As documented in a recent report in the Miami Herald, the property manager of two Sunny Isles Beach condominium towers has been arrested for stealing hundreds of thousands of dollars from the associations for the properties.
Property manager Georgina Pineda (pictured below) was booked into a Miami-Dade County jail recently, and apparently it wasn’t her first brush with the law involving association theft and fraud. This time, court documents allege she stole hundreds of thousands of dollars from the Eden Roc Condos, which she had managed since 2017. The documents indicate that much of the money went to feed her gambling habit at the Miccosukee casino.
According to Sunny Isles police, Pineda had access to the condo association’s debit card. She was supposed to use it only for small expenditures for the community, but when the association board demanded a full audit she “continually made excuses as to why she was not providing accounting reports.”
The arrest report also states that when Pineda finally provided a spreadsheet, it was missing numerous transactions — including withdrawals at the Miccosukee casino in West Miami-Dade. In addition, she was regularly transferring association funds into her own independent business account.
When she was confronted by the Eden Roc association president with the fact that hundreds of thousands of dollars were missing from the association’s coffers, Pineda admitted that she had a serious gambling problem and asked for time to pay the money back.
Similarly, Pineda also stands accused of stealing between $150,000 and $400,000 from the King David Condominium, which is another Sunny Isles Beach community she managed. Click here to read the complete report in the newspaper’s website.
It appears that the manager of these two condominium properties was able to syphon the funds from the associations’ bank accounts via the use of debit cards. In fact, as my colleague Laura Manning-Hudson wrote in a 2017 post in this blog, the Florida Legislature has adopted legislation prohibiting association officers, directors and employees from using debit cards issued in the name of the association. This legislation was aimed at protecting against dishonest individuals having access to cash from large association bank accounts. However, while the restriction on the use of debit cards limits direct access to cash that condominium associations may have in their accounts, associations may still obtain and use credit cards issued in the association’s name.
These cases also demonstrate that while they have been prohibited for condominium associations, the use of debit cards by Florida associations may continue to some extent. Given the susceptibility to fraud and abuse presented by debit cards, condominium association directors should avoid using them altogether. Instead, while not guaranteed to eliminate fraud or misuse, associations should limit themselves to using only credit cards on a very restricted basis.
As Laura recommended in 2017, if an association’s directors insist on having a credit card issued for the association, we suggest allowing only one card to be issued, keeping a low limit on the card, paying it in full every month, and implementing measures to account for verification of its use on a periodic basis between statement periods. For instance, associations should conduct monthly reviews of all bank and credit card statements by at least two people, ideally including both a board member and management staff. There should be an annual audit by experienced and reputable accountants to provide a careful review and independent certification of the validity of all financial records, and associations should also consult with highly experienced accountants and attorneys to discuss and implement other protocols to help avoid what occurred at these South Florida condo communities.
The changes enacted under Florida’s 2017 condo fraud laws were aimed at giving law enforcement a mandate to take cases of association fraud extremely seriously and allocate all the available resources to prosecute them. Florida associations must make effective use of the proper safeguards, and those that do become victimized are now better equipped to engage law enforcement.