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The firm’s Gary M. Mars shared his insights into the ramifications of a recent Miami-Dade grand jury report on condominium association fraud in an article in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which was written by DBR reporter Samantha Joseph, notes that “[c]riminal charges could soon be in store for misbehaving condominium board members and managers if recommendations in a Miami-Dade grand jury report gain traction. Self-dealing, destroying accounting documents, withholding records, participating in kickbacks, interfering in elections and other willful violations of Florida’s condominium statute could leave individual board members criminally liable for the first time.”
The DBR article reads:
The question isn’t whether there’s fraud and abuse among some of the boards, according to the grand jury report, which cites thousands of annual reports of alleged wrongdoing to Florida’s Department of Business and Professional Regulation. The question is how to police it and shore up a regulator described as a toothless tiger.
“Our investigation exposed . . . severe weaknesses within the current laws and regulations,” the grand jury concluded. “Because the condo laws and regulations lack ‘teeth,’ board directors, management companies and associations have become emboldened in their willful refusal to abide by and honor existing laws in this area. They even engage in fraudulent activity which goes unpunished.”
The report took aim at the Department of Business and Professional Regulation — an allegedly understaffed agency with broad jurisdiction over condo associations and more than 1 million businesses and professionals, including accountants, contractors, cosmetologists, veterinarians and real estate agents.
“The DBPR seems ill-suited to resolve, correct or prevent many of the recurring problems that have been brought to their attention,” it stated.
. . . Longtime community association counsel Gary Mars, shareholder at Siegfried Rivera in Miami, applauded the agency’s efforts in juggling thousands of complaints that would otherwise clog civil courts, but suggested an overhaul to place criminal cases beyond the department’s purview.
“Ultimately these should end up in a court proceeding, rather than going through a state agency,” he said.
The article concludes:
The grand jury found “delay and inaction” amid a growing number of unresolved complaints.
. . . The grand jury recommendations would create criminal charges for tampering with association elections and a second-degree misdemeanor for first-time offenders who destroy or fail to maintain accounting records, with a bump to first-degree level for subsequent violations. It would also levy charges for withholding records to conceal fraud and other criminal behavior, a $1,000 daily fine for management companies that fail to turn over association records within 10 business days, and expand election monitors’ powers, among other changes.
Our firm congratulates Gary for sharing his insights into the ramifications of this grand jury report with the readers of the Daily Business Review. Click here to read the complete article in the newspaper’s website (registration required).