A condo owner who served 15 years on the board was arrested and accused of stealing millions of dollars of monthly maintenance fees and diverting them for personal use. The accused served as President for some years, and even President and Treasurer during other years. At one point, he was the only signer on the association’s bank account and the holder of the only checking card linked to another bank account for the condo. The second association account actually had the person’s name on it. He made almost $19,000 in ATM withdrawals on the account.
Where were the other board members? What were the owners thinking during the 15 years of thievery? Probably not much. The thief will obviously have to pay, likely in jail, but so will the other owners who may be unable to recover the stolen funds.
The trouble with many associations like this one, the Marquis Villas-II Condominium Association, is that there is no oversight in place. Not many people want to serve as board members because of the time commitment, and owners are sometimes just interested in common charges not increasing and enjoying their homes. While board members and owners sit complacent, without oversight, unscrupulous people insert themselves in positions of power and take advantage of their neighbors.
A tremendous red flag is the association’s bank accounts. One person should never be named on the bank accounts as a signer and certainly shouldn’t be able to withdraw from ATM’s without written authorization. Board members should have been looking at the bank statements on a monthly basis and if the association was professionally managed, the management company should have been on top of this, recommending and placing preventative measures in place. In this particular case, the accused was fraudulently creating business records, like invoices for $7,000 in light bulbs and fixtures that were never installed, or the painting, sidewalk replacement, and landscaping that never happened over the years. Annual accounting reports by an independent accountant might have shown the entries, but the accountant doesn’t typically audit those numbers. The owners, however, could have shown up at the board or at least the annual meeting and asked the right questions about the operational costs for operations that never happened.
There will be a lot of finger-pointing and lawyering in that condo association over the next year. Hopefully, there is some insurance that covers the losses, or the criminal still has some of the money that he stole for retribution, but their experience should serve as a lesson for other condo boards and owners that oversight is important in their own communities. Here is the article for more information.
