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Articles Posted in Fraud, Theft and Abuse

For community association attorneys, it often seems that no matter how much we caution homeowners and condominium associations to take all of the necessary safeguards in order to prevent theft and embezzlement, new cases of blatant fraud always seem to crop up.

The latest example was chronicled in a recent article by the Palm Beach Post.  The article focuses on the arrest of the bookkeeper for the master homeowners association of Cypress Lakes, a 1,000-home, 55-plus community off Haverhill Road in West Palm Beach.

PBPfpKristine K. Moore, the bookkeeper, was charged with embezzling nearly $95,000 over the course of years from the association.  Moore was paid $44,000 per year and had been employed by the association for more than six years.

According to a police affidavit, management reviewed the association’s credit card bills and called police in April 2014 after discovering about $10,700 in charges for personal purchases during the preceding several months.  Additional review then uncovered much larger losses, including missing cash deposits that had been paid by homeowners.

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Firm partner Roberto C. Blanch, who has written extensively about community association fraud in this blog and recently authored an article on the topic for the op-ed page of the Miami Herald, appeared on Spanish-language television network AméricaTeVé’s popular “A Fondo” live show hosted by Pedro Sevcec yesterday at 8 p.m.  He was joined by one of the two journalists from el Nuevo Herald behind the newspaper’s investigative series exposing possible fraud at several South Florida condominium communities.  The segment specifically focused on board of directors election fraud, and several cases of suspected fraud were discussed.

An article in the Miami Herald that appeared on Saturday, April 16, reported that more than 250 South Florida condo residents teamed up to march against condo fraud last week.  The protestors, who marched on the streets of Doral, demanded that authorities reform condo laws in order to prevent fraudsters from taking advantage of their communities.  The protest included residents from several areas in Miami-Dade County, including Kendall, North Miami Beach and Aventura, as well as from Broward County.

Our firm has been very active in spotlighting this growing problem throughout the years in this blog and in our complimentary educational seminars for association directors, members and managers.  Recently, firm partner Roberto C. Blanch authored an article that appeared in the op-ed page of the Herald calling for greater law enforcement and regulatory efforts to combat association fraud.  Roberto wrote:

MHerald2015Florida is the state with the most community associations in the country, with more than 47,000, and it has now become imperative for the state’s lawmakers, regulators and law enforcement agencies to change their collective mindset in their approach toward combating community association fraud, theft and embezzlement.

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RobertoBlanch2013Firm shareholder Roberto C. Blanch wrote an article that appears in the op-ed “Opinions” page of today’s Miami Herald pegged to the ongoing investigative series by el Nuevo Herald that is being featured in the Herald.  The article, which was titled “Florida Must Improve Policing of Condo Fraud,” focuses on the need for changes in the state law enforcement and government’s collective mindset towards combating condominium association fraud.

Roberto’s article reads:

An investigative report in el Nuevo Herald chronicled the growing problem of election fraud at South Florida condominium associations. Based on the episodes of possible fraud uncovered by the reporters and the growing number of complaints by local condo associations, it has become apparent that it’s time to put teeth into Florida’s laws and enforcement actions addressing this type of fraud.

The report uncovered that at least 84 signatures were forged in fraudulent ballots submitted in the annual board member election last year at The Beach Club at Fontainebleau Park condominium in northwest Miami-Dade. It also describes how the election at the Los Sueños condo in Hialeah was anything but a dream when it resulted in an unprecedented voter turnout of 115 percent after the final vote tally exceeded the total voting pool.

The boards of directors control the purse strings for the communities they govern, and many communities have annual budgets of multiple millions of dollars that are used for a variety of lucrative service contracts. As such, condo association boards make for appealing targets for fraudsters who conspire to take over their control via annual elections.

MHerald2015In a recent case in Las Vegas, a U.S. Justice Department investigation revealed that 11 associations were defrauded of tens of millions of dollars in a board of directors takeover scheme from 2003 to 2009. Forty-one defendants were convicted of getting their straw unit buyers elected to the associations’ boards through tactics involving forgery, bribery, ballot stuffing and dirty tricks. The conspirators were found to have rigged the associations’ elections by traveling to Mexico to print phony ballots, using the master key at a condominium complex in order to remove ballots from mailboxes, and retrieving discarded ballots from condo dumpsters.

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In her blog entry below that was posted on Sept. 10, Laura Manning-Hudson wrote about the disturbing trend of increased cases of fraud, theft and embezzlement at Florida community associations that she and many other association attorneys have been seeing. The damage that can be inflicted on associations by unscrupulous managers, employees and board members is indeed very severe, and this article will focus on the types of schemes that appear to be most prevalent and some of the best practices for associations to employ in order to help to avoid becoming a victim.

If it seems as if there have been more and more stories in the news recently about condominium association’s funds being stolen or misappropriated by either board members or property managers, it’s because it’s true. Many of the reports have been coming from Bob Norman of Local 10 News (WPLG), the ABC affiliate for Miami-Dade, Broward and the Keys.

The recent news about the start of a three-year jail sentence for the former property manager of a Sarasota, Fla.-area condominium who was convicted of stealing more than $200,000 from the association she managed sent a resounding message about the severe repercussions that property managers and association directors can face for theft and fraud.

Investigative reporter Bob Norman from WPLG Local 10 News in South Florida has done a number of reports about fraud and theft at area condominium and homeowners associations. His most recent report is a follow up to a story that aired last September about the allegations by the residents of the Georgian Court North condominium in Fort Lauderdale against Ed Ryan, the longtime president of the association’s board of directors.

GaryMars.jpgThe following article authored by the firm’s Gary M. Mars appeared in the April issues of Our City Weston and Our City Davie magazines:

Yet another report about an ongoing dispute involving alleged board member malfeasance at a Broward County condominium association has made the local nightly newscast on Local 10 News (WPLG, ABC). The report by the station’s Bob Norman chronicles the concerns of a number of the residents at the Summer Lake Condominium in Oakland Park over the actions of their association’s board of directors, which has been fined by the state’s Division of Condominiums for failing to hold timely elections.