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Fraud Alert Spotting & Stopping Financial Mismanagement

Given recent headlines, cooperative and condominium associations could be forgiven for thinking they need to put an armed guard and razor wire around the petty cash box. A wave of fraud appears to be hitting properties from New York to Florida and beyond.

In New York last December, a Rockland County treasurer pleaded guilty to taking more than $130,000 from an association and a managing agent last August was ordered to pay more than $628,201 to a Manhattan co-op he allegedly defrauded. A bookkeeper in Maine recently was charged with stealing $30,000 from two different condo associations. In Connecticut, a former business manager—whom police allege had a gambling problem—pleaded not guilty to stealing $226,000 from a condo association in Ledyard, home of an Indian casino. In March, a New Jersey condo association president pleaded guilty to embezzling more than $50,000 from her association, and another business manager in Florida allegedly stole more than $856,000 from five area homeowners associations.

Perhaps the largest case of fraud reported in recent months is that of a New York managing agent, who allegedly siphoned off $1.3 million in property taxes from six co-ops.

The vast majority of all of the folks managing the day-to-day operations of a co-op or condo are honest and dedicated to their tasks. But, as in any line of work, you’ll have a few bad apples who aren’t and who have little compunction about ripping off their building and community. And with the current recession grinding on, and people in all situations finding themselves in financial trouble, some may be more tempted to do wrong. So how do you keep your own building safe? What are some of the hallmarks of fraud, and how can you put a stop to it if it's unearthed in your community?

Crimes of Opportunity

If you’re a board member, there are a number of common types of fraud to be on the lookout for.

Read More...

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7 Comments

  • Our tennants assoc. Has been fighting this exact problem for years. We have recently hired our own lawyer as the corp. lawyer say he reps. the bod of dirs. only. Yet he will do business against the shareholders at the paid Ex.DIR.phone call. By passing all committees and checks. and balances. The tennants are truly exasperated.
  • I suspect that there are some embesselment going on in my condo association. The CPA admitted errors in his 2013 year end review.
  • The owners of our association has put there son as Manager and he does not do what needs to be done and I wonder how to handle this problem. There are only three free standing home and two duplex units. Our association is very small and it all could be handled with the proper manager. What can we do to get this done?
  • I've been a board member for 5 years.. I got elected as treasurer and we had a board president that's been president for several years doing all the boards duties and got reelected again. I was assuming to recover all records from him that has to do with the treasury. He has slowly given me some records because he comes back from work at times really late in the evening... now 5 years later I still don't get all the records from him and he has been doing my job as treasurer and after I told him to stop doing my job at a board meeting he got up and wanted to fight me. So I started to do a forensic audit of our books and found plenty of inappropriate transactions all the way back to 11 years. And as recently as the last four months of 2020 he has written close to $36,000 dollars made out to cash.. I need to know who I can report this problem too
  • I have been living in my coop for the past 34 years 0ct 1988 to date , I saved on my Coop Board during the 1990'S then my spouse got on the board for another few years. Now we have a dysfunctional board of director without a mandate for the past five years the coop lawyer was informed of the first year the president who hijacked the board was to run for another term and she failed to do so, The lawyer brough back and recommend to this dysfunctional board member a management company that was removed for poor service and corrupt practices back to our coop. I have been the main subject of attraction because I will not play ball with the current inept member of the board. We have a coop secretary whom for the past five years has yet to take any minutes of the board meeting and posted such for all to see , they even threatened me with actions of eviction because they are trying to silence me in my own home as the coop board refused to follow the governance of our coop and the coop lawyer knows it.During the pandemic on March 2020 the board had a meeting in which they did not even discussed on how to proceed with the process of making sure the building is kept clean to the maximum, I had to speak to the super to make sure he gets what was needed to protect shareholder in common areas. The agent of the building which was a former doorman in a building was an arrogant little thing that call the police on me living in my home because I asked the man a question he could not answered since he was talking to people inside our coop who are not shareholder nor does he bothered ever to rectify these issues of concerns.Our illegal since she hijacked our coop board hand picked two member to be her cronies securing vote for lack of quorum since she has taken over in 2016. we had one election since and the whole system is upside down thanks to the corporate lawyer who is too busy getting the illegal president on NY cooperator with fake news as she is using people without necessary knowledge to manipulate so she can collect her fee. Under the coop lawyer order they had refused to accept my maintenance last year they stop accepting my maintenance and then I hired an attorney, after few months they did accepted my maintenance check which is automatically don by my bank, then one month later they stopped again I am not in arrear has never been, they are playing politics and I am paying a lawyer which I want the Court to make me whole for the coop malicious intent of deceptive practices due to their failure to follow the coop bylaw as it is written ,now they are hoping for the NY State legislature to keep making changes to save their derriere ,the BCL is still the BCL contacting the Attorney general is another politic BS no one is able to help but the politician want people to vote for them while we are paying taxes as the criminal get away with murder time after time. The District Attorney Office has been contacted and waiting to hear from them ,Government do very little for the small people whom they expect to vote to be or remain in office but always give us the deaf ear.Before NY cooperator and NY Times wrote articles about bad leader in Coop they need to hear the full story on what they wrote, what about the other side they kept in the dark. during the pandemic the coop board and management had construction done in a small meeting room and to date no one ever explained how much it cost our coop too get that done in the dark we have no ideas of what is going on with or reserved yet the coop illegal president is on NY TIMES talking fake news.The leadership of my coop is like the Trump Presidency if not worse.We have illegal shareholder in our building and the board is silent one of the member of the call the illegal president to discuss about and illegal tenant six months ago she is waiting for her response ,what a shame!
  • remember I said ealier the managing agent working in our building was a doc man before becoming a building agent a job that was too much of this guy, Yet the coop illegal president accept him anyway to manage our building affairs like she did with the previous management company. what tis agent did was beyond the norm calling the police on me in these day as a black man living in my home, this could have end up any which way since NYPD have the best police officer in the nation they did not take the bait instead they were very professional and told me to stay away from this malicious guy. Just for asking this fool a simple question and the coop Board and their lawyer never condone his action, I stand for fairness to all but politic is more important for this coop board today. During the board search for management one of word other board member describe to me was the coop illegal president asked questions on whether management can handle certain shareholder behavior this was a low blow when this illegal has never participated inane annual meeting of the past therefore she had no ideas how coop board function and how shareholder have rights that a corrupt board cannot take away. ignorance is not an excuse. need to read the shareholder right and how to remain vigilant about management spending of our resources. In our coop today the illegal President and its vice president only sat down to discuss the coop bills where is the coop treasurer who need to do his duty they have no clue about their fiduciary duty they run the co-op like a bodega store. Neither one the illegal president or the illegal Vice president who told me he was no longer a member of the board since his term expired last year but still making decisions affecting our coop financially .Where are the other members who were elected to represent our investment ,where and who is the coop treasurer? I have been calling for an election for the past 5years and the coop lawyer refused to let the coop have an election are we in the Soviet Union or Iran.
  • This is the sign of a corrupt board member I suggest you contact the District Attorney office of your City economic crime bureau which has a new name now, with your documents on hand they will look into this matter give them copies, keep pursuing this president ,The late District attorney in manhattan few years went after coop management companies, board member and super including the vendors many went to jail and still to this date they are still doing the something when corruption make more sense than the shareholder value interest this is where you got to go. I was a my coop treasurer in the 1990 when I discovered fraud in my coop it was fight the president then was forced to resign and then she had 4 member of the board resign together with her that lady was a crook but in America fraud a is part of the business for some folks and these people some of them does not work they only relied on the coop funds to support their bad behavior.When you are active and seeking the truth on how the coop money is being spent you become the target of these monsters I am going thru that now as we speak ,my coop by law have been violating by this coop board with no election for the past 5 years they do things for each other on the board they never had a quorum but still have meeting and no minutes taken. They tried to use the Pandemic as an excuse for not have meeting or election yet we go out and vote for Mayor governor president and other government post . Corruption is a disease that must be eradicated but is part of the system ,if you steal,lie and Bs other people they gave you respect ,as we can see today people goes to jail once they hit the street they have them in our living room as they have no shame , so for some people crime pay it is good to commit fraud and being corrupt because the people enforcing the law does not care coop is for small people the government is looking for the billion dollars fraud million is to small as coop is in the million business standard.And we get hit hard for taxes. Also go to your community Board meeting to discuss these issues of concerns if they don't play politic you might get some assistance from them also.BUT the District Attorney economic Crime Bureau id the key they will look at it.