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

By Deborah Goonan, Independent American Communities

This month’s roundup: light sentences and no jail for convicted HOA embezzlers; an affordable housing developer disappears with deposit money; and unqualified owners of affordable housing forced to sell the home.

No jail for man who stole $352K from Galloway homeowners group (NJ)

February 25, 2019
11:41 am
Lynda Cohen

A man who stole more than $352,000 from a Galloway Township homeowners association was sentenced to 90 days on an ankle bracelet and probation Friday.
Ira Binder was sentenced under the plea deal that had him pay $25,000 at sentencing and then $50 a month.

With $100,000 covered by insurance, that leaves more than 379 until the debt would be paid.

“It hurts my heart to know this man won’t suffer,” resident Patty Logue told the judge. “That this man is going to get a sweetheart deal and not feel any punishment.”

Logue lives on $1,600 a month in Social Security, with $500 of that going to medication for her health issues.

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No jail for man who stole $352K from Galloway homeowners group

I’m noticing a common theme. Convicted HOA thieves and embezzlers rarely serve time in jail, and almost never pay back the money they stole. The legal penalties are simply too light in comparison to the crime. Sure, the condo association has the option of filing a civil suit, but at additional cost. The HOA’s fidelity insurance policy maxed out at $100,000. Now condo unit owners are left to pick up the financial loss. In this case each household must pay an additional $30 per month in HOA fees, while the convicted felon is ordered to repay a mere $50 per month.

Call Waiting: Norwood condo developer owes buyers a bundle

Jilted buyers say Scott Call pocketed deposits

Posted: 5:00 AM, Feb 12, 2019 Updated: 11:53 AM, Feb 12, 2019
By: Dan Monk, WCPO

In September 2016, Scott Byron Call claimed to be indigent. Twelve months later, he claimed to be capable of financing a $12 million condo project.

“We have actually commitments to finish the first phase,” Call told Norwood Mayor Tom Williams in a Sept. 6, 2017 public hearing for Legacy Lofts.

Call described for the Norwood Planning Commission a captivating plan to tuck 112 affordable condominiums into the century-old Norwood Baptist Church and three vacant schools along Courtland Avenue.

Mayor Williams confirmed that the city did not want Call to build apartments at Legacy Lofts, but denies that the city interfered with Call’s investor. He also confirmed that the city never did a background check on the Legacy Lofts investor.

“It’s not really the city’s job to do a background check on a developer,” Matre said. “Their job is to review the project. Does it meet the zoning code regulations? Does it meet subdivision regulations? That’s their job.”

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Call Waiting: Norwood condo developer owes buyers a bundle

A would-be affordable housing developer took $5,000 down payments for condos that were never built. Norwood Planning Commission reviewed Scott Byron Call’s proposal to turn two old schools and a Baptist church in to 112 affordable condos.

However, Call never actually purchased the buildings, and his financing fell through. Call blames the city for refusing to consider apartments instead of condos. But he also has a history of passing bad checks and apparently lying about his past development experience.

Believe it or not, the city says it has no responsibility to check references and background of a real estate developer. 

Now the condo buyers are attempting to collect on court awards for their deposit refunds. Ohio Attorney General might investigate, if enough complaints are filed by the developer’s victims. In the meantime, Call has moved to North Carolina, where he formed a new corporation. 

One lawyer used client funds for Heat tickets, another was in a $3.25M scam. Then, trouble

BY DAVID J. NEAL, Miami Herald

JANUARY 27, 2019 02:14 PM. UPDATED JANUARY 28, 2019 07:38 AM

Though the last two discipline reports from the Florida Bar included a relatively light combined total of 19 attorneys combined, the stories behind the disbarments and suspensions have a little more weight.

There’s at least over $1 million in “misappropriated funds,” some of which went to Heat tickets. Lawyers victimized by fraud and lawyers who participated in fraud. And attorneys who took the money and, if not ran, disappeared, at least professionally.

So, below in Part 1 are the alphabetical first 10 of the 19. The remaining nine will be in Part 2, which will post Monday.

Read more here: https://www.miamiherald.com/news/business/article225156720.html#storylink=cpy

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One lawyer used client funds for Heat tickets, another was in a $3.25M scam. Then, trouble

The Miami Herald lists ten lawyers reprimanded, suspended, or disbarred for various forms of misconduct, including real estate fraud and misuse of trust funds for homeowners and HOAs. Read the article for details on bar complaints filed against Jeremy Alters of Glolde Beach, Elizabeth Anderson of Orlando, John Borland of Ocala, Aldo Busot of Coral Gables, Richard Carey of West Palm Beach, Robert Dixon of Miami, John Eagen of Tallahassee, and Peter Fellows of Miami, Eric Granitur of Vero Beach, and LaTonia Jackson of Miami. 

Arizona property manager gets 15 months in prison for stealing from HOAs
Ordered to pay back $291,000

February 11, 2019 Ben Lane, Housing Wire

The former CEO and president of an Arizona property management company will spend the next 15 months in prison after admitting to stealing hundreds of thousands of dollars from several homeowners’ associations.

According to the U.S. Attorney’s Office for the District of Arizona, Harlow White received a sentence of 15 months in jail after pleading guilty to money laundering for using stolen client funds to enrich himself.

Court documents show that White was the president and CEO of Eagle Property Management, a property management company that served HOAs throughout the Phoenix area. In 2005, the ownership of the company was transferred to White’s daughter and the company renamed EPMI.

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Arizona property manager gets 15 months in prison for stealing from HOAs
Ordered to pay back $291,000

Let’s do some math. Harlow White admitted to stealing $1.2 million from HOA accounts. But after his guilty plea, the court only ordered him to repay $291,000. Who about the other $909,000? Did HOAs submit insurance claims for those losses? Or did homeowners have to pay out of their own pockets to make up for HOA budget shortfalls? Here’s the official US Dept. Of  Justice press release

Light-fingered homeowners’ group prez gets 5 years’ probation, must repay $300K

Updated Feb 6; Posted 1 yr ago

By Frank Donnelly | fdonnelly@siadvance.com

STATEN ISLAND, N.Y. — He’s repaying a lot of money, but at least the former president who bilked his Rossville homeowners’ association of more than $300,000 has his freedom.

Danny Juliano, 51, was sentenced Friday to five years’ probation for using the Woodbrooke Estates Homeowners’ Association’s checking account as his personal piggy bank.

Juliano, who is on the hook for $300,000 in restitution, has repaid $200,000, said Assistant District Attorney Jeffrey Curiale. He must shell out the remaining $100,000 while on probation.By Frank Donnelly | fdonnelly@siadvance.com

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Light-fingered homeowners’ group prez gets 5 years’ probation, must repay $300K

Former HOA President Juliano was also a civilian employee with a local police department when he wrote checks to himself, claiming the money was used to purchase pool supplies for the HOA. He later confessed to the crime. Reports say Juliano has authority to sign checks. Apparently no one else on the board was co-signer, because it took 4 years for other board members to notice what was going on. 

Condo for sale after Olympia power couple violates affordable housing rules

Author: Chris Ingalls
Published: 12:00 PM PST January 21, 2019
Updated: 6:54 PM PST January 21, 2019
BELLEVUE, Wash. — A “for sale” ad is now posted for a condominium in the Old Bellevue neighborhood listing the unit for $263,652.

It’s a stand-out, low price in a posh neighborhood where condos are pushing a million dollars are everywhere, but that’s the price that A Regional Coalition for Housing (ARCH) affordable housing has set for the unit’s owners, John Aultman and his wife Nona Snell-Aultman.

Aultman, senior education policy adviser for Washington Governor Jay Inslee, and Snell, chief deputy clerk of the Washington House of Representatives, have been forced to sell the unit they own at the McKee Condominiums after ARCH determined they violated one of the program’s strictest policies.

The Aultmans purchased the McKee condo in 2009 for $206,000 after it had been on the market for more than 60 days. Under current ARCH rules, if a unit does not sell in 60 days the low- to moderate-income restrictions that buyers must meet are lifted. The Aultmans’ income and the fact that they already owned a house in Olympia did not disqualify them from purchasing the unit from a Bellevue teacher who had been trying to sell her ARCH condo for more than two months.

Read more (video):

Condo for sale after Olympia power couple violates affordable housing rules

How did two Washington state employees manage to purchase an affordable condo for  $206,000 in 2009, even though they didn’t qualify as low-to-moderate-income buyers? Unbelievably, the ARCH program only gives the seller a short 60-day window to sell his or her condo at the “affordable” price to a qualified buyer. After 60 days, the homebuyers don’t have to meet low-to-moderate-income thresholds. 

So, under the current system, a buyer with the means to afford a much higher market price can end up paying an artificially low sale price.

After the Aultmans snagged their bargain condo, they purchased a single family home in another city, and moved out of their condo. But the ARCH contract says its condo units are for owner-occupants only. 

The Autmans weren’t cited with a contract violation until 2018. Now they must sell  their condo for a little more than $236,000, ARCH’s calculated value of the unit as of 2016, the year they moved out of their unit.  But even though the condo owners must absorb their lost equity, it’s a low price to pay, since the couple was able to live at below market  housing rates from 2009 through 2015.

ARCH directors are reportedly reevaluating their affordable housing policies, to avoid similar incidents in the future. 



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