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

By Deborah Goonan, Independent American Communities

This month: An affordable housing bribery scheme; Condo election ballot fraud; one community association manager sentenced and another under investigation for massive fraud and embezzlement involving dozens of condo HOAs.

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Bribes for affordable co-op apartments (NY)

New York District Attorney Eric Gonzalez recently indicted three women in an alleged affordable housing fraud scheme. Two co-op board members of Luna Park and office manager of Metro Management are accused of taking $874,000 in bribes from at least 18 buyers.

According to reports, the three women – co-op board president Anna Treybich, board treasurer Irina Zeltser, and office manager Karina Andriyan – allegedly falsified housing applications.

By claiming applicants were relatives of existing residents, they were abe to skip the long waiting list of 25,000 other applicants.

If convicted the three women charged in the bribery scheme face up to 15 years in prison.

Luna Park is a price-controlled 1,600-unit housing cooperative development in Coney Island, and part of New York City’s Mitchell-Lama affordable housing program.

The Office of Housing Preservation & Development oversees Mitchell-Lama housing in the City, but each eligible provider has its own application process.

In a recent public statement, the DA acknowledges that it’s an “open secret” that housing providers have been taking bribes for many years.

All eighteen applicants admitted to Luna Park under false pretenses are also under investigation. They could face charges, as well as eviction.

The applicants paid tens of thousands of dollars in cash and valuables to obtain an apartment at the Brooklyn co-op. Clearly, they didn’t financial help with housing.

News Sources:

Co-op Board Members Charged With Taking $874,000 in Bribes
Habitat Magazine, May 22, 2019

3 Women Who Controlled Affordable Housing Complex Took $875,000 in Bribes to Favor Applicants, District Attorney Says
The co-op has nearly 1,600 apartments and houses about 6,000 people
By Rana Novini, NBC 4, New York
Published May 21, 2019 at 12:23 PM | Updated at 7:04 PM EDT on May 21, 2019


Alleged condo election fraud (FL)

Florida’s Department of Business and Professional Regulation (DBPR) recently referred a suspected case of ballot fraud to the Marco Island Police Department.

Five unit owners from Belize Condominium Association, of Belize at Cape Marco, filed complaints with DBPR, alleging ballot fraud during the Association’s March 2019 election.

Owners obtained expert evidence that 2 incumbent board members, Victor Rios and Joseph Shady, were re-elected based upon forged signatures on 16 ballots cast in the election.

Florida Department of Law Enforcement is currently investigating the charges.

In Florida, signature forgery is a third degree felony, subject to fines and up to $5,000 and as many as five years in jail.

Although the condo HOA industry trade group likes to advise owners to “get involved” and “run for the board,” they rarely acknowledge the common problem of election fraud.

News Source:

Complaint Alleges Fraud in Condominium Election
Coastal Breeze News| May 24, 2019 | By Steve Stefanides


Property manager sentenced to 2 1/2 years in jail (SC)

S. District Judge David Norton sentenced former certified community association manager, Karen Colie, to 2 1/2 years in prison, and ordered her to pay more than $770,000 in restitution to at least 19 condo associations.

Judge Norton acknowledged that Colie will probably never be able to repay the debt owed to her former clients.

Colie is the former owner of Marshland Communities, a management firm in the Charleston area. She pled guilty last fall to one count of wire fraud, tied to fraudulent billing practices that took place from 2011- 2016.

As previously noted here in IAC in 2016, Up to 50 condo associations sued Colie and her defunct company, when news of the fraud investigation went public.

Colie’s well-known community association management firm served dozens of condominiums in South Carolina. The company’s website boasted that all staff members were trained and certified by management trade group, Community Associations Institute (CAI).

News Source:

Charleston property manager gets prison for defrauding communities of more than $700K
By Angie Jackson ajackson@postandcourier.com
Apr 30, 2019 Updated Apr 30, 2019


 

How could such egregious fraud escape detection for more than ten years? (MD)

Maryland Attorney General Consumer Protection Division recently filed charges against Evergreen Management, LLC, in an alleged massive fraud and embezzlement scheme.

Evergreen Management owners, Jason Barry Oseroff and his late father Ivan Oseroff, allegedly took $2.5 million from up to 13 of the condo and homeowners’ associations they managed.

More details here at IAC:

Why did it take years to discover a $2.5 million HOA fraud scheme?

 

A common theme in long-term embezzlement schemes — board members put too much trust in a manager or single board member, and don’t keep a close eye on the association’s bank accounts. ♦

News Source:

Maryland property management company accused of misusing nearly $2.5 million in HOA, condo fees
Posted: 5:14 PM, May 01, 2019, WMAR, Mallory Sofastaii
Updated: May 2, 2019