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

By Deborah Goonan, Independent American Communities (debgoonan@icloud.com)

This month: Nevada Real Estate Division suspends licenses of two HOA managers. Two former HOA treasurers, from communities in two different states, stand accused of embezzling money from their neighbors. In another case, the HOA treasurer allowed her son to “help” with bookkeeping, leading to unauthorized access of association’s money.

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CIC Commission revokes licenses of two HOA managers for fraudulent activity (NV)

Thanks to Jenn W. For alerting me to these recent NRED actions. NRED is an administrative regulatory agency. Its investigations are separate from any criminal prosecutions that may be conducted on community association managers. 

Nevada Department of Real Estate Common Interest Community (CIC) Commission recently considered accusations against two community association managers of HOA-governed communities.

Until June 2018, Malinda Baldridge was a supervisory community manager employed by Eugene Burger Management Company (EBMC). Shortly after her resignation, EBMC initiated an investigation into financial discrepancies that occurred at several HOAs managed by Baldridge.

Fake checks, forged signatures

EBMC’s investigation revealed that, while Baldridge served as a board officer for EBMC-managed Sky Vista HOA, she allegedly falsified a $45,000 check to a bogus vendor, and forged the signature of a second HOA officer.

EBMC discovered similar nefarious activity at Eldorado Hills HOA and Stonefield II HOA. Their investigation uncovered nearly $420,000 in fraudulent checks written to non-existent vendors, with forged signatures of the HOA President.

The checks were deposited in Baldridge’s father’s bank account, then transferred to Baldridge’s personal account.

Penalties

NRED’s CIC Commission found Baldridge in violation of numerous Nevada statutes, noting 72 counts of fraudulent or dishonest activity, and breaching her fiduciary duty to Sky Vista HOA, where she served on the board.

The Commission suspended Baldridge’s license for 10 years. It also ordered her to pay full restitution to Eldorado Hills HOA and Stonefield II HOA. In addition, NRED imposed $180,000 in administrative fines and legal costs, characterized as a fine that was not severe enough by Lori Burger, Senior VP of EBMC.

Source:

NRED CIC Commission’s orders, Baldridge, March 2019

 

The CIC Commission also revoked the community manager license of Teresa Drakeley for 10 years. Drakeley failed to respond to embezzlement accusations, totaling over $75,000, from Sun City Summerlin HOA.

Sun City Summerlin Association’s controller and finance director investigated suspicious “lapping” activity occurring between 2013 and 2017. At the time, Drakeley was employed by First Service Residential. According to the NRED’s report:

NRED lapping fraudulent HOA activity
Source: NRED order for Teresa Drakeley (March 2019)

The Commission also ordered Drakeley to pay more than $22,000 in administrative fines and attorney’s fees, and to pay full restitution to Sun city Summerlin Community Association.

Source:

NRED CIC Commission’s Orders, Teresa Drakeley


Former HOA treasurer arrested following investigation of $55,000 theft (VA)

According to local police, Roberta D. “Bobbie” Fauber, 53, faces six counts of embezzlement, as much as $55,000, from the Conjurers Neck Homeowners Association.

Fauber, who turned herself into police, was the treasurer of the upscale community’s HOA at the time of the alleged thefts. Colonial Heights police started looking into suspicious activity in April, and say they are are still investigating.

The HOA isn’t talking to local media about the incidents.

Source:

Former Colonial Heights HOA treasurer charged with embezzlement
By Staff Report, The Progress-Index
Posted Jul 23, 2019 at 3:33 PMUpdated Jul 23, 2019 at 4:49 PM


HOA treasurer arrested for theft, bad checks (IN)

Joseph P. Girgenti, 60, former treasurer of Innisbrooke Homeowners Association, recently admitted to embezzling more than $20,000 from the HOA’s bank account, to pay for personal expenses.

A police investigation reveals that Girgenti wrote dozens of checks to himself, falsely claiming the money was to pay for maintenance work in the community. The HOA board knew something went wrong when vendors called the association, complaining that Girgenti had paid them with bad checks.

According to one report, when he was confronted by HOA board members, Girgenti repaid almost $14,000. However, he still owes at least $7,000. Police arrested Girgenti on 6 felony charges, and placed him in Johnson County Jail.

Source:

Police: Man took $20,000 from homeowners association
By Magen Kritsch – Daily Journal  7/16/19 5:15 PM


HOA Treasurer’s grandson betrays trust of condo association (PA)

Ryan A. Workman, 28, is charged with stealing $41,000 from Homewood Oaks Townhouse Association in suburban Loyalsock Twp. He’s on release after posting $25,000 bail.

Workman, who is also a clerk in the Lycoming County prothonotary’s office, has been placed on administrative leave from his job, pending the outcome of the case.

Workman lives with his grandparents and occasionally helped his grandmother, Barbara Folk, who is the official HOA treasurer. Somehow, Workman had access to the association’s safe deposit box, checkbook, and files.

He told police is was easy to take the money, and that he faked the books to conceal the theft.  Caught in the act, Workman now promises to pay back the money, if the HOA settles the matter out of court.

Workman took advantage of the trust of his grandmother and others in the community. Neighbors know Workman as a religious man, who once sang sacred music at the Vatican.

Note: An officer of the HOA board should never give access to money, books, and records to a non-board member. That’s a huge nonprofit and corporate error.

Source:

Pa. prothonotary clerk put on unpaid leave after charges of stealing from homeowners association
Posted Jul 2, 7:14 PM | Penn Live ♦