35 condo, homeowner associations sue Florida management company, alleging embezzlement and fraud

By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com

The Naples law firm of Hamilton Mikes is suing on behalf of 34 community associations in South Florida. The lawsuit names American Property Management Services (APMS) and Wells Fargo as defendants. Plaintiffs allege that the owner of APMS, Orlando Miserandino Ortiz, opened multiple HOA bank accounts, as the sole signor on those accounts.

The Association board members say that APMS and Wells Fargo Bank have been resistant to providing access to bank records. The lawsuit states that HOA board members signed bank cards presented to them by their HOA manager, but that Ortiz never delivered these signature cards to the bank.

At the time the lawsuit was filed (Jan. 2022), Hamilton Mikes was still unable to secure all necessary bank statements. Preliminary investigations revealed that a $2 million from insurance settlement was missing from several HOA accounts. Hamilton Mikes expected to document additional evidence of embezzlement and fraud, to exceed ‘tens of millions of dollars,’ according to one report.

By March of 2022, upon further investigation, Plaintiff HOAs discovered that 23 of 90 bank accounts under investigation had been closed by Ortiz. The remaining 67 accounts had little to no money left.

This investigation is ongoing and the lawsuit remains pending.

Sources:

Lawsuit accuses area property management company of embezzlement by: Louis Llovio Commercial Real Estate Editor

Defrauded HOAs See Bank Accounts – 23 Were Closed By Michael Braun (Florida Realtors.org, March 23, 2022)

Lessons learned

Some important lessons for HOA members:

  • As a general member of the HOA, it’s your right and your business to know the name and address of the bank where your HOA funds are held.
  • Make sure your HOA has at least two current board members signatures on file at any financial institution that holds HOA deposits. It’s your money, but board members are human. Don’t merely assume your HOA board is fully aware of, and performing, its fiduciary duties.
  • If you’re an HOA Board member, you must personally visit the bank and sign the cards in the presence of bank employees.
  • If you’re on the HOA board, don’t allow your management agent to handle deposits and pay invoices without closely supervising transactions and regularly reconciling bank statements with the Association’s financial ledger.
  • Never allow your manager to commingle your HOA’s deposits in a bank account with funds from other HOAs.
  • In order to reconcile your HOA accounts, insist on seeing each and every actual bank statement provided by the financial institution. Don’t rely on the manager’s monthly budget report, which could contain inaccurate or intentionally falsified numbers.
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