I got proof of money missing where is the law

Started by GaryS9 • 12 replies • 2638 views

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GaryS9 (Texas)
Posts: 3

Posted:

I am a member of a self managed HOA. I used to manage HOA's myself and when I joined this one I should have known better. The Board members are a bunch of control freaks and best buddies with the property manager of 6 years. I started noticing some things and started asking questions and asking for info. My main concern was an audit and when I asked for a copy of the last 2, it got crazy. It took one year and I finally found out they hadn't done one in about 4 years. I live in Texas and law requires one yearly. I started pressuring them and finally got a years worth of bank statements. Nothing but copies and half the checks were missing. I went to the bank and they told me that was not what they would send out at all they had been changed. Checks were covered over with unprocessed checks but the bank due to the fact I wasn't on account could not tell me what the original was. I gathered the board, showed them and was told there had to be a good explanation. I said ya stealing. I demanded somebody go to the bank and get me the real thing or I would get an attorney. They wanted to ask the property manager first but he had a heart attack that night supposedly so they said it will just have to wait. I called the D.A.s office they referred me to Financial crimes division who said they don't do hoa stuff. I tried attorney general and still nothing. Why do they pass these laws and have no way of enforcing them. I really cant afford to hire my own attorney and I know half the board is part of this with the property manager. I have everything right in front of me and its doing no good. The rest of the homeowners are clueless and think I am a trouble maker thanks to the Board. I have been nice and polite the whole time but I am at that point. Where do I turn for help.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Gary,

If you have actual proof (not just circumstantial stuff) of theft and the DA refuses to act, try contacting your representative to the State government. They can make phone calls on your behalf to try and get it looked into.

Failure to do an audit I don't think would be a criminal act.

With electronic deductions, many canceled checks do not get returned anymore. However, and electronic funds transfer would have been identified on the bank statement. Since your a board member, placing you on the account should be a minor thing to do. Typically it just takes someone who is currently on the account to go to the bank with you.

Based on your posting, you are doing the right thing. Just keep being polite and keep moving forward.

Tim

DanS9 (Colorado)
Posts: 23

Posted:

Gary,

Try the Sec of State office. The HOA should be registered with the Sec of State. This is a yearly requirement (at least in Colorado). If I understand the way it works correctly, the Sec of State office should be able to help you.

Dan

JonD1
Posts: 2,350

Posted:

"I have everything right in front of me and its doing no good."

Just what is it that you have? Proving theft.

Poor record keeping by the Board or MC is NOT a crime. I would suggest you get real evidence of "stealing" before you judge the actions of the Board.

There must be some reason why everyone you have contacted has had some reason not to take this matter on.

And you going to the bank demanding the HOA's records while you are NOT a Board member could be seen as you being a trouble maker. As someone who managed such properties you should have known that was neither proper or would be recieved well.

JonD1
Posts: 2,350

Posted:

http://www.sun-sentinel.com/business/realestate/condos/fl-condo-stealing-condocol-1201-20101130,0,7940906.column

From HOATalk home page

SusanW1 (Michigan)
Posts: 5,202

Posted:

Gary - did you ask for a jounal report from whomever is keeping the books?
that should show the check number and who the check is made out to. Then you go back into the minutes and backtrack the approval for the spending. If it's within a budgeted line item, you can ask for an itemized, broken-out report to track exactly how things got spent in each category.

If you suspect something wrong, i.e. someone making out checks to themselves, then you should have receipts to back it up. the bank can also release copies of each check, but there is a charge for that.

If you suspect foul play, then you can do an informal audit by yourself. But it will cost you money, since you ar doing this on your own.

Just because copies of checks aren't there does not mean something's wrong. You will have to dig deeper than that.

GaryS9 (Texas)
Posts: 3

Posted:

The Board president is the one not allowing me access to anything. I tried to get the info for an audit and ended up with the altered statements. I took the statements to the bank to verify them and was told by the bank that the checks in question had not even been processed. I clled the DA they said call financial investigations at police dept. The guy told me there we dont do HOA's his exact words. I called senator Coronas office in Dallas he helped write the TUCA law in Texas and they said get an attorney. I will try the Secretary of State . Thanks For your help
Gary

GaryS9 (Texas)
Posts: 3

Posted:

I have bank statements that have checks that are covered up to conceil the check. There are checks missing that are listed on the ststemant. I took them to the bank and was told that they are not what they send out as bank ststements and that they had been retyped. I was given these statements by the property manager after one year of asking for them because I was going to get my own audit done since they would not. There are check made out to Board President with no receipts or invoices to back them for things like refund for overpaynment of dues and a bank transfer fee refund I ask for proof and got nothing. If you call that a troublemaker than I guess you got me. Since I was in the business I do know what they are doing and that is why I am a troublemaker. I call it theft but for you we will call it misuse of association funds. How is that?

SusanW1 (Michigan)
Posts: 5,202

Posted:

OK - go for it.

JonD1
Posts: 2,350

Posted:

Gary:

Sorry to say what you have provided does not constitute "proof" that something sinister is going on.

You have bank statements with checks covered up? So what does that mean? Were they blacked out on the statement? And this suggests misuse of funds?

The checks made out to the Board President what amount would you be talking about? $50, $100, $1,000,000 which would it be?

Is it possible the President was issues a check for some legitimate reason?

You have concluded that the President is acting in a criminal manner based on what you claim to "know". Along with them the entire Board is implicated by your suggestions someone is stealing and the others are allowing it. And the MC has to crooked because they have gone along with this theft. And surprise they might not be anxious to answer your questions or satisfy your demands.

I don't know for a fact what is going on at your property I do know what you have provided here does not satisfy the claim something criminal is going on.
You need to gather facts and explanations but your relationship with the Board whom you have accused, might make that either difficult or impossible.

DaveH4 (California)
Posts: 16

Posted:

Gary the answer to your question is the Community Association Inistute has lobbied laws about homowner associtions for the last 40 years under the guise that they represented homeowners. The truth is homeowners have no idea who the CAI is now or then and what their agenda is as an organization. I will say, its not to help homeowners. It is to help the vendors, property managers,attorneys and other profiteers that have made a cash cow of the common interets development industery. Don't look for help from state officials. You want something done you hire a lawyer that represents homeowners not associations. Good luck finding one.

SusanW1 (Michigan)
Posts: 5,202

Posted:

If someone is writing bad or fraudulent checks, I would have gone to the local prosecutor and asked for an investigation.(uttering and publishing?)

I wonder why the rest of the board is not as alrarmed as you. Ask for a motion for an audit. That should solve everything. Maybe you can get a court order for one.

NameW (Virginia)
Posts: 74

Posted:

In most states you won't successfully get the local PD 'financial crimes' unit to investigate until you actually locate the check or withdrawal slip that proves a crime actually occurred. They have too many cases where that has been found to spin time (and money) off investigating a case where someone is merely suspicious a crime may have occurred. As someone else said, sloppy records aren't a crime. Your best bet is probably contacting whichever state agency it is that regulates HOAs. Hopefully your state legislature has selected one.

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