HOA, condo & co-op corruption and fraud roundup (Jan 2019)

By Deborah Goonan, Independent American Communities

 

Long list of HOA theft and embezzlement in this month’s roundup, as well as attorney misconduct. The industry can no longer claim “isolated incidents.”

Former manager accused of taking more than $100,000 from Lincoln Village area HOA

By Wes Bowers
Record Staff Writer

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Posted Jan 25, 2019 at 5:18 PM
Updated Jan 25, 2019 at 5:18 PM

STOCKTON — The former manager of a Lincoln Village area homeowners association has been accused of bilking residents of more than $100,000 over the past two decades.

The Lake Lincoln Association Inc. is suing resident Daniel Lucchesi for fraud, negligence and other charges in San Joaquin Superior Court.

A mandatory settlement conference is scheduled for April 15 in Department 10C in front of Judge Holly Carter. A jury trial is expected to begin May 13 in the same department, according to court records.

A complaint was filed with the court in October 2017 alleging Lucchesi and Katzakian Property Management stole an unknown amount of money from the association, beginning as early as 1999.

The complaint also alleges that as many as 100 unknown individuals are liable for the association’s financial loss.

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Former manager accused of taking more than $100,000 from Lincoln Village area HOA

It’s always a red flag for me when I learn that the same board member or manager has had unfettered control of HOA funds for many years. That’s the perfect opportunity for any would-be embezzler. And in this case, it appears Lucchesi, a board member/manager, and Katzakian Management were both involved in unauthorized withdrawals of money from Lake Lincoln Association. 

IAC readers may recall from a previous post that Katzakian Property Management is a co-owner of the troubled Louis Park Estates Condominiums. The community was in the news last summer when Stockton code enforcement ordered that dangerous balconies be shored up. That prompted a $2,600 per unit special assessment.

According to the Katzakian Management’s website, the firm has been in business since 1978. Katzakian is a member of Community Associations Institute, where staff obtains continuing education and training.

EHT man pleads guilty in $352K theft

Lynda Cohen, Breaking AC, Jan. 19, 2019

An Egg Harbor Township man has pleaded guilty to stealing more than $350,000 while he was office manager for a Galloway Township condominium association.

Ira Binder, 61, originally thought he would be paying back the money, attorney Steve Scheffler explained after the plea Thursday.

“Unfortunately, it got to a point of no return,” he said.
From January 2010 to February 2017, Binder took $352,620 from The Club at Galloway Condominium Association.

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EHT man pleads guilty in $352K theft

Did you catch the last part of this article? Binder will only pay be $25,000, and then make payments of $50 per month. At age 61, the former office manager will never repay anywhere close to the amount he admits to stealing from his condo association. Hopefully the condo association had fidelity and crime insurance to cover the loss.  

Clearwood Association Alleges Former Bookkeeper Embezzled Nearly $300K

By Megan Hansen mhansen@yelmonline.com Jan 17, 2019

The Clearwood Community Association filed a civil complaint in Thurston County Superior Court Nov. 30 alleging its former bookkeeper embezzled nearly $300,000 and that the amount could in fact be more.

The lawsuit against Dolanna K Burnett, her husband and their businesses, claims the bookkeeper wrote multiple checks to herself and covered it up in the accounting system dating back to 2014.

Burnett has a previous conviction in 2014 for theft, identity theft and forgery for making counterfeit refund checks totalling $17,000 while working for the Tacoma Health Department and depositing them into her personal account.

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Clearwood Association Alleges Former Bookkeeper Embezzled Nearly $300K

Clearwood HOA filed a civil lawsuit, while the criminal investigation is underway. According to the article, the association will file a claim with their insurance provider to cover the losses. 

Burnett’s company, Lovolt Communications, is listed on BBB as a Telecommunications Equipment Repair company, with A+ rating. The company’s website was inactive at the time of this post. 

 

HOA official accused of pocketing nearly $100,000

Posted: Thu 10:18 AM, Jan 17, 2019

BEAUFORT COUNTY, NC (WITN) – The secretary/treasurer of an Eastern Carolina homeowner’s association is accused of pocketing nearly $100,000 from the group.

Beaufort County deputies charged Charlotte Cutler with embezzlement on January 10th.

The woman was an officer for the Mixon Creek Homeowner’s Association and deputies say she took over $97,000 from the association’s bank account.

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HOA official accused of pocketing nearly $100,000

Mixon Creek HOA is a small, rural planned community of homes on 1 and 2 acre lots, on the north shore of the Pamlico River, with annual membership dues of $200. Doing the math, a $100K theft is equal to 500 annual dues payments.

 

HOA embezzler to get three years, four months prison

Judge expresses the intent to sentence woman who stole $2.8M from Woodlake

Daily Journal staff report Jan 11, 2019 Updated Jan 11, 2019

More than five years after a scheme to embezzle some $2.8 million from the San Mateo Woodlake Condominium Association between 2007 and 2013 came to light, the HOA’s former manager learned she will be sentenced to three years, four months in state prison Thursday, according to the San Mateo County District Attorney’s Office.

Though Susan Lambert, 58, was set to be sentenced for her felony convictions Jan. 10, Judge Elizabeth Lee indicated she would impose a prison sentence of three years, four months in state prison and order restitution of $2.84 million to the victims Feb. 13 after Lambert’s defense attorney George Eshoo allegedly asked for a delay in his client’s surrender date so she could get her affairs in order, according to prosecutors.

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HOA embezzler to get three years, four months prison

Quite a light prison sentence for stealing $2.8 million while serving as manager of a condo association. Lambert testified against her accomplice Michael Medeiros, who was sentenced to 7 years in state prison. Lambert’s defense attorney said his client has a gambling problem. If that’s true, how will she pay back the $2.84 million she admits to embezzling over the course of 6 years?

 

Condo association says employee stole $100,000 over 14 years

A Lee County condo association said someone working for them for 14 years stole more than $100,000.

Thursday, January 10th 2019, 5:25 PM EST by Michael Raimondi
Updated: Thursday, January 10th 2019, 5:43 PM EST

The case is under investigation by County Deputies, but no arrest has been made.

Source:

Condo association says employee stole $100,000 over 14 years

Miami Foreclosure Lawyer Disbarred After He and Lover Move Into Client’s House

The lawyer obtained power of attorney and listed himself as a permanent guest at his client’s house.

By Samantha Joseph | December 28, 2018 at 01:23 PM
Daily Business Review

Miami attorney Peter Dale Fellows is facing disbarment after moving into a client’s home during a foreclosure case.

Fellows has been practicing in Florida since 1999, according to his Florida Bar record. But his career derailed over a real estate acquisition involving his legal assistant, who was also his lover, according to court records.

The ethics case against him stemmed from his representation of Phillip Thompson, a Pembroke Pines homeowner facing foreclosure by Deutsche Bank after filing for Chapter 7 bankruptcy protection but failing to be discharged from the mortgage debt. Years after the bank sued, Thompson learned he still owned the house and received an unsolicited call from Fellows’ assistant, Sherine Wright, who offered help with a short sale.

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Miami Foreclosure Lawyer Disbarred After He and Lover Move Into Client’s House

Link to ethics case.

Zombie foreclosures are easy targets for attorneys, who sometimes take advantage of desperate homeowners facing foreclosure and debt collectors. When homeowner Phillip Thompson filed for Chapter 7 bankruptcy nearly a decade ago, he thought he was rid of his Pembroke Pines home.

When he found out he still owned the home, which was in foreclosure, Fellows and his assistant/lover took advantage of the fact that Thompson no longer lived in the home. The pair simply told the HOA that they were ‘permanent guests,’ obtained access to the community, and moved in. 

Another former client filed a separate complaint against Fellows, who was ultimately disbarred.

 

Association’s treasurer accused of embezzlement

By Josh Gully The Northern Virginia Daily Jan 3, 2019

FRONT ROYAL — Elizabeth Joan Boyd, 48, was recently charged on six felony counts of embezzlement stemming from her time as the Lake Front Royal Property Owner’s Association’s treasurer.

Warren County Sheriff’s Office Sgt. Daniel Maxfield said over the phone that the office began an investigation into the matter after receiving a complaint from the association’s board regarding embezzlement in excess of $30,000.

A criminal complaint by Maxfield states that she embezzled over $500 from the property owner’s association each month from September 2017 through February 2018. He said over the phone that the amount embezzled each month, however, could have been much greater than $500.

Lake Front Royal became a sanitary district in 2016, at which point the county began collecting fees that were collected by the association for neighborhood maintenance. While the neighborhood pays fees to the county for maintenance, County Administrator Doug Stanley said the association has continued operating and mainly oversees the neighborhood’s lake and dam.

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Association’s treasurer accused of embezzlement

Lake Front Royal is a common interest community that was once governed primarily by a Property Owners Association (POA or HOA). In 2016, the governance of most of the community’s maintenance shifted to a “sanitary district” – a county special tax district. However, the POA still collects a smaller sum of money from homeowners for the lake and dam. Boyd served as Treasurer, and is accused of using the HOA’s bank cards to access cash for personal use. 

 

Grand jury adds embezzlement charges to HOA case

By Paul Lagasse plagasse@somdnews.com Jan 1, 2019

A Charles County grand jury has handed down indictments against five people accused of stealing money from the South Hampton Homeowners’ Association, including embezzlement charges for the two HOA officers who were allegedly involved in the scheme.

Read more: (subscription)

Grand jury adds embezzlement charges to HOA case

See also:
South Hampton HOA president, treasurer charged with felony theft
By Paul Lagasse plagasse@somdnews.com Oct 16, 2018

 

Condo association accused of numerous misdeeds; attorney says behavior is the norm

CONTRACTS
By Carrie Bradon | Dec 21, 2018

DESTIN — A condominium improvement association is being sued by numerous residents for breach of contract and breach of fiduciary duties.

According to NWF Daily News, the Holiday Isle Improvement Association in Destin was sued Dec. 4 after allegedly committing breach of contract, among other allegations.

The lawsuit states that since 2016 the group has not had accurate meeting minutes and what was produced was not what occurred in the meetings but only what certain board members wanted to be recorded.

The group is also accused of wrongdoings in discrimination, pornography, disparate treatment, illegal behavior of officers and misuse of funds.

Peter Vujin, a Miami attorney, said this type of situation is common in Florida.

“This is a very typical situation in the state of Florida, since the condominium market is Florida’s No. 3 business,” Vujin told The Florida Record. “Because there is no condominium corporate books supervision by an independent governmental body, it is far too easy for the management for forge fake condominium fees, far too easy for the management to ‘mismanage’ the funds or simply steal the same via kickbacks from the contractors that the condominium owners pay for.”

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Condo association accused of numerous misdeeds; attorney says behavior is the norm

Are the tables turning against the condo/HOA industry? It would appear so, when attorneys are willing to boldly declare that corruption and self-dealing are the norm among association governing bodies. Check out the link to the NWF News article for details of allegations against Holiday Isle Improvement Association. Notice that the former Mayor of Destin just so happens to be on the condo board for Holiday Isle. It is increasingly common for elected officials of local and state government to serve on their condo, co-op, or HOA boards. By now it should be crystal clear that concurrently serving two offices — city or state and one’s HOA — is a blatant conflict of interest.