Arrest handcuff fraud theft

HOA, condo & co-op fraud and corruption roundup (Jan. 2020)

By Deborah Goonan, Independent American Communities

This month: Two former HOA managers – one of them a town official – accused of theft blame their gambling addictions; MS management company sued by a dozen HOA closes its doors for good;  license suspension for FirstService Residential DC; WA homeowners agree to special assessment to cover $400K embezzlement loss.

Florida

Condo manager arrested for gambling HOA money

Georgina Pineda, former manager of 2 condo associations in Sunny Isle Beach, has been arrested on grand theft charges in Miami-Dade County.

Eden Roc Condos and King David Condominium Associations both allege that Pineda pilfered hundreds of thousands of dollars from their accounts. Investigators have uncovered unauthorized use of an HOA debit card at Miccosukee casino in West Miami-Dade, as well as commingling of funds between the two condo associations.

According to the Miami Herald, Pineda has pled not guilty to charges involving Eden Roc Condominium. Pineda’s attorney says the former manager has a gambling problem, but declined to comment further.

Sources:

She looted South Florida condo association money to feed a casino gambling habit, cops say
BY DAVID OVALLE | Miami Herald
JANUARY 28, 2020 06:00 AM

Manager Stole Hundreds of Thousands From Sunny Isles Beach Condos: Cops
Georgina Pineda, 56, was arrested back in November on a first-degree grand theft charge, and was arrested again on Monday on a similar charge
Published January 28, 2020 • Updated on January 28, 2020 at 10:00 pm

 


Mississippi

A dozen HOAs sue Ridgway Lane amid ongoing embezzlement investigations

As the investigation against Ridgway Lane management company heats up, more condominium and homeowners associations are filing lawsuits alleging embezzlement, theft, or misappropriation of funds.

Ridgway is owned by David L. Lane (President) and his son, David W. Lane (VP).

The following twelve HOAs report a cumulative total of $2.1 million in missing funds, as noted:

Bridgewater Homeowners Association and Bridgewater II Owners Association, both in Ridgeland – $500,000 and $340,000, respectively

Barrington Condominium Association, Jackson – more than $100,000

Lakebend Homeowners Association, Brandon – unspecified

Dinsmore Property Owners, Ridgeland – $217,000

Bruenburg Property Owners Association – $188,330

Palisades Homeowners Association – $87,000

The Diplomat Condominium Association – more than $10,000

Oakhurst Homeowners Association – $168,000

Eastbrooke Condominium Association – $500,000

Timbers Homeowners Association – $90,000

Wrenfield Homeowners Association – $9,188

HOAs file reports with FBI

Several of the HOAs have filed federal criminal complaints against the Lanes and Ridgway Lane Management Company, but the FBI won’t confirm or deny whether it is conducting a formal investigation.

David L. Lane left the company last fall, shortly after the first lawsuit was filed, due to health reasons. His son, David W. Lane denies responsibility for the missing money, and claims he was unaware of his father’s alleged illegal activity.

The Lanes closed the Ridgway Lane business as of December 31, 2019. Both Lanes have reportedly also put their homes on the market.

Investigations continue.

Sources:

Ridgway Lane accused of embezzling over $2.1M from area homeowners associations: What we know now
Justin Vicory, Mississippi Clarion LedgerPublished 9:25 a.m. CT Nov. 14, 2019 | Updated 11:25 a.m. CT Jan. 8, 2020

FBI will not ‘confirm or deny’ investigation into Ridgway Lane dealings
By David Kenney | November 18, 2019 at 7:37 PM CST – Updated November 18 at 7:37 PM | RIDGELAND, Miss. (WLBT)

Son blames dad in ongoing Ridgway Lane embezzlement case
By David Kenney | January 9, 2020 at 8:37 PM CST – Updated January 9 at 8:41 PM
JACKSON, Miss. (WLBT)


Rhode Island

Realtor, elected official, under investigation for $50K theft from condo association she managed

A Woonsocket condominium association has filed a complaint against their former condo manager, who also serves as the elected vice chair of the Town of Dedham’s Board of Assessors.

River Island Condominium Association accuses Cheryl Dever Sullivan of stealing $50,000 from their bank account, allegedly spending some of the money at Plainridge Park Casino in Plainville.

The alleged thefts occurred last year, shortly after Sullivan was elected to Town Council in 2018. Plainville police are investigating the complaint, but no charges have been file.

According to one local news source, Sullivan’s experience includes 28 years in residential and commercial real estate sales, five years in the mortgage industry, and five years in business sales.

Special assessment required

Condo management recently informed unit owners that they’ll have to pay an additional $500 per unit assessment to cover basic expenses such as utility bills and insurance premiums. The new condo manager tells Boston 25 News that unfortunately, the Association’s insurance policy won’t cover the loss.

That $500 special assessment is a huge burden for some of the residents of River Island, particularly for the elderly and disabled.

Dedham Town Council is reportedly conducting its own internal investigation of the complaints filed against Sullivan.

Source:

Dedham elected official accused of stealing thousands in Rhode Island condo fees
By: Christine McCarthy | Boston 25 News
Updated: January 15, 2020 – 10:03 PM | DEDHAM, Mass.

 


Virginia

60-day license suspension for FirstService Residential DC Metro

Here’s one example of what can happen when no one from the HOA — including the board — is paying attention to finances and management activity in the HOA.

In 2018, Kathy R. Beauline, general manager of the Kingstowne Residential Owners Corporation, filed a complaint against its former management company, FirstService Residential DC Metro LLC.

FirstService’s management agreement was cancelled as of December 31, 2017. The company was obligated to provide a final accounting of records, and return all monies to the HOA within 60 days of termination.

Virginia Department of Professional and Occupational Regulation (DPOR) ordered FirstService to pay $3,750 in penalties on five violations related to improper handling of Kingstowne HOA’s money. DPOR also suspended FSR’s license for 60 days.

2019-00817_CO Firstservice Residential DC Metro LLC (Consent Order)

FirstService Residential DC Metro LLC violations

Instead of following the correct legal procedure for winding up its business arrangement with Kingstowne within 60 days, FirstService transferred $20,000 of the Association’s money from its Union Bank account into a separate escrow account, under the sole control of FirstService.

According to FirstService’s own legal counsel, Alan R. Trachtenberg, the management company had no reason to set up an escrow account, because there was no outstanding financial dispute between Kingstowne and FirstService.

And, even if there were a dispute, Virginia state law requires any escrow account to be under the joint control of the HOA and management company.

Nevertheless, FirstService held on to the HOA’s money, waiting nearly 6 months to return $18,687 in escrow. FirstService also withheld $312 in excess of the $1,000 maximum allowance for transitional costs billable to Kingstowne.

Additionally, FirstService waited until April 6, 2018 to wire more than $300,000 of the HOA’s money to its new bank account.

Incredibly, the DPOR investigator also noted that FirstService waited until May 2018, to forward $6,500 in payments it received in the last two months of its 2017 contract with Kingstowne. (See screenshot.)

FirstService DC consent order screen shot

 


Washington

HOA on the road to solvency, still conducting forensic audits

Here’s the latest update on Clearwood Community Association‘s financial crisis.

The HOA’s former bookkeeper, Dolanna K. Burnett, is accused of stealing up to $400,000 from the association over a number of years. The HOA has spent more than $200,000 on a forensic audit to gather evidence of the alleged theft.

Due to the loss from embezzlement and several years of deferred assessment increases, members face a steep 26% fee increase for 2020. In December’s special election, owners reportedly voted 159-46 to ratify the budget increase, and to allocate some money from reserves to cover deferred maintenance.

After the new budget  was ratified, HOA board President Aaron Lang announced his resignation, ending 18 months of service to the community. 

Source:

Clearwood President Resigns as HOA Lands on Steadier Financial Footing Through Special Election
By Eric Rosane / erosane@yelmonline.com Yelm Online
Dec 27, 2019

 

Comments, corrections, or article suggestions? Email me at debgoonan@icloud.com. Feel free to share any IAC post on Facebook, Twitter ( @goonan_deborah ), LinkedIn, or Pinterest.