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BRIBES,
KICKBACKS AND/OR EMBEZZLEMENT OF FUNDS!
By
Jan Bergemann
Published
May 17, 2013
Believe
me, EMBEZZLEMENT of
funds is a really hot issue and actually happens more often than
you think. You may ask: What are the main reasons that it
happens so often? People know that there is very little
punishment – if there is punishment at all. Rob a bank, steal
$20,000 – and you will serve quite a few years in jail if
caught. Steal $1.4 million from a condominium association –
and six years after you were initially arrested there was still
no trial. See the infamous
Parker
Plaza
case: “Two
co-defendants face trial in March, more than six years after
arrests.”
There
is a long list of big cases that made the headlines of the local
newspapers
[http://www.ccfjfoundation.net/SCAM/SCAMSUCCESS.htm],
but most of the cases never see the light of the day. Many
complaints are just being dropped in exchange for reimbursement
of embezzled funds.
In
other cases board members are trying to cover up the misdeeds,
claiming that publicity would decrease property values.
Actually, I think it’s rather the opposite. Catching the bad
guys means somebody is watching the bank!
BRIBES
are another way to get rich quick. It seems attorneys and
contractors are willing to grease the palms of board members. It
goes even that far that these service providers are using
illegal methods to get the “right” people elected to
the board. Remember the Las Vegas HOA fraud case? (Click
here to read the details). I am pretty sure it
happens here in
Florida
as well. Quite a few of the folks involved in the Nevada fraud
scheme fled to Florida when the FBI started the still ongoing
investigation and are now working here – in Fraud Friendly Florida.
And
what about KICKBACKS?
Community associations are plainly inviting kickbacks! We are
not necessarily talking money changing hands. Much more often
it’s about providing free services for the board members, from
the landscaper providing free landscaping for the president’s
property to the pool guy servicing the community association
pool – and servicing the board member’s private pool as
well. Actually, the list of opportunities for kickbacks is
endless.
And
in most of these cases the owner were holding the bag, meaning
that the owners had to fill the holes caused by the financial
losses caused by these criminal acts!
And
since owners are already paying dearly for the mistakes of banks
– protected against liability by the so-called “Safe Harbor” provisions – we thought it would be a good idea
to make sure the homeowners’ associations is protected against
these kinds of financial losses and we made sure that this
provision was added to the HOA
REFORM BILL H7119:
FS 720.3033(5)
The association shall
maintain insurance or a fidelity bond for all persons who
control or disburse funds of the association. The insurance
policy or fidelity bond must cover the maximum funds that will
be in the custody of the association or its management agent at
any one time. As used in this subsection, the term "persons
who control or disburse funds of the association" includes,
but is not limited to, persons authorized to sign checks on
behalf of the association, and the president, secretary, and
treasurer of the association. The association shall bear the
cost of any insurance or bond. If annually approved by a
majority of the voting interests present at a properly called
meeting of the association, an association may waive the
requirement of obtaining an insurance policy or fidelity bond
for all persons who control or disburse funds of the
association.
It’s
high time to protect the owners against financial losses. Most
owners really didn’t move into
Florida
’s community associations to pay their neighbors bills, make
up for the losses caused by unpaid dues/foreclosures and a
multitude of criminal acts that plague our associations.
Oh,
by the way, let’s finally prosecute the bad guys –within a
reasonable time frame. Let’s not postpone the trials until the
perpetrators are dead or too old to stand trial. The statements
we heard from law enforcement agencies and state attorney’s
offices claiming that these are not criminal acts but civil
contract issues are straight out “BALONEY.” I’m still looking for the contract that states
that the folks in charge of the finances can steal the money
without being prosecuted. Theft is theft – inside or outside
of community associations!
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