Really! Ask any promoter of the HOA system about the national epidemic of board members and property managers embezzling from the neighborhood budget, and they’ll swear that it’s rare…so rare, the average homeowner needn’t worry about such a thing.
It’s true that prosecution of HOA embezzlers is rare. Prosecutors know it’s expensive to charge HOA embezzlers. They know that embezzlers get incredibly light sentences from judges. Steal a million bucks and get 18 months in prison? Hey, such a deal! So, prosecutors’ attitudes toward victims is, “Well, if you don’t like it, why don’t you just move?” Where’ve we heard that before?
But with every embezzlement story, property values in HOAs across the country go down. Maybe just a little bit, but how can property values go up when there are so many HOA embezzling and racketeering stories?
Here’s another:
(link to money-laundering in Jersey City)
Folks, if you think this country isn’t in bad, bad trouble, you’ve got your head someplace it really doesn’t belong.
Unlicensed, unregulated, unaccountable…where else can you get your name placed on bank accounts (millions of dollars) without anything except that you call yourself a ‘professional’ property manager.
It happens all the time. We usually just hear about the big ones, the millions or hundreds of thousands of dollars in HOA thefts. What we don’t hear about is the small-time embezzlers.
When I took over my HOA here in Mesa, Arizona I found some very interesting ‘reimbursements.’ Things like turkey roasters, peanut oil and hundreds of dollars worth the laundry soap etc.
I’m just going to assume here, but I would imagine that millions of dollars worth of homeowners’ money is funneled away each year by these petty crooks. These types of thefts are common in almost every business and non profit in the country, especially HOA’s.
The solution here is mandatory yearly audits, that are performed by certified public accountants. It’s the law here in Arizona. Unfortunately, although audits are required law, there are absolutely no consequences for not doing one.
We can take the recent case of an HOA in Scottsdale, Arizona. This HOA fell victim to a three million dollar embezzlement. No audits were ever performed and the law requiring them has zero consequences.
I could actually care less if property managers and management companies are licensed. This would do nothing but give homeowners a false sense of security. What needs to be done is yearly audits, the ones that I demand in my own HOA. The audits that homeowners receive each year outlining possible discrepancies in spending is the best way to prevent theft.
There need to be huge consequences for the failure of an HOA to perform a yearly audit and send a copy to each homeowner in the village. Each HOA manager and management company also needs to have a bond that exceeds three times the amount of the Association’s yearly income.
The CAI’s misinformation that thefts are rare is mind numbing. For every HOA crook who actually gets caught, there are hundreds more that don’t. We need to prevent the thefts from homeowners, and catch the ones with their hands in the cookie-jar. Giving them a license to steal isn’t the answer. Doing yearly audits by trained professionals is a great start.
I don’t know where some of this propaganda comes from, but here is just one recent example on the truth and the ease of the abuses and thefts of finances in HOAs and COAs, etc.!
From South Carolina
Lack of regulation makes condo regimes easy targets for fraud
By DAN BURLEY
dburley@islandpacket.comMarch 27, 2015 Updated 22 hours ago
Read more here: http://www.islandpacket.com/2015/03/27/3667868_lack-of-regulation-makes-condo.html?rh=1#storylink=cpy
Excerpt:
“A swarm of FBI agents.
Computers, hard drives and financial records seized.
Reports of missing money.
The scene last month at Property Administrators Inc. — a management company that oversaw day-to-day operations and finances for condominium regimes — seemed out of place on Hilton Head Island.
But the Shelter Cove company’s abrupt closure, which left scores of condo owners racing to account for hundreds of thousands of dollars, is not that unusual.
Property Administrators is the third such company in the past decade to be accused of stealing at least $100,000, according to court records and interviews with Centre Court condo owners, who allege Property Administrators took money.
And some business officials say those are only the publicly reported cases.
Other management firms have misused condominium and homeowners’ associations money but quietly returned the money after embarrassed board members found out.
“Boards want to keep it private,” said Hilton Head accountant Greg Bennett. “A lot of times they don’t pursue it legally, so there’s no proof it ever existed.”
The issue boils down to a lack of local and state oversight, industry experts say.”
Read more here: http://www.islandpacket.com/2015/03/27/3667868_lack-of-regulation-makes-condo.html?rh=1#storylink=cpy
And, here is more, if you can take it! Is $1.2 million enough? Please see the link below for all the articles in this series must see series!
South Carolina
“Property Administrators closure: Where’s the money?”
By DAN BURLEY AND ZACH MURDOCK
dburley@islandpacket.com and zmurdock@islandpacket.com
March 27, 2014
Read more here: http://www.islandpacket.com/2014/03/27/3669849/property-administrators-closure.html?rh=1#storylink=cpy
“The unexpected closure of a longtime property management company has thrown nearly two dozen Hilton Head Island regimes into confusion. Here’s a deeper look at this industry on the island, and some warnings signs associations should know.”
“A brewing scandal”
“Where’s the money?”
“At least $1.2 million is missing from three former PAI clients | READ”
And,
“Warning signs”
“Who’s vulnerable?”
“Lack of regulation makes condo regimes easy targets for nasty surprises | READ”
Read more here: http://www.islandpacket.com/2014/03/27/3669849/property-administrators-closure.html?rh=1#storylink=cpy
Read more here: http://www.islandpacket.com/2014/03/27/3669849/property-administrators-closure.html?rh=1#storylink=cpy
Written by Dan Burley and Zach Murdock
This storyline is demonstrated perfectly by the HOA incorporated as the Pennsylvania Chautauqua.
All efforts to remedy the misconduct have been unsuccessful.
But that doesn’t mean we won’t stop trying…
see the blog for the details (to keep this post short).
mountgretna.blogspot.com
Think about it. News media does not report EVERY crime in your town, right? But no one concludes that the reported crimes are the only ones that have ever been committed, and therefore the incidence is “rare.”
Fed Upaton,
I took a look at your blog, mountgretna.blogspot.com and just FYI there is an ever growing HOA advocacy group in PA. If you will go to Facebook, see: HOA Reform – Stop the abuse now, or HOA – Article and Link Clearing House, or Pennsylvania Civil Rights Law Network, or hiddenvalleyhiddentruths.webs.com. I hope you know about the tremendous HOA homeowner experts, authors, health professionals, homeowner attorneys and others who are and have been fighting and trying to expose the HOA abuses and criminality, some for decades. I try, as well, to keep as many resources and articles up as I can and my FB page is Facebook.com/cynthiastphns.