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

By Deborah Goonan, Independent American Communities

This month: several property managers and HOA treasurers accused of embezzlement; defendant says alcoholism played a role in his HOA thefts; sentencing of former Colorado and Virginia HOA managers and an Iowa board treasurer; owners in a Washington HOA to pay higher fees as a result of embezzlement.


Former HOA Administrator gets maximum 7 years in prison for violation of public trust

Earlier this month, Chief Judge Mark Thompson, Summit County Justice Center, sentenced Polich to seven years in prison, and also ordered him to pay $253,450 in restitution.

As noted in September, Robert Polich, former administrator of Hamilton Creek Homes Association, pleaded guilty to theft and embezzlement totaling $558,000.

Polich admits that, for fourteen years, he deposited unauthorized checks from the HOA’s bank account into the business account of his bookkeeping company.

The planned community is part of the Hamilton Creek Metropolitan District of Silverthorne.

A criminal investigation was opened in 2014, when the Hamilton Creek HOA treasurer noticed a suspicious deposit made by Polich, shortly after his arrest for embezzling more than $150,000 from the Enclave Homeowners Association in Keystone.

Polich served 90 days in jail and 4 years of probation following his conviction for the Enclave thefts, and pleaded guilty to charges of theft and embezzlement of public property in Hamilton Creek.

In his decision to sentence Polich to 7 years in prison, Judge Thompson noted the former administrator’s prior criminal history, and his violation of public trust.

Polich sentenced to 7 years in prison in embezzlement case
News | November 6, 2019
Sawyer D’Argonne


Former property manager arrested, charged with stealing $82K from HOA

Palm Beach County Sheriff’s Office is set to arraign a former property manager for the 80-unit Knightsbridge of Polo Club Homeowner’s Association.

Investigators say Korinne Modica allegedly transferred more than $30,000 directly to the account of Trex Management of Boca Raton. Trex is owned by Kenneth Modica, Korinne’s father. The remainder of the money was first transferred to the account of two other condo associations she managed, and then transferred to the Trex account.

According to the investigation, Kenneth was not directly involved in unauthorized money transfers.

The fraudulent activity occurred over a 6-month period between 2017 and 2018. A board member was alerted to the problem, when he could not obtain documents related to the a suspicious withdrawal.


Woman charged with defrauding Boca HOA of $82,000

By Mike Diamond Special to The Post Posted Nov 13, 2019 at 12:52 PM
PBSO says Korinne Modica, 34, funneled tens of thousands from the HOA’s account and used the money for shopping, dining, travel and other personal spending.


HOA Treasurer admits wire fraud, gets 18 months in jail

Following his guilty plea to wire fraud charges, U.S. District Court in Cedar Rapids has sentenced Wayne Jones Jr. to 18 months in prison.

Jones pleaded guilty to theft of approximately $125,00 from the Pheasant Ridge Homeowners Association, Marion, between 2011 and 2016.

When he served as the association’s treasurer, Jones admits to moving HOA funds to his personal bank accounts, and says he created fake financial records to cover up his crime.


Corridor man heading to prison for defrauding homeowners association
by Associated Press | Monday, November 4th 2019


Multiple HOAs accuse management company of fraud, embezzlement of $1M

So far, according to the Mississippi Clarion Ledger, seven homeowner associations have filed lawsuits against David L. Lane and his son, David W. Lane, Ridgway Lane & Associates, alleging combined losses of $1 million:

Bridgewater Homeowners Association in Ridgeland; Bridgewater II Owners Association in Ridgeland; Barrington Condominium Association in Jackson; Lakebend Homeowners Association in Brandon; Dinsmore Property Owners in Ridgeland; Bruenburg Property Owners Association; Palisades Homeowners Association.

Attorneys for the HOA boards say the Lanes have failed to produce requested financial records.

The Clarion Ledger also reports that, despite a temporary restraining order to freeze their assets, David Lane, Jr. transferred title of his home to his wife. And both Lanes, father and son, have also listed their homes for sale.


Homeowners association in Ridgeland subdivision suing property managers over possible fraud
By David Kenney (WLBT) | November 11, 2019 at 7:50 PM CST – Updated November 11 at 7:50 PM | RIDGELAND, Miss.

Another HOA files suit against Ridgway over missing money
By Jacob Gallant (WLBT)| November 15, 2019 at 5:02 PM CST – Updated November 15 at 6:03 PM

Ridgway Lane accused of embezzling over $1M from area homeowners associations: What we know now
Justin Vicory, Mississippi Clarion Ledger |Published 9:25 a.m. CT Nov. 14, 2019 | Updated 6:19 p.m. CT Nov. 22, 2019

Ridgway Lane father, son put homes up for sale amid HOA embezzlement investigations
Justin Vicory, Mississippi Clarion Ledger
Published 3:00 a.m. CT Nov. 23, 2019

North Dakota

Financial manager says stress, alcohol abuse led to betrayal of condo association

Samuel Edwin Mcquade, of Bismarck, was sentenced to two years of supervised probation for theft of more than $17,000 from the Kings View Condominium Association in Grand Forks.

Mcquade was formerly employed as CFO of New York City-based M8 Financial Services LLC. District Court Judge Don Hager chose not to send Mcquade to prison, since he has no prior criminal history, an has already repaid $80,000 to Kings View.

The former financial manager showed remorse for his behavior, blaming his poor decision to steal from King View HOA on his personal battle with alcoholism. Hager also ordered McQuade to be evaluated for chemical dependency.


Alcoholism cited as enabling factor in money stolen by former condo treasurer in Grand Forks
Written By: Hannah Shirley | Grand Forks Herald | Nov 15th 2019 – 2pm.


Former finance manager gets 6 years in prison for $457,000 embezzlement from Lake of the Woods Association

An Orange County Circuit Court recently sentenced Roy C. Mayberry, 46, of Stafford County in connection with theft of $457,000 from the Lake of the Woods Association.

Mayberry reportedly transferred money from the HOA’s accounts to his own bank account over the course of 4 years, while he served as finance manager for LOW. The fraud went undetected through three audits, but was discovered in a fourth audit last year.

Judge Dale Durrer sentenced Mayberry to six years in prison, despite his past history of embezzlement from another business, prior to working for LOW.

Although he could have faced 25 years in jail, the judge vacated 19 years, noting that Mayberry has already repaid $87,000 to the HOA. The remainder of the stolen money was paid by LOW Association’s insurance company.


Former finance manager gets six years in prison for stealing $457,000 from Lake of the Woods
Nov 19, 2019


Board asks owners to approve $215 annual dues increase to cover budget deficit due to missing money

As noted in last month’s Corruption and Fraud Roundup, the Clearwood Homeowners Association faces an increase HOA fees to cover a deficit in its budget, that was caused, in part, by embezzlement.

The HOA says it must transfer $200,000 from its reserve account to meet its 2020 annual budget obligations. HOA officials claim they cannot afford to wait for final resolution of a lawsuit filed by Clearwood against Dolanna K. Burnett, her husband and their businesses, accusing the defendants of using $300,000 – $400,000 for their own benefit.

Next month (Dec. 14), owners will vote whether or not to approve a $2 per month assessment increase to repay $200,000, plus 5.5% interest, to the community’s reserve account.

according the HOA’s General Manager, Mitch Waterman, the special election ballot also asks owners to approve an additional $191 annual fee increase, to make up for make up for “underpayments” to reserves.

Will homeowners be willing to pay higher reserve fees, after their former bookkeeper embezzled hundreds of thousands of dollars?


Clearwood Homeowners Association Will Ask Members to Repay for Embezzlement Losses, Transfer Capital Reserves
By Eric Rosane / erosane@yelmonline.com
Nov 16, 2019 ♦

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