Director Fraud

Admin note:  I have stopped posting to this page.  Reports of fraud are too numerous and time consuming to track.

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People in 50-plus communities are often targets of fraud because they tend to have more assets and are often less aware of these scams.

Embezzlement cases point up the need for board directors to be hyper-vigilant about the money entrusted to them. They need to use a magnifying glass to study association financial reports – and to understand what they’re reading. Likewise, homeowners should insist on having negative budget variances reviewed at board meetings and a monthly financial budget performance report available for their review. Transparency is often problematic in planned communities and this creates a hospitable environment for fraud. Board members should openly review budget performance with the Finance Committee.

Associations nationwide have been plagued by embezzlement: by community managers, by accountants, and by board treasurers.  Associations control hundreds of billions of dollars in cash comprising assessments, interest, transfer fees and other dollars collected from homeowners. Embezzlement occurs largely because there are so few controls over association money. Whoever has a pen, the bank account numbers and PIN can too easily drain the accounts.

$200,000 Missing

Tamarac Fla. HOA president charged with forging checks

2014

A South Florida community is dealing with the sting of betrayal, as a once-trusted homeowner’s association president is charged with forging her own neighbor’s names in a years-long embezzling scheme.

According to the Broward Sheriff’s Office, Michelle Changar-Coe, who was president from 2009 through last year, stole about $200,000 from the homeowner’s association of the Mainlands home community in Tamarac.

Changar-Coe was also a former chairwoman of the city’s Parks and Recreation Department.

27,000 Missing

Dubuque homeowners association reports $27,000 theft

Posted: May 10, 2014

A Dubuque homeowners association reported the theft of almost $28,000 from the association since 2010.

According to a Dubuque police report, Kelly’s Bluff Homeowners Association, 3 Kelly’s Bluff, Lot A, reported the theft of $27,758.83 between November 2010 and 8:20 a.m. May 5. The report said that amount was lost through checks and possibly money transfers. Dubuque police Lt. Scott Baxter would not disclose further details on the report, saying that it is still an active investigation.

8 Million Dollars Missing

Judge sets trial in HOA fraud case

By JEFF GERMAN
Excerpted from LAS VEGAS REVIEW-JOURNAL

February 26, 2014

Leon Benzer: Accused of being the mastermind behind a Las Vegas HOA scheme. Benzer and his co-conspirators are accused of conspiring to pack HOA boards to gain legal and construction defect contracts for themselves. Benzer is among nearly 40 conspirators charged in a scheme to take over Las Vegas Valley homeowners associations.  The case is now set to go before a jury on Oct. 6.

Former construction company boss Leon Benzer, the alleged mastermind, and his co-defendants are waiting to be tried on conspiracy and fraud charges in the multimillion-dollar scheme, which occurred between 2003 and 2009.  The conspirators are accused of stacking HOA boards to gain legal and construction defect contracts for themselves. Straw buyers were recruited to purchase condominiums at nearly a dozen developments around town and then elected to the HOA boards through bribery and rigged elections.

Prosecutors have alleged that Benzer, the late construction defect lawyer Nancy Quon and others funneled $8 million through secret bank accounts to fund the scheme to land contracts worth millions of dollars more from the homeowners associations.  Quon committed suicide on March 20, 2012, and was not charged in the case. Another attorney, David Amesbury, who had pleaded guilty, killed himself five days later.  Others lawyers, former Las Vegas police officers and corrupted HOA board members are among those charged in the case.

$267,000 Missing

HOA Treasurer Arrested

February 21, 2014

EVANS, Ga. (WRDW) — This sign’s used to keep the bad out, but little did Stratford neighbors know, it had already gotten in. It was disguised as this woman, Laurie Vanover, who stole 267,000 bucks from her own neighbors.

“I couldn’t believe that something like this could happen,” said Lisa Elmore, who lives in Stratford Homes Subdivision.  She, like the rest of the neighborhood, trusted Vanover. But all that trust vanished, right along with a quarter of a million dollars.

“Mostly, I think the residents want the money back,” she said.  And they’ll get it. Aside from the jail time and probation, Vanover was also ordered to pay back more than 250,000 dollars plus a 10,000 dollar fine.

“When this happened, I think residents realized that they hadn’t been as involved as they could’ve been,” said Elmore.  Things have changed. A new board has been elected and new rules have been written.  “I think you have to be very careful about who you put in those positions,” she said. “Make sure there are a lot of checks and balances.”

Suit alleges fraud by HOA officers

2013  Susan DeCuyper is suing former board members of a Brentwood community’s homeowners association, alleging they fraudulently tried to obtain neighborhood common land. / Sanford Myers / The Tennessean

Beneath the facade of one of Brentwood’s most affluent communities, neighbors have come toe-to-toe in federal court over allegations of wiretapping, fraud and public, vulgar name-calling.  “At its core this is a case about greed, abuse of authority and what a handful of rogue individuals are willing to do to their fellow neighbors,” the complaint states.

The lawsuit asserts DeCuyper and other homeowners had their community emails intercepted and blocked to control and contain their dissent against the land transfers to the HOA officers.  The Tennessee Wiretap Act provides for up to $10,000 penalties for each violation. The lawsuit seeks damages in excess of $1 million.

Heated meeting.  The lawsuit describes in detail a series of events — including a demand that HOA officers “cease-and-desist” their alleged email blocking, and requests for meeting minutes and HOA records — culminating in an Aug. 8 HOA meeting in which nearly all of the board members resigned.  During that meeting, Robert Nebel defamed DeCuyper and used a vulgar slur to characterize her, she alleges.

According to the lawsuit, the former board members also tried to circumvent the opposition to their plans by soliciting proxy votes from residents by going door to door to acquire the voting rights of homeowners — often without their knowledge of the board’s agenda. But only board members were allowed to vote the proxies.

The case is set to be heard in March 2015 by U.S. District Judge Todd Campbell.

$29,000 Missing. 

 2013.  Baton Rouge, LA.  David M. Heroman, 42, 6302 Riverbend Lakes Drive, Baton Rouge, was booked on Thursday into East Baton Rouge Parish Prison on 10 counts of felony theft, according to an affidavit of probable cause.

Heroman, who served as president of the Riverbend Lakes Homeowners Association during the time of the alleged theft, is accused of stealing $29,000 from the association between January and July of last year to fund a gambling addiction, the affidavit says.

$200,000 Missing.

2013. Former Homeowner Association Treasurer Arrested.   A woman accused of stealing more than 2-hundred-thousand dollars from a local homeowners association is now under arrest. Tuesday morning, Laurie Wainwright-Vanover surrendered to police.

$41,000 Missing, 

2012. Man charged with stealing more than $41,000 from HOA. HOUSTON – A Tomball man is charged with stealing more than $41,000 from a home owner’s association where he served as president. Prosecutors say Harold Francis Reed is charged with aggregate theft of over $20,000 and less than $100,000.

Breach of Fiduciary Duty. 

2012. State files lawsuit against three board members of The Harbours.  Case is first filing under law allowing state to regulate homeowner associations.   JEFFERSONVILLE — Three board members of The Harbours Condominiums Association are named in a state lawsuit for allegedly breaching their fiduciary duty and committing fraud.  The Indiana Attorney General’s Office filed the complaint in Clark County against board members Kevin Zipperle, Mary Lou Trautwein-Lamkin and Sharon Chandler, according to a press release from the office. Frank Prell is also named in the lawsuit as a former owner of multiple condominium units at The Harbours which is located at One River Point Plaza.  “Today’s lawsuit is the first of its kind under a new state law allowing the Attorney General’s Office to regulate homeowner associations,” said Gabrielle Owens, director of the Homeowner Protection Unit and Licensing Enforcement Unit of the Indiana Attorney General’s Office. “Board members have a fiduciary duty to serve in the interest of those they represent. Our office is committed to protecting homeowners and will continue to bring actions against violators who misuse their positions for personal gain.”  A judge will determine what amount of restitution is due to the HOA from any actions that resulted in loss of dues and income to the HOA. According to the state’s lawsuit, the defendants should be barred from using the association’s funds for their legal defenses.

$26,000 Missing.

2012. Naperville library board president, businessman accused of embezzlement.  A prominent Naperville civic leader and real estate agent is accused of embezzling nearly $26,000 from a homeowners’ association in the western suburb.  Jerome L. “Jerry” Feldott, president of the Naperville Public Library Board of Trustees and a member of one of the city’s founding farm families, faces trial on a felony charge of theft or unauthorized control of over more than $10,000 but less than $100,000, according to records on file in DuPage County Circuit Court in Wheaton. Feldott, 63, of the 1000 block of Benton Avenue near downtown Naperville, is president of Feldott & Associates Ltd., and works as a real estate agent and property manager.

$26,000 Missing.

2012. West Melbourne, Florida.  West Melbourne Police arrested 67 year old Sandra Blumberg, the Treasurer of a Homeowner’s Association for Hunters Creek of West Melbourne.  Police say that Mrs Blumberg had been writing checks to herself out of the HOA’s account since October of 2010 or earlier, to recover money she was spending on Lotto tickets.  Nearly $26,000 was alledgely stolen my Mrs. Blumberg who was arrested on tharges of Grand Theft and Scheming to Defraud.