Tag Archives: Federal investigators

HOA Embezzlement & Fraud

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I love the FBI. I love the many federal agents I have known. But my pet peeve is that the FBI, which keeps track of annual crime statistics, does not keep track of the number of Homeowners Associations which have been hit by an embezzlement by board members or property managers. Thus, it’s my belief that embezzlement from HOAs is the largest unreported crime in America. Nobody keeps track!

A couple of years ago a multi-million dollar embezzlement impacted a number of HOAs in Denver. Just about every major city has suffered some kind of massive HOA theft. Good grief, Las Vegas lost more than 60 million dollars when a ring of HOA swindlers decided that HOAs were too stupid and weak to stop embezzling. Some of the crooks were among the highest and finest of society. The FBI is credited with sending 43 HOA officials, lawyers, cops and property managers to prison. But I fault the feds for not going further. This same kind of corruption infests HOAs across the country. The corruption is being fed by massive legal fees going from homeowners into the pockets of complicit attorneys. And Legislatures across America know exactly what’s going on, but they refuse to reign in the corruption. It’s all about the money. Never, ever think that money doesn’t play a huge part in keeping a corrupt system alive.

It’s all about the money.

(link to article on how HOAs can protect themselves against fraud and embezzlement)

 

A Fiscal Tidal Wave Coming To America?

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For several years I’ve warned readers of this website that this country is facing a massive fiscal crisis because of too many years of profligate spending. It’s not just the U.S. government, either. It’s China, Russia, Japan, Greece, Brazil, Portugal, Ireland and many others. Because these countries don’t back up their currencies with cold, hard assets, the value of these fiat currencies is whatever the respective government says it is. If a government overspends, then it just devalues its currency and uses inflation to lessen the pressure of its federal debt.

That’s a ponzi scheme, and ever since Charles Ponzi’s stamp selling scam in Boston in the 1920s, the world has known that even legitimate businesses (or governments) that continually spend more than they take in…eventually collapse.

On this website I’ve occasionally warned you that a fiscal calamity could ripple across the nation’s Homeowners Associations and because of a history of mismanagement by HOA bullies, mortgage companies will be increasingly reluctant to lend money where neighborhood associations are mired in a pattern of litigation. If a home buyer can’t get a mortgage to buy your house, what is your house really worth? Did the HOA really fulfill its promise to protect your property values?

Now, going one step further, pay very close attention to news events of this next week. A fiscal disaster that could profoundly affect the U.S. housing market could happen as early as next weekend. Oil prices across the world have collapsed to under thirty dollars a barrel. Some on Wall Street say the price could eventually go as low as sixteen dollars a barrel.

Saudi Arabia, one of America’s staunchest allies, is panicking. Oil sales amount to 75% of that country’s income. For years, the Saudis have pegged the value of the riyal to the U.S. Dollar. If they pull that peg and the riyal is devalued against the dollar, then Katy bar the doors. There’s no one who can predict how this will impact the world economy.

Massive inflation might help the individual who holds a large fixed interest mortgage. For many decades homeowners have been able to inflate their mortgages away. But a frightened financial industry doesn’t like to offer reasonably priced mortgages in risky neighborhoods.

I’m not an economist so I’m open to criticism. But these are interesting times, aren’t they?

HOA Trouble In Colorado

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guest blog by Stan Hrincevich   (coloradohoaforum.com)

Colorado Springs Town Hall Meeting: let us know how you can help get the word out about this meeting on Feb 13: contact legislators, post flyer at your HOA, local media, etc.

Construction Defects Legislation: here we go again with the Denver Post exclusively contacting the Community Associations Institute (CAI) to represent homeowners’ interests in how homeowners’ money is used in litigation. Below is our letter to the editor of the Denver Post and copied to legislators:

“The Denver Post again allows those making millions of dollars from HOA Construction Defects (CD) litigation to represent the voice and rights of homeowners and distort the debate in CD legislation reform. No input is accepted from any recognized homeowner’s organizations. Once again, the only point person on homeowner’s rights is none other than the Community Associations Institute (CAI). The CAI represents the interests of property managers and HOA lawyers, NOT HOMEOWNERS! If CD legislation is ever be explained in a truthful, balanced, and productive manner it must first get by the pervasive CAI smoke screen.

First, almost all HOAs created in the past 15 years mandate in their Declaration that arbitration must be used in CD dispute resolution. Of the 8,500+ HOAs in the State most are beyond the statute of limitations and cannot sue. As a percentage or relative number of all HOAs, those that changed their Declaration (at the encouragement of HOA lawyers) is very, very small. Thus, precluding HOAs from changing their declaration and infringing upon homeowner’s rights is a weak argument. Furthermore, a recent Colorado court case has ruled HOAs can be prevented from changing their Declaration. The CAI would have the public believe the inability to change the Declaration will have a profound impact on homeowners’ rights but the reality is that it would mostly impact the ability of HOA lawyers to promote litigation in our costly court system.

The other issue involves requiring homeowners to vote on the approval of the use of their own funds in CD litigation. Currently, any HOA Board at the encouragement of their attorney can spend unlimited HOA funds on litigation without the knowledge or approval of homeowners. The CAI opposes this empowerment of homeowners as it would effectively reduce litigation.

We at the Colorado HOA Forum offer the following CD legislative proposal to mitigate litigation and empower homeowners: “HOA homeowners are required to be apprised of and vote on the use of HOA funds in all litigation.” Why is this so difficult?”

 

Impact of Embezzlement in an Emergency!

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OK, the biggest reason for a Homeowners Association is to protect property values. Right? Well, let’s visit another of hundreds of thousands of parallel cases around the country. This one involves the Big Wood Springs HOA in Winnsboro, Texas.

I’ve lived in Texas, El Paso and San Antonio, and even as a kid I knew how powerful some of those winter and spring storms could be.

Members of this HOA were trapped when a December storm damaged the only bridge that separates them from the rest of the world. They need tens of thousands of dollars to repair the bridge along with a number of HOA roads which were damaged by the rains. Emergency vehicles can’t reach them, visiting nurses can’t reach elderly homeowners. Government agencies can’t help out because the damaged bridge is on private property. It’s illegal to use state funds to improve or repair privately-owned structures.

The problem is that the former HOA treasurer was recently arrested for embezzling 60 to 80 thousand dollars from the neighborhood’s budget. Now, there’s no money left for the emergency repairs.

Who’d have thought? Who’d have thought that an embezzler could cause an emergency that would risk the lives of an entire community?

What are your property values now, Big Wood Springs?

(link to KLTV report on HOA embezzlement)

 

HOA Racism

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Deborah Goonan, one of the nation’s most articulate homeowners rights advocates, has posted on her website an important story about racial discrimination by a Homeowners Association. It’s blatant. It’s actionable. And it’s a story that should be read by everyone who respects all races, ethnicities and religions.

by Deborah Goonan (IndependentAmericanCommunities.com)

According to DNAInfo (article linked below), after ending a relationship with her fiance (a white man and a Wall Street executive), Hanying Liu says the cooperative board refused to transfer her fiance’s shares to Liu.

Liu is the only non-white resident of Spice Lofthouse, and alleges cooperative members have made disparaging and discriminatory statements related to her race. She says that the board has not provided a valid reason for denying her full ownership. Liu also alleges that Chinese friends and family have been interrogated by cooperative members, and her daughter, who resides with her, has been mistreated.

NY State Division of Human Rights has investigated Liu’s complaints, and recently filed a discrimination lawsuit against the 15-unit, multi-million dollar cooperative association.

TriBeCa Co-Op Board Discriminates Against Chinese Resident, State Says

(link to article on discrimination lawsuit)

Quote from Ms. Liu, in reference to her cooperative association:

“They are trying to push me and my daughter from our home,” she said.

“They only want you here if you are white — they only tolerated me before because my fiance was white and he worked on Wall Street.

“They are worse than the communists in China — they police me and my friends.”