Another Million $$$ Embezzlement Hits A Homeowners Association

Why hasn’t Hollywood jumped on the uncontrollable embezzling that happens in Homeowners Associations across America? Some astute member of the Writers’ Guild could come up with a great screenplay. The reason it hasn’t been done is that the plot would just be too unbelievable.

If you know a good writer, tell him to look at the current story in the Bear Reserve Homeowners Association in Eustis, Florida. The cops have just busted a couple of developers who became board members on this HOA. The pair are accused of embezzling 1.5 million dollars and moving it to shell corporations. How the heck didn’t homeowners discover many years ago that they were being ripped off?

Always remember that embezzled money is rarely returned, which meansĀ a special assessment against all HOA property owners. That’s part of what makes HOA embezzling such a horrific crime.

If your board refuses to give you an accounting of all HOA funds spent, if you get delayed, harassed or ignored for making such a request, then you, my dear friend, may rightly assume that your HOA money is being embezzled. Just assume it! It’s going on everywhere.

(link to WESH-TV story)

 

 

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About

Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

6 thoughts on “Another Million $$$ Embezzlement Hits A Homeowners Association

  1. Nila Ridings

    In Quivira Falls where I live, I requested the financial records before purchase and was told only owners could see them because it was proprietary information for members only. After making the horrible mistake of buying, I still couldn’t get the records because they were at the “accountants” office being prepared for the annual audit. (Required by the by-laws)Months pass…no audit and no records. I filed a lawsuit to see the records. The president who held the position for 26 years claimed all the bills were paid and $200K was in the bank. Investigation turns up he just bought two places in Carlsbad, CA and he’s running for the board there. He already owns 3 in Quivira Falls…2 are rental units. Another homeowner filed a pro-se case for the records. Mr. 26 year president suddenly dies. No audits had been done for 7 years. $10 MILLION unaccounted for. New president refuses to have the board attorney file an injunction to stop the estate from settling. Judge orders her (new pres.) to turn the records over to me. She claims no records and the VP claims no bank accounts. I got the DA and a detective involved. Thousands of dollars in cash found on ledgers but never deposited into any of the multiple bank accounts. A year later she is caught with another board member and a former board member shredding records. Since that time it’s been uncovered that she was self-dealing decorating jobs on the clubhouse through her “decorating business” (no records of that either) and her publishing business that sells advertising for the HOA newsletter. More self-dealing and no record of her owning a publishing business either.

    Warning: If you ask to see financial records and there is any hesitation or refusal to turn them over, head straight to the police and file an embezzlement report. Let the HOA get hit by surprise from a detective. If I could do over again, that is exactly what I would do. I would not have filed a lawsuit to see the records and spent $10K on a lawsuit when the only thing that happened was a board president under oath lying to the judge. Yes, she can be taken back to court on perjury charges. I’m still in the decision-making stages.

    The TEN MILLION DOLLARS will never be seen again! Term limits should apply to all HOA board members. And no one board member should have access to the bank accounts and be able to sign checks. Our board allowed the property manager to have access to the bank accounts which I think is another really stupid idea. If a person does not want to perform the duties of a board member, do not warm a board member’s seat!

    Reply
  2. Sandy Schenkat

    Nila has really experienced horrible HOA government. I think HOA meetings would be good fodder for a Reality TV show. If some production company would go around the country and video HOA meetings the USA’s HOAs might start to realize what types of people volunteer for these positions as board members. Maybe some of the apathy would go away and good people would want to get involved in their HOA government. There might be fewer bullies and less embezzlement continuing.

    Reply
    1. Ward Lucas Post author

      Sandy, you’re exactly right. In my book, Neighbors At War, I proposed mandatory videotaping of all HOA board meetings and posting all video on the Internet. Shine the light of day on these yahoos and the cockroaches will scatter.

      Reply
  3. Deborah Goonan

    The most outrageous part of the WESH news report – many charges cannot be prosecuted because the statute of limitations has expired?!?!

    Reply
  4. pi4911

    Haven’t had the time to look at the details, but I would not give up based on the statute of limitations. In many states, the SoL does not start to run in fraud cases until the fraud is discovered. Sometimes there is also a requirement that the fraud was ongoing, and that a “reasonable person” would not have discovered the fraud sooner.

    It sounds like there was poor control on monies, so any professionals — attorneys, accountants, CID managers who missed the fraud, or did not recommend improvement to controls might also have liability. And each should have their own insurance company (or should).

    Reply
  5. Nila Ridings

    Sandy,

    Sadly you have not heard even 1/100th of the HOA nightmare I have lived. Since I’ve been studying about HOAs and working actively to try and learn and educate my neighbors about my own HOA, I’ve come to realize Quivira Falls in Overland Park, Kansas is one of the worst HOAs in the entire country! As you know, I’ve heard countless HOA stories. Some are just starting down the path I’ve been walking for the past 8 years and 8 months and a few others have advanced to the level I predict Quivira Falls will reach in the end.

    Much like the corporate world talks about the “culture” of a business,HOAs are the same way. I’ve learned once the HOA have passed to the dark side and the “culture” is controlled by those in the depths of the evil and power-hungry board members two things happen: Those who are intelligent enough to recognize there is a very nasty “smell” to the HOA, sell and get out. The others get scared and run for cover and hide while pretending this sick behavior will go away and the HOA will “fix” itself. It doesn’t. It only gets worse. And then some soul with a conscience and common sense steps up to try and identify who, what, when, where, how, and why the HOA became a train wreck that flew down the tracks at 300mph and crashed into an abyss. That person becomes the target of the board who does everything possible to convince the homeowners that person(s) are nothing but trouble makers, liars, stupid, etc. etc. etc. Every ugly thing they can think up they spread like it’s some gospel truth.

    I have not studied religious cults like I have HOAs, but what I do know is there is a very strong similarity. Those who drink the poisoned “cool-aid” get special attention from the board and property managers. Those who shake their heads “no” to the poisoned monthly cup of HOA brew are going to be tortured as much as humanly possible, even if it means beating the out-spoken homeowner with a crowbar!

    Dr. Gary Solomon certainly has done his best to educate us on this sickness. I’ve lived what he has presented and I know it to be 100% the truth. When a human being has the propensity towards being hateful and evil, I’ve found they are most comfortable serving on an HOA board.

    Reply

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