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(Former) HOA rant (a.k.a. the laws protect the guilty)

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  • (Former) HOA rant (a.k.a. the laws protect the guilty)

    No names mentioned

    Almost 7 years ago my wife and I moved into our current home which is part of a town home community. We met the board president and we thought everything was fine. Not even a year later a lot of suspicious things started to happen.

    We used to get financial statements and they always showed 20% of the association fees not coming in. Two years after moving in they raised the rates by 25% (pull out your calculator and do some match). It seemed that 1/5 of the units were not paying their fees so the president raised them 25% so everyone else could pay for them - that was my suspicion since it was rumored that the board wasn't paying their own fees (and their friends).

    Two board members moved out and we just had our president on the board for over a year.

    Since the bylaws allowed it my wife and I joined the board to try to help out the community. We found out that the president had not been paying any association fees because she couldn't afford them and that's why she hadn't put liens on anyone's properties because then she would have to put one on her own. Also, a lot of work wasn't being done because she (personally) couldn't afford the fees - she's making financial decisions for the community based on her financial situation.

    My wife and I were going to request to have a bylaw added - all board members need to be current with their fees (we were trying to decide between 60 and 90 days). Of course the president started a smear campaign and got us both pushed out of the board.

    For several years she was the only person on the board. I always requested the financial statements from the CPA what I got was a joke - "money in: money out" for each year. No listed expenses, no bank account information (balance etc..), etc.

    Luckily last year (Jan 1, 2009) one of the other home owners joined the board and started things in motion. FL also passed a law anyone more than 90 days in the rears. Late last year the new person (VP) had enough support from the community and had two people ready to step up (myself and one other person) that he used this law to kick her off the board.

    We suspected some scary shit going on but I had no idea - our first order of business was to get rid of our "management company" (a single person doing it on the side when she worked for a company that also did it), our CPA (explained later), our attorney, and our bank.

    Then we audited the books and it is quite scary. These are the facts:
    • The ex-president was writing checks in excess of $3000 a month for "expense reimbursements" - there were even checks written to other respectable people in the community (including my wife) for the same yet we NEVER took a check from the association Checks from the association were also written to pay for cell phones, car chargers, and other related accessories for the ex-president's BF (receipt was sumbitted and it was on his cell phone account)
    • The ex-president was writing checks off of the community's account to pay for two cell phone bills, AT&T bills (presumed home phone and internet), electric bills, water bills
    • The ex-president wrote checks to pay for car rentals and hotel bills
    • The ex- president used association money to pay for her notary license and her fees to the notary association.
    • The ex-president used association money to form her own business
    • The secretary of our CPA got at least one check (hundreds of dollars) as a "gift" from the association.
    • When the new CPA got the records, the ex-president, for some reason, was current with her association fees
    • Inconsistent money transfers. For example, $50,000 would be taken out for insurance but then a check for only $48,000 would be written to them - where's the other $2000?


    You'd think someone (like the manager, attorney etc..) would step forward and say something? Nope. Why?
    • The association paid for the manager's business license and insurance
    • The manager would bill us for everything she would do at a rate of $100 an hour (minimum an hour). So she'd write a check for insurance, then she'd write herself a check for $100. Then she'd write another check, then one for herself for $100. This is on top of the monthly fee she charged us.
    • The attorney is the one who formed the above mentioned businesses (for the ex-president and the manager).


    A lot of shady and illegal shit was going on.

    When we took over this is our our expenses shifted:
    Management fees - went from $400 a month plus $100 fee every time she did something down to $250 a month.

    CPA fees went from $300 a month to nothing (CPAs are included with the management company)

    Attorney fees went from $300 a month plus extra fees to just fees (no monthly retainer if we use the attorneys who work with the management company).

    Lawn maintenance - $1500 a month to $400 a month (and yet the former lawn guys never did anything).

    We also had new roofs put in. Supposedly there wasn't enough of an insurance payout so each unit had to pay a $3500 special assessment (roughly $100,000 total). The roofing company is refusing to give us any statements or invoices and even the management company agrees, that would have been $500,000. We could have gotten gold plated roofs for that much. We should have only paid $250,000 for high end roofs, maybe $200 for average.

    Yet some people are still supporting the ex-president, mainly because she's spreading lies about he board (she claimed one board member stole someone else's air conditioner - yeah, he just went out and took a 3 ton package unit on top of the roof and brought it over to his building).

    What's pissing me off is that we cannot tell the homeowners exactly what is going on. We do have a "vague" letter going out 3-5 days before the ballots go out. Legally we can't discuss what we know, only to remain vague and can't mention any names (but it would be obvious). We've had draft after draft go between us and the attorneys for a version we can send out and it is so watered down it may not do much with some of her hard core supporters.

    What's REALLY pissing me off is that each homeowner does have the right to the financial records and if they asked us to go over them we can. Yet we can't coach them to do that, they have to do it on their own so even if ONE did this and asked us to go over them, then we could show them the inconsistencies.

    Our management company and attorneys do agree, while a lot of this does go on and they've seen larger total issues (some in the millions of dollars) this is, my far, the HIGHEST per unit per month they've ever seen.

    We have 3 letters ready to go out before the election ballots go out:
    1) A brag letter for 2009 and a plans letter for 2010 - what the new board has done.
    2) The general "what happened" letter - letting the home owners know that a former board member is under investigation.
    3) A full disclosure letter - once charges are filed it becomes public record. We can let the community know exactly what charges and why there are against the ex-president.

    After we're done with the ex-president we're going to go after the CPA and attorney (with their respective state agencies), and the ex-manager as well as letting her company know what she was pulling (taking customers away from them).
    Quote Dalesys:
    ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

  • #2
    The law isn't protecting the guilty, it's simply preventing a lynch mob from forming. The ex-prez is easily guilty of embezzlement charges, and unless I stand corrected (and please do correct me if I'm wrong) there's enough there to make it at the very least a felony, if not bumped up to the federal level, which is guaranteed jail time if found guilty (and enough proof exists for a guilty verdict to be had). That's not factoring a civil lawsuit being applied. At best she'll go to jail for some time, and have nothing when she gets out.

    I wonder though, if you can't ask the local media to do a story on her. The law says that you can't directly tell the members, but it might be possible to let the media know.
    I AM the evil bastard!
    A+ Certified IT Technician

    Comment


    • #3
      HOLY CHECKBOOKS BATMAN!!!

      I think fraud, embezzlement, and forgery? may be on the list here. Can the atty's forward this to the city DA and ask about a prosecution? This is not pretty, and I think more than just a slap on the wrist would be ....appropriate.

      But - according to a very close friend who spent a few years in Fed Prison....white collar embz/theft crimes don't have a long sentence. Compared to drug stuff. So remember - even if you want to throw book, desk and gavel at this person, the sentence may not be as long as you wish it to be.

      I say take this to the cops/DA and get this person busted.

      Cutenoob
      In my heart, in my soul, I'm a woman for rock & roll.
      She's as fast as slugs on barbituates.

      Comment


      • #4
        I believe the reason for not saying anything until charges are pressed, or it's taken to the courts is so that nobody can say the residents are biased against the former president. You don't want to color anyone's opinion before the court case becomes public.



        Eric the Grey
        In memory of Dena - Don't Drink and Drive

        Comment


        • #5
          Quoth lordlundar View Post
          The law isn't protecting the guilty, it's simply preventing a lynch mob from forming.
          Quoth Eric the Grey View Post
          I believe the reason for not saying anything until charges are pressed, or it's taken to the courts is so that nobody can say the residents are biased against the former president. You don't want to color anyone's opinion before the court case becomes public.
          We can't even proactively show people the FACTS. We can't say "look at this - according to the financial reports (which all homeowners have full access to if they request it) and say:

          Here is where there was a $xxx.xx check written to (cell phone company). Here is the matching receipt and it shows the ex-president's boyfriend as the account holder.

          Here is several $x,xxx.xx withdrawals made for "expense reimbursements" yet there is no supporting documentation.

          Here is a check for $xx,xxx made out to the presidents boyfriend for "hurricane cleanup" in 2008. One problem - no hurricanes hit us in 2008 - only tropical storm Fay and she just dumped a lot of water on us. No cleanup was needed.

          And so on.

          But - I have a plan.

          The funny thing is that when we requested all the financial documents from the ex-president she claimed that they were all destroyed in hurricane Wilma. Really? Wilma hit us in 2005. The documents we requested were for 2006, 2007, and 2008. Did you go back in time with them to October 2005?
          Quote Dalesys:
          ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

          Comment


          • #6
            Since a lot of these "missing" funds went to the ex-HOA leader's pockets, the IRS would like to know about this matter. After all, ill-gotten gains are taxable.
            I'm trying to see things from your point of view, but I can't get my head that far up my keister!

            Who is John Galt?
            -Ayn Rand, Atlas Shrugged

            Comment


            • #7
              Omg! Draggar i hope you and the others are able to get this dumbass the legal way. Thats ridiculous. Im pissed off and I dont even live there....

              Comment


              • #8
                What all do the bylaws have to say about President, Execution of Presidential Powers, things like that?

                Why (honestly?) can you not tell the members of the HOA that this all is happening? Seems ...off... to me.

                Oh from a paralegal friend: \
                * If you want Federal - talk to someone about a Money Laundering case. (ill gotten gains, changing format of asset.)
                -In Florida Fed courts - they'd be happier to do this since the drug trade down there is flush with money laundering.

                *File complaint with FL BAR FIRST, before any more sh1t flying. File misconduct complaint for ETHICAL violations on ATTY.

                *File complaint with FL CPA association next. File misconduct complaint for ETHICAL and MONETARY violations on CPA.

                This will divide and conquer all (major) dirty parties in this scheme of things.

                *As for Manager Person who was pulling customers away, she/he may be indicted into the money-laundering / embez scheme as party to the batch - "misprison of a felony/law" (actively knowing and concealing information). Once the BAR/CPA stuff starts rolling, the reports / info generated will be more able to prosecute this ex-manager person if chosen so.
                -But report her to her parental company for sure.
                - this can wait a bit, because you'll get free legwork from BAR/CPA (optional)

                Good luck, and PM me if you need to chat with my paralegal friend .

                Cutenoob
                In my heart, in my soul, I'm a woman for rock & roll.
                She's as fast as slugs on barbituates.

                Comment


                • #9
                  A little off topic but still concerning the HOA; I know the HOA president in one of the communities personally (we used to date) and he had a great story. I'll post it as soon as he emails it to me.
                  You're gonna love it.
                  Ridiculous 2009 Predictions: Evil Queen will beat Martha Stewart to death with a muffin pan. All hail Evil Queen! (Some things don't need elaboration.....) -- Jester

                  Ridiculous 2010 Predictions: Evil Queen, after escaping prison for last years prediction, goes out and waffle irons Rachel Ray to death. -- SG15Z

                  Ridiculous 2011 Prediction: Evil Queen will beat Gordon Ramsay over the head with a cast-iron skillet. -- FireHeart

                  Comment


                  • #10
                    A little update - the ex president still wants to run to be on the board and with the number of applicants we were worried that she could make it back onto the board with as little as 2-3 votes (considering average turnout and number of aplicants) so we had a littlw "off the record" meeting yesterday.

                    The current president got the "packet" from our CPA Friday night - 21 pages of his findings and it was even more than I expected - somewhere between $200,000 and $250,000 in "questionable" expences / spending.

                    The attorney said that it was OK for us to share the findings with the homeowners (since it is their money and they are allowed acces to the financial statements - this is one, just not a pleasant one) as long as they understand that this document is for factual / accounting purposes, not accusatory purposes.

                    Let's say if there was any support for the ex-president with aonyone who wanted to run for the board is now gone.

                    We had 6 people running for 3 positions. Obviously the ex-president is not going to withdraw so two of the others agreed to withdraw and they can be "advisors" to the board (for their building etc..) and still be in the loop. I'd hate to see the ex-president on the board, even as a minority vote (because then she could circumvent the other board members, cause problems all the way etc..).
                    Quote Dalesys:
                    ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

                    Comment


                    • #11
                      Hmm, odd. You should be able to refuse her ability to run for the position on legal grounds. (she's facing charges of embezzlement after all)
                      I AM the evil bastard!
                      A+ Certified IT Technician

                      Comment


                      • #12
                        Quoth lordlundar View Post
                        Hmm, odd. You should be able to refuse her ability to run for the position on legal grounds. (she's facing charges of embezzlement after all)
                        We checked with our (new) attorney several times - unless she's been convicted of a felony and hasn't had her rights restored yet she can run.

                        So, we're going political and just showing the other homeowners the books (which they are allowed to see).
                        Quote Dalesys:
                        ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

                        Comment


                        • #13
                          I just got the statement from our insurance company in regards to hurricane Wilma. It's even worse than I thought.
                          Quote Dalesys:
                          ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

                          Comment


                          • #14
                            We just had our elections (the first legitimate one we've had in many years).

                            The people who were on the ballot:
                            Myself (Secretary Treasurer)
                            The current president
                            A new person (the current VP had issues so he couldn't run)
                            The former president

                            18 ballots were cast, 15 could be used (3 were improperly submitted - envelope wasn't signed or had their unit # on it).

                            Out of the 15 ballots with 3 board positions:

                            I got 15 votes
                            The current president got 15 votes
                            The newcomer got 13 votes
                            The former president got ZERO votes (her ballot was one that was improperly submitted but since she's in collections due to overdue fees then she cannot be on the board).

                            The current president is still the president. I'm now the VP (no more bookkeeping!) and the newcomer is secretary-treasurer.

                            The former president showed up 30 minutes late and when asked about the results she was informed, including ballots that were improperly submitted. Since she was late she COULDN'T sign her envelope to make her ballot acceptable.
                            Quote Dalesys:
                            ... as in "Ifn thet dawg comes at me, Ima gonna shutz ma panz!"

                            Comment


                            • #15
                              Sounds like things are on the up and up. Now on to the lawsuit against ex prez. Keep us updated! I'd LOVE to see her raked over the coals for this! Has your lawyer contacted the IRS about the misappropriated funds? I seriously doubt she paid tax on the $ she paid her bills with.
                              The large print giveth, and the small print taketh away.

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