Damn the American Flag!
Yes, that’s what many Homeowners Association boards in America are saying. And they’re suing to get rid of any trace of the Red, White and Blue.
You really have to watch this four minute speech by Texas Congressman Ted Poe!
Tag Archives: HOA corruption
HOA Embezzlement Hits All, From High & Mighty to Small & Weak
guest blog by Deborah Goonan
Some readers may be under the impression that embezzlement of HOA funds only happens to Homeowners’ Associations (HOAs) with hundreds or thousands of units and elaborate amenities that translate to big operating budgets. I’ve talked to some people that think these cases are limited to certain parts of the country such as the Sunbelt states or major cities.
Nothing could be further from the truth. Even modest HOA communities in small towns are at risk for theft of funds by rogue Board members, community managers, or Developers.
Take Skyview Estates, for example. Skyview is a relatively small townhouse community of a few dozen homes located in Richland, PA, a town with a population of less than 1600. The nearest city is Johnstown, PA, with a population of about 20,000. There are no amenities such as a pool, and houses are located on one street named after the company that developed the community.
Three members of the family owned business, Julz Development Group LLC, were recently arrested for stealing nearly $80,000 in HOA assessments over a period of five years. Dennis Michaels, his wife Julie Michaels, and daughter Juliana Zamias constructed Skyview Estates beginning in 2006. As is typical of HOAs, the developer controlled its Board of Directors during construction. Homeowners elected a Board of volunteer owners beginning in 2013, and that’s when Board President, David Mishler, discovered that money was missing. The Board authorized a forensic audit, which resulted in charges being filed against Juliana Zamias and her parents. The audit found that numerous checks were written for “cash” and money was transferred to personal accounts with no explanation.
Active real estate listings for homes in Skyview Estates, priced between $130,000 – $160,000, note HOA fees of $125 per month, to cover lawn maintenance and snow removal. For an HOA of less than 50 homes, $80,000 probably exceeds the amount of assessments it collects in an entire year.
As is often the case, theft of HOA funds can occur for several years before it is discovered, and those perpetrating the crime are usually considered to be trustworthy. (See Characteristics of Embezzlers, linked below)
The management and political structure of HOAs provides ample opportunity for mishandling of funds, because only a few individuals have access to the collective assessments of the community. In the case of Skyview, it was the Developers. But even after the developer turns over control to volunteer homeowners, it is all too common for the Board of Directors to place control of the money in the hands of one Officer or a hired Community Manager. In some cases, two or more people can work together to defraud homeowners, a little bit at a time, over many months or years.
In Pennsylvania, where Skyview Estates is located, the penalty for embezzlement of cash or property worth more than $2000 is a fine of up to $15,000, up to 7 years in prison, or both. (18 Penn. Con. Stat. § 3903.)
However, most local law enforcement agencies lack adequate funding and training to fully investigate white-collar crime. That means quite often, even after discovered and prosecuted, those who steal from HOA coffers end up with light sentences. Although convicted individuals may be required to provide restitution, the HOA is often unable to fully recover the loss. Even if the HOA carries a valid fidelity insurance policy to cover loss from theft, there is usually a deductible and a subsequent increase in insurance premiums. Sometimes insurance companies drop coverage altogether, leaving the neighborhood completely unprotected.
By contrast, embezzlement of more than $1000 from the federal government or a federal agency results in a fine of $250,000, up to 10 years in prison, or both. For amounts under $1000, the fine can be up to $100,000, up to a year in prison, or both. (USCA §641)
Small communities provide big opportunities for embezzlers, mainly because everyone knows and trusts the individual or individuals with access to HOA bank accounts. And with relatively little accountability, even after being caught, it is no wonder we read several reports of HOA embezzlement on a weekly basis.
(link to WJAC TV report of HOA embezzlement charges)
(characteristics of embezzlers)
Bashing the Handicapped Elderly
We all saw what happened a few days ago when a Missouri HOA refused a sick girl’s request for a playhouse. It went viral, and newspapers and TV stations around the world began covering the story. A certain little HOA president was bombarded with hate calls and mail.
Here’s another case that’s so outrageous it’ll make you spitting mad.
In Atlanta, Rosetta Turner just got out of weeks of intensive care but she’s being harassed to death by the Providence Place Homeowners Association. Rosetta is up to date on her dues. But the HOA has compiled two pages of violations, most of which are not specified. They’ve even fined Rosetta because her home care nurses park on the street, the only place that’s available.
The evil at Providence Place HOA gets worse! Oh, does it get worse.
This fragile, elderly surgical patient now has no running water. Yes, to aggravate the injury and the public humiliation, Providence Place has disconnected her water and won’t turn it back on until she pays thousands of dollars of fines for these violations.
Time to get the NAW grapevine going again!
Providence Place HOA
2555 Flat Shoals Rd,
Atlanta, GA 30349
(770) 996-1605
Providence Place HOA, 2555 Flat Shoals Rd, College Park, GA, 30349
The Problem With Private Police
Last year I ranted and railed about the Illinois Supreme Court allowing Homeowners Associations to hire untrained security guards who are allowed to make traffic ‘arrests.’ It was an idiotic decision because it put no limits on the police powers given to these ‘wanna-be’ cops. Anyone who’s covered news events for as many decades as I have knows that untrained guards cause many problems, not the least of which is unlimited liability to their employers.
Legitimate police officers are in constant training, their skills are always being honed, they’re repeatedly learning new law enforcement techniques, going to legal seminars and qualifying at the shooting range. Under the Illinois decision any 18 year old punk could put on a uniform, badge and gun, and even brandish an AK-47 if he so wished. There are no rules!
Now we read that it’s common practice in Homeowners Associations in Virginia. Fake cops there can even ‘invent’ fake police departments. After a number of incidents involving private cops, the Virginia Legislature is trying to give them some mandatory training.
But imagine the liability to the individual homeowner! A sex assault, a car accident during a chase, an accidental discharge of a weapon and a multi-million dollar lawsuit could be filed against the HOA that hired the fake cop. All those homeowners could be hit with special assessments to cover legal fees and liability judgments.
Very scary.
(link to Washington Post story on Virginia’s private cops)
Dallas Jews Face Yet Another First Amendment Fight
guest blog by Deborah Goonan
About a month ago, I wrote about Congregation Toras Chaim (CTC). With the help of Liberty Institute, CTC prevailed in a lawsuit filed by their HOA with regard to a dispute over deed restrictions limiting HOA homes to “single family use.” Based upon two Texas laws protecting religious freedom, a Colin County judge threw out an HOA’s case against owners of a home used as an Orthodox Jewish synagogue.
But that’s not the end of the story.
On March 2, 2015, the City of Dallas filed suit against CTC and the owners of the property at 7103 Mumford St, Mark B. and Judith D. Gothelf. The petition claims that the defendants have failed to obtain a Certificate of Occupancy (CO) required by the City of Dallas for all non-residential uses of property. The City insists that the property be brought into compliance with local ordinances before they will issue a CO for the property.
Specifically, the City explains:
“Currently, Defendants’ only permissible use of the Property is a single family use. Any other use of the Property that would require a CO [Certificate of Occupancy], such as the proposed use as a synagogue, without first obtaining a CO and complying with the life-safety requirements entailed therein, presents a substantial danger of injury or adverse health impact to persons and/or property of persons other than the Defendants.”
Curiously, the dispute over the CO and ordinance requirements stretches back to November 2013, not long after homeowner David R. Schneider filed his first lawsuit against the Gothelfs on the matter of deed restrictions in the McKamy IV and V HOA.
The City is now requiring that multiple modifications be made to the property, including adding 13 parking spaces, adding a firewall barrier between the first and second floors of the dwelling, and handicap accessible features including 2 wheelchair accessible restrooms on the first floor. The estimated cost to bring the Mumford Street home into compliance: roughly $200,000.
Attorneys from Liberty Institute, representing the Gothelfs and CTC have been back and forth with the City of Dallas for 18 months, initially arguing that the CTC is exempt from the City’s bureaucratic ordinance requirements based upon state and federal laws governing religious freedom. After all, they argue, the congregation of Orthodox Jewish families is smaller than most Christian Bible Study groups that meet in residential homes, without being required to comply with cost-prohibitive and unnecessary city codes.
The City claims they are within their legal rights to insist upon CO requirements, despite religious use status, state and federal law. The Congregation, through their attorney, then proposed a modification of their request, to ensure a maximum capacity of less than 50 occupants, but despite the good faith effort to compromise, the City has refused to back down on its requirements. In fact, every attempt of the CTC to compromise and avoid litigation has been rejected, or the City has changed the requirements yet again. The City now claims it will allow the defendants to formally request a special exception or variance, however if that request is denied, the modifications will have to be made within 14 days. If the deadlines are not met, CTC faces $1,000 per day fines for non-compliance.
According to the Rabbi, about 10 people attend daily religious study, and about 30 attend on the Sabbath, arriving on foot since their faith forbids driving on the Sabbath.
Also according to the Rabbi, the cost of extensive modifications combined with the cost of daily fines threatens the very existence of the Congregation. Its members would have to move to a different location within walking distance of their gathering place for weekly services.
Is it the City’s intent to protect religious freedom or to circumvent First Amendment rights by way of unreasonable enforcement of ordinances? And why has the City chosen to stop working with the Congregation and property owners now, on the heels of dismissal of the HOA’s case against them?
This battle for First Amendment rights is not over. The Liberty Institute has issued a statement that it plans to aggressively defend the religious rights of CTC.
“This outcome matters,” said Kelly Shackelford, Liberty Institute President & CEO.
“Any verdict that does not protect this congregation would be tragic. Not only for them, not only for Dallas, but for America. If small meetings by people of faith are not allowed in their homes, that would greatly damage religious freedom for all.”
(link to WFAA TV news coverage of suit filed by City of Dallas)
