Articles Tagged with association fraud

The outcome of this year’s legislative session evoked a lot of confusion from property managers and boards of directors serving the community association industry.  As a result, we have received a lot of requests from our readership asking for clarification on some of the laws that were enacted. In this post, we will be tackcc-article-photo-fb-3-300x158ling the debit card provision in an effort to clear up some misconceptions about the new legislation.

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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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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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