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EMBEZZLEMENT
– AND OTHER SCAMS – ARE MORE COMMON THAN YOU THINK
By
Jan Bergemann
Published
September 12, 2014
Even
if we read in recent weeks more and more about embezzlement in
Florida’s community associations – and watch such reports in
the News – it really doesn’t happen more often than it did
years ago.
Fighting
embezzlement – and other scams – in community associations
has been a priority of CCFJ since many years. In 2007 former
State Representative Julio Robaina created the Pilot Program “HOW
TO CATCH A THIEF!” It was an attempt to minimize
the damages caused by embezzlement, kickbacks and other scams.
Trainings courses for law enforcement officers were held (see VIDEOS),
forms were created and investigations were promised. But after
some enthusiasm in the beginning the interest from the side of
law enforcement quickly faltered. An attempt to add some
forensic auditors to the staff of the Division of Florida
Condominiums, Timeshares, and Mobile Homes, who were supposed to
audit the books of condos if owners filed complaints about
financial mischief, failed miserably -- due to the resistance of
the well-known law firms claiming to represent the interests of
associations. In reality they were eager to protect some of
their clients who had lots to hide.
Since
we realized that law enforcement really didn’t want to get
involved – it’s a “civil matter” is the common excuse,
CCFJ made sure that there would be a safeguard, making sure that
the owners wouldn’t hold the bag for the scumbags taking off
with their money.
In
2013 we added a provision to House Bill 7119 that created 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.
This
provision should make sure that money taken by scumbags will be
replaced by an insurance company – and not by the other owners
who have to come up with money for special assessments.
The
reason for embezzlement, kickbacks and similar scams being so
common is the total lack of enforcement. Even if there is
sufficient suspicion that money has disappeared into wrong
channels, nothing really happens. Law enforcement agencies
refuse to investigate and prosecute these criminal acts – and
the Florida statutes allow these board members to use
association funds to hire attorneys to cover up their mischief.
As
long as there is no strict enforcement – and punishment of the
guilty parties – we will continue to hear about these
embezzlements, kickbacks and scams!
Make
no mistake: Even some normally honest people are easily tempted
to take money if there is no real threat of punishment!
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Jan Bergemann is president of Cyber Citizens For Justice,
Florida
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
community
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associations. He moved to
Florida
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
Tallahassee
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
Florida
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking
in
Florida
!
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