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

By Deborah Goonan, Independent American Communities



This month: Prosecutors go after HOA/condo management companies, developers, and a mortgage broker; homeowners sue to get their money back; HOA board members try to cover up fraud and embezzlement.



Developer, mortgage broker enter guilty pleas in condo conversion sales scam

Jonathan Marmol, 41, of Odessa, a former mortgage broker, recently pleaded guilty to originating $5 million in fraudulent loans for condo units sold at the Preserve of Temple Terrace.

The condo conversion project began in 2006, and was developed by Mordechai Boaziz, 68, of Fort Lauderdale. Boaziz and Marmol reportedly conspired, with others, to misrepresent the quality of borrowers purchasing units at the Preserve.

Lenders such as Wells Fargo and Wachovia Mortgage Bank lost millions when those bad loans failed in the Great Recession. Sentencing is scheduled for February 2020.


Hillsborough man pleads guilty in $5 million condo conversion scam
Jonathan Marmol, 41, of Odessa, faces up to 5 years in federal prison for conspiring to make false statements to banks that lost $5 million on sketchy loans.
By Richard Danielson | Tampa Bay Times
Published Nov. 26. | Updated Nov. 26



Former manager of at least three different North Florida HOAs arrested, after HOAs present evidence of financial discrepancies

James Long, president of J&L Management of North Florida is out on bail, charged with grand theft from several HOAs.

Since 2015, at least three different community associations — Cambridge Estates HOA, Campus North HOA, and Big Tree Lakes Property Owners Association — have filed complaints against J&L.

HOA board members of all three communities say that HOA bank reconciliation reports provided by Long don’t match transactions documented on official statements provided by their banks.

According to its website, J&L managers provide

“bank account reconciliation and balancing.”

J&L Management about us website
(Screen Capture Dec. 27, 2019)

Former HOA board members file complaints

Concerned about J&L’s conduct, Cambridge Estates HOA filed a complaint with Florida’s Department of Business and Professional Regulation (DBPR) in 2015. But, to his surprise, the agency failed to take action against Long. So J&L Management continued to do business with other HOAs in Florida.

In fact, public records reveal that J&L currently manages at least a dozen different HOAs in North Florida.

Earlier this year, when an astute board member noticed that bank statements didn’t match Long’s reports, the board of Big Tree Lakes POA took a different route. Instead of filing a complaint with DBPR, the POA contacted the state attorney to investigate financial discrepancies.

Shortly thereafter, the state attorney arrested Long on charges of grand theft, and reportedly wants to hear from other HOAs who may have experienced similar problems with Long or J&L Management.

A caution to all HOAs:

It’s never a good idea to allow a management agent to reconcile bank statements with the association’s account. Board members should instruct their bank to supply them with original monthly statements, so they can personally review financial records, and, at a minimum, compare the actual balance to the ledger balance.


Jacksonville HOA manager arrested on charges of grand theft
The president of J&L Management of North Florida was arrested on grand theft charges.
Author: Ken Amaro | First Coast News
Published: 10:19 PM EST December 2, 2019
Updated: 10:19 PM EST December 2, 2019


Former condo treasurer enters guilty plea in exchange for reduced restitution settlement

This month, a Superior Court judge sentenced Jeanne Elizabeth Grover, 48, to one year of probation, following her arrest on embezzlement charges. The former treasurer of Stillwater Condominium Association entered settled on a plea deal and repaid $12,344 to the condo association.

According to the Daily Hampshire Gazette, Stillwater’s condo board was alerted to possible theft of more than $18,000 by their bank’s fraud detection officer. The condo association then contacted Deerfield Police, who investigated the crime and arrested Grover in 2017.

Grover and the condo association disputed the dollar amount of unauthorized transfers from Stillwater’s bank account, and settled on $12,344 as a “compromise.”

Earlier this year, Grover also pleaded guilty to embezzlement charges filed by a local church, where she was once employed as an administrative assistant.


Woman charged with embezzlement settles with Deerfield condo association
By DOMENIC POLI, Staff Writer, Daily Hampshire Gazette
Published: 12/20/2019 10:59:04 AM


More lawsuits filed against Ridgway Lane management company

This is a follow up to last month’s report of alleged fraud committed by a prominent management company in Mississippi.

At least nine different HOAs allege thousands of dollars in missing funds from their accounts, all while under the management of Ridgway Lane. Combined losses reportedly top $1.6 million — and counting.

The company’s website is no longer active, and, according to local reports, two of Ridgway Lane’s owners have put their homes up for sale.


Missing funds now surpass $1.6M: Ninth HOA comes forward with suit against Ridgway Lane
Justin Vicory, Mississippi Clarion Ledger | Published 1:04 p.m. CT Nov. 29, 201

New York

City, State distribute $2.9 million settlement in Brooklyn housing employee wage theft case

State Attorney General Letitia James and the city Comptroller Scott Stringer recently distributed backpay to 11 union employees, part of a $2.9 million settlement with owners of Brooklyn Warehouse 180 and Mica Gabe Brooklyn LLC.

James says the developers of both ritzy condominium associations accepted tax breaks in exchange for an agreement to pay doormen, porters, and a superintendent prevailing wages of $17 tp $24 per hour.

But a joint investigation conducted by the state and city revealed that, between 2014 and 2016, the workers were “short-changed” with wages ranging from $12 to $17.50.

32BJ SEIU blew the whistle on the developer/landlords, and will receive $450,000 from the settlement, with another $2 million payable to the city and state as reimbursement for “lost tax revenue” from the underpaid workers.

James says that the $2.9 million legal settlement should discourage other taxpayer-funded developers and landlords from engaging in wage theft.


Posted on December 17, 2019 By Kevin Duggan, Brooklyn Paper


Condo owners claims board, contractor conspired to pay false, padded invoices

Stoney Creek Condo association is in a state of chaotic conflict, as several homeowners have filed a civil lawsuit and criminal charges against several board members and an independent contractor.

According to allegations in the lawsuit, board treasurer Ralph Bawtenheimer, his wife Melissa Mallin and contractor James A. Thomas conspired to bilk the condo association out of hundreds of thousands of dollars.

Criminal investigators with West Chester Police are looking into legal claims that board members Bawtenheimer, Dorothy Hull, Thomas Gilchrist, and Damen Hicks approved payment of padded invoices submitted by Thomas, for deck repairs that were never completed.

The civil lawsuit seeks restitution for $380,000. And, in their criminal complaint the current condo board claims $500,000 is missing from the association’s account.

Defendants in both cases claim they are innocent, and that the Plaintiffs won’t find any hard evidence of wrongdoing. However, the Prosecutor in the case reports difficulty obtaining financial records in the investigation.

The investigation is ongoing.


West Chester condo owners claim scheme led to $380K-plus loss
Dec 18, 2019
By Denise G. Callahan, Staff Writer, Journal-News


Homeowner sues owner of management company for collecting HOA fees as a “ghost” HOA

Public records show that the Innwood Forest HOA became inactive when it was “involuntarily dissolved” in 2007.

The HOA apparently failed to file its corporate registration.

But, because the subdivision’s HOA was never officially dissolved, Ronald Cochran, owner of Tejas Capital Management Company, swooped in to fill the void.

And for more than a decade, Tejas Capital Management Company has collected fees for a defunct HOA at Innwood Forest.

However, in recent months, residents have objected to the lack of services they’ve received in return for their money.

In fact, homeowners say their community pool has been dry for at least ten years. Likewise, no one has bothered to maintain the common areas or enforced the covenants or rules.

Going public

Finally fed up, earlier this year, homeowners decided to go public with their complaints against their “ghost” HOA.

One homeowner, Delores Lane, even filed a lawsuit against Ronald Cochran, seeking repayment of $2,800 in HOA fees she has paid over the years to a “non-existent” HOA. 

When asked why she’s suing, Lane says she expects to get services in return for her money.

That’s not surprising. Who doesn’t want their money’s worth?

What’s really puzzling is why homeowners waited so many years to take action.

Lawsuit dismissed on technicality

Unfortunately, the judge dismissed Lane’s case, pointing out that the homeowner must file suit against the corporation — Tejas Capital Management Company  — rather than its owner, Cochran.

(The judge explained that Lane paid the management company, not Cochran himself.)

Lane says she plans to refile her lawsuit. Cochran’s attorneys will undoubtedly look for other reasons to dismiss.

In general, homeowners at Innwood Forest face two daunting challenges.

Obviously, it will be difficult to hold Cochran and his management company accountable. Apparently, the owner of Tejas Capital is in very poor health. Litigation, if allowed to continue, could drag on for years. Under the circumstances, Lane and fellow homeowners may never obtain a favorable resolution from Cochran’s management business.

And, ultimately, homeowners will need to decide whether it’s actually worth trying to revive their dysfunctional, grossly mismanaged HOA. ♦


KHOU 11 Investigates: Homeowners confront manager of non-existent HOA
In April, KHOU 11 Investigates uncovered hundreds of people were paying an elusive man who collected dues for an HOA that did not exist.
Author: Cheryl Mercedes (KHOU)
Published: 6:25 PM CST December 12, 2019
Updated: 10:20 PM CST December 12, 2019 HOUSTON

See also, related IAC post:


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