A 71-year-old Seal Beach woman was accused of embezzling over $115,000 from the Costa Mesa homeowner’s association, of which she was treasurer, court documents said.

Bonnie Diane Harris, 71, of Seal Beach, served as the former treasurer for the Cedar Glen Homeowner’s Association, and was scheduled Monday to make her initial court appearance on charges of embezzling more than $115,000.

Harris was arrested Saturday on charges filed Sept. 12. She faces 36 felony counts of embezzlement by fiduciary of trust, with sentencing enhancement allegations of property damage exceeding $65,000.

Read more:

https://patch.com/california/losalamitos/elderly-seal-beach-woman-accused-embezzling-over-100k

Prosecutors are hoping the suspect doesn’t bail out of jail, because she might flee to a home she owns in France.

Woodstock man accused of embezzling $50K gets accelerated rehab

By John Penney
jpenney@norwichbulletin.com, (860) 857-6965

Posted Sep 20, 2018 at 2:18 PM
Updated Sep 20, 2018 at 7:52 PM

DANIELSON — Over the objections of prosecutors, but with the support of his victims, a 37-year-old Woodstock man who is accused of embezzling more than $50,000 from a local condo association was granted an accelerated rehabilitation program on Thursday.

If Derek Jette abides by the strictures of the two-year diversionary program – including not taking any position that entails financial responsibility – the first-degree larceny charge against him will be dropped.

Inside Danielson Superior Court, Assistant State’s Attorney Jennifer Barry said her office objected to the granting of the program based on the amount of money stolen over a long period of time.

“This was systematic embezzlement by a person in a fiduciary trust position,” she said. “The stolen money was spent on food, gas and alcohol.”

Jette’s lawyer, Christian Sarantopoulos, said a recent civil judgment pegged the amount of money stolen at $52,453. He said his client used his retirement savings to pay the association more than $95,000, including various costs and fees.

Sarantopoulos said the “genesis” of the crime was Jette’s alcohol addiction.

Read more:

http://www.norwichbulletin.com/news/20180920/woodstock-man-accused-of-embezzling-50k-gets-accelerated-rehab

Condo owners have shown some mercy against their former Treasurer, who has repaid much of the money he was accused of taking from the Association. But the big question here is this: will accelerated rehab deter Jette from committing a similar crime in the future?

Money-100-dollar-bills-theft-embezzlement
(Pixabay.com free image)

Draper & Kramer misled buyer in Lincoln Park condo tower, lawsuit claims

The company failed to disclose upcoming assessment fee hikes, a condo owner says

By Joe Ward | September 19, 2018 09:00AM

A condo owner is suing Draper & Kramer, claiming the company’s property management arm and a condo board lured him to buy a Lincoln Park residence under false financial pretenses.

Robert Cohen in July 2017 bought a unit in the Park West building, 444 West Fullerton Parkway, for $330,000. A subsidiary of Chicago-based Draper & Kramer, DK Condo, manages the building.

The company, which handles sales in the building, is responsible under city ordinance to provide certain information about the building and its finances to prospective buyers. DK Condo did produce the materials — but the information included “false statements and/or material omissions,” the suit filed in Cook County alleges.

One issue is the company said there were no planned special assessments — a fact Cohen says wasn’t true.

Read more:

https://therealdeal.com/chicago/2018/09/19/draper-kramer-misled-buyer-in-lincoln-park-condo-tower-lawsuit-claims/

The lawsuit alleges that the management company failed to disclose to the buyer that the condo association was planning a $1.7 million capital improvement project, financed by a $3.3 million line of credit.

Employees used vendor’s condo; company paid for private repairs, DEMCO audit finds

BY DAVID J. MITCHELL | DMITCHELL@THEADVOCATE.COM SEP 16, 2018 – 4:07 PM

A much-anticipated internal audit of Dixie Electric Membership Corp. has found that at least two employees were given use of a Gulf Coast condominium owned by one of the nonprofit utility’s vendors.

That and other findings come as the utility prepares to go before the state’s Public Service Commission this week.

In 2015 and 2016, for instance, DEMCO’s top five highest compensated contractors earned a combined $14.5 million to $14.7 million annually from the ratepayer-supported utility, IRS nonprofit filings show.

Pierce said the employees’ use of the condo is a violation of DEMCO ‘s current code of ethics. At the time the condo issue first came to light a few years ago, DEMCO’s management directed the vendor to stop the practice immediately.

The finding is one of a handful uncovered by audit firm Postlethwaite & Netterville, which has recently finished a probe into allegations of improper relationships among vendors and board members and top officials at the Baton Rouge-area utility.

Read more:

https://www.theadvocate.com/baton_rouge/news/article_95401d84-b903-11e8-b0f9-9b984b28f761.html

A recent audit of DEMCO, a private utility company in the Baton Rouge (LA) area, uncovered unethical behavior on the part of two of its employees. Will the DEMCO investigation also prompt an audit of the condo association involved?

Stick figure money dollar signs

Lawsuit claims Winter Springs mayoral candidate received kickbacks from HOA landscaper

By Martin E. ComasContact Reporter
Orlando Sentinel

September 17, 2018 4:10 PM

A homeowners association has filed suit accusing a Winter Springs mayoral candidate of authorizing a company to perform maintenance projects in the neighborhood, setting the prices and then receiving kickbacks from the company while he served on a landscaping and maintenance committee.

Winding Hollow Homeowners Association is seeking at least $2,500 in damages from former association board member Ken Spalthoff, according to a civil lawsuit filed in circuit court.

However, after a recent investigation by the Winter Springs Police Department state prosecutors determined that no money was fraudulently taken from the homeowners group, a spokesman for the State Attorney’s Office said in a written statement.

“All services appeared to have been done at below market value and to the satisfaction of the HOA [homeowners association] and its members,” said the statement released by Todd Brown with the State Attorney’s Office in Viera. “The evidence determined the homeowners approved of the projects and were pleased with the results. There was no evidence that the fees charged were inflated or padded to compensate for the commission paid to Spalthoff.”

Brown added that state law prohibits state or county officers from similar arrangements, but it is “not applicable to HOA board members.”

Read more:

https://www.orlandosentinel.com/news/seminole/os-winter-springs-mayoral-candidate-sued-20180917-story.html

Even though the landscaper directly approached the HOA and told them about the kickback scheme, a Florida State Attorney says their investigation shows no laws have been broken. 

Spalthoff, a Mayoral candidate, denies any inappropriate behavior, and says the HOA lawsuit against him is politically motivated. 

Phoenix property manager pleads guilty to stealing $1.3M from HOAs

BY ASSOCIATED PRESS
SEPTEMBER 17, 2018 AT 6:32 PM

PHOENIX – The former head of a Phoenix-area property management company accused of stealing nearly $1.3 million from homeowners associations has agreed to a plea deal to spare his wife prosecution.

According to court documents made available Monday, Harlow White has agreed to plead guilty to one felony charge of transactional money laundering.

He and his wife were indicted last year on other charges including conspiracy to commit money laundering.

Under the proposed agreement, the indictment against Nancy White would be dismissed. Other charges against Harlow White would also be dropped.

Read more:

http://ktar.com/story/2221769/phoenix-property-manager-pleads-guilty-to-stealing-1-3m-from-hoas/

It’s a family affair, now that Harlow White and three other former family employees of Eagle Management face sentencing, following plea deals that resulted in dropping charges against Nancy White.

Audit report money theft fraud

Attorney charged with stealing over $93,000 from his homeowners association

August 29, 2018

WHITE PLAINS – An attorney and former board member of the Pleasant Ridge Homeowners Association in Valhalla has been arrested and charged with felony grand larceny for allegedly stealing $93,955 of the group’s money.

It is alleged that John Pacor, 43, whose wife is a former president of the homeowners association and whose mother was the treasurer, allegedly deposited 51 checks from the association into his own checking account for his own purposes.

He allegedly committed the crime between November 2012 and April 2014.

Read more:

http://www.midhudsonnews.com/News/2018/August/29/Pacor_arr-29Aug18.htm

See also:
Westchester Man Busted Stealing Nearly $100K From Homeowners Association (Yonkers Daily Voice)
https://yonkers.dailyvoice.com/news/westchester-man-busted-stealing-nearly-100k-from-homeowners-association/741396/

Some obvious conflicts of interest in this case: mother, son and son’s wife all served on the board.  Pacor’s mother served as treasurer, his wife was president, and Pacor himself is an attorney. 

According to this Fios1 News video, Pleasant Ridge HOA has only 26 homes, and 19 households are headed by seniors. Not only is Pacor accused of stealing nearly $100K, all three members of his family are being sued for nonpayment of assessments for the past 5 years. 

Ex-HOA president gets probation, fine after accusations of stealing money from association

By Aaron Barker – Senior Web Editor
Click2Houston
Posted: 10:39 AM, August 29, 2018
Updated: 10:39 AM, August 29, 2018

HOUSTON – The former president of the Cole’s Crossing Homeowner’s Association in Cypress was sentenced to probation Monday as part of a plea deal related to accusations that he stole money from the HOA.

Court records showed Nathaniel Hurt pleaded guilty to theft greater than or equal to $750 but less than $2,500. In exchange, he was sentenced to two years of probation and ordered to pay a $500 fine.

Read more:
https://www.click2houston.com/news/ex-hoa-president-gets-probation-fine-after-accusations-of-stealing-money-from-association

This former HOA President claimed he purchased security cameras for his HOA, then submitted invoices and reimbursed himself for the cost. But after the vendor confirmed they never did business with Cole’s Crossign HOA, Hurt admitted that he never purchased the cameras. 

Judge court legal money gavel
Pixabay.com free image

‘I smelled a rat’ bidder says of a Tampa Bay foreclosure auction. Others did too

Susan Taylor Martin
Tampa Bay Times
Published: August 31, 2018

While checking on August foreclosure auctions, Peter Filippello found a townhouse in Largo he liked.

He did “a little digging” and discovered that the company foreclosing and the company being foreclosed were headed by the same person — Clearwater lawyer Roy C. Skelton.

“I smelled a rat so I got out,” Filippello said. “The plaintiff was one and the same as the defendant. How can somebody sue themselves or put a judgment on themselves?”

Filippello wasn’t the first person to have issues with a foreclosure auction involving Skelton-connected companies. Last year, a judge threw out the $458,100 sale of a Redington Beach condo because of what he called an “unscrupulous” scheme by Skelton to trick bidders.

Filipello also noticed that the auction was on a second mortgage. That meant a bank holding a first mortgage could foreclose and take back the townhouse. A bidder could pay more than $100,000 only to have nothing to show for it.

Filippello decided not to bid. He didn’t like that the auction was on a second mortgage and that Skelton was connected to both the plaintiff and the defendant.

“Being a lawyer, he shouldn’t be doing things like that,” he said.

Read more:

https://www.tampabay.com/news/business/realestate/-I-smelled-a-rat-bidder-says-of-a-Tampa-Bay-foreclosure-auction-Others-did-too_171288201

Skelton has now tried three times to scam buyers at HOA foreclosure auctions. Bidding at an HOA foreclosure auction is truly a Buyer Beware transaction.

And readers don’t know the facts leading up to the HOA foreclosures in the first place. As attorney, real estate investors, and lender, one has to wonder whether Skelton also had inside knowledge of foreclosure auctions from someone connected to the homeowners or condo associations.

Why isn’t Florida’s Attorney General investigating Skelton and his many intertwined companies?

A lawyer got $367,000 after the dead woman’s condo was sold. Then he bounced IRS checks

BY DAVID J. NEAL
dneal@miamiherald.com

September 02, 2018 01:08 PM
Updated September 03, 2018 11:15 AM
UPDATE: In a Monday morning email to The Miami Herald, John Admire, the attorney for Gertrude Weiner’s estate personal representative, said “Last month, Rene Garcia paid the estate $150,000 to cover what was not paid to the IRS and other costs of collection.”

As the closing agent on the sale of a dead woman’s condominium, South Miami lawyer Rene Julian Garcia received $367,073 into his trust account. But when her estate and the Florida Bar began asking about $148,000 in bounced checks to the IRS on the woman’s behalf, Garcia came up with excuses and stalling worthy of an irresponsible teenager:

Bank mistake. My mistake — issued the checks from the wrong account. The checks aren’t in the mail; they were delivered. Personal banker at Chase is out this week. Can’t access the trust account online on the cellphone from Uruguay. Grandmother died two weeks after suffering a stroke on Mother’s Day.

The state Supreme Court ended Garcia’s excuses with a suspension followed by disbarment last month.

Read more here: https://www.miamiherald.com/news/business/article217735215.html#storylink=cpy

A financial examiner’s report says that there was $26 in Attorney Rene Julian Garcia’s trust accounts. No wonder the checks to the IRS bounced.

American Tax
 

Woodlake embezzler sentenced

Scheme involved false invoices at San Mateo homeowners’ association

Daily Journal staff report Sep 15, 2018 Updated Sep 15, 2018

A man accused of embezzling millions of dollars from the San Mateo Woodlake Condominium Association between 2007 and 2013 was sentenced to seven years state prison Friday and was ordered to split the restitution with his co-conspirator, according to the San Mateo County District Attorney’s Office.

Michael Medeiros, 62, was ordered to split the $2.84 million in restitution with Susan Lambert, 67, for crimes they committed over the course of six years that directly affected residents of the homeowners’ association.

Lambert, who agreed to testify against Medeiros, 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 and is scheduled for sentencing Oct. 11. 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.

Read more:

https://www.smdailyjournal.com/news/local/woodlake-embezzler-sentenced/article_14464b66-b88d-11e8-a567-a3239a48cef1.html#comments

After a five year saga of investigations, culminating in two trials, sentencing begins. But some critics wonder why Michael Medeiros is getting seven years in prison, while the apparent mastermind of the fraud, Susan Lambert, only faces about three years in prison, to be determined on October 11, 2018. That’s the value of making plea deals. 

The pair have been ordered to make restitution of $2.8 million, but it’s unclear whether either Lambert or Medeiros have the assets to fulfill their legal obligations. 

Advertisements

Have something to say? Share with other readers!

This site uses Akismet to reduce spam. Learn how your comment data is processed.