Maintenance uses HOA Home Depot Credit Card to purchase personal items.

Started by GileaH2 • 30 replies • 1452 views

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GileaH2 (California)
Posts: 38

Posted:

After requesting Home Depot invoices I discovered our maintenance employee had used the associations credit card (Home Depot) to purchase thousands of dollars in personal items. His name was on the account to use the card but certainly not for person items. He has since quit his job. He had been employed with us for the past 10 years (per civil code was only able to get current year and two previous years of invoices) I have a feeling it's much more than $4-5 thousand dollars. I have informed the Board and there attitude is "well he no longer works for us". What is the Boards responsibility? I believe they are in breach of there fiduciary duties since they were not monitoring the purchases made on the associations credit card?

SueW6 (Michigan)
Posts: 814

Posted:

You are right: the board should have been watching those bills, insisting on seeing all itemized purchases.

Where was your treasurer? Management company?

RichardP13 (California)
Posts: 3,868

Posted:

The guilty party is the management company and its manager who is no longer with the company either.

GileaH2 (California)
Posts: 38

Posted:

,SueW6, Good question, "where was the treasure and Management company"?. Probably one of the most incompetent Boards. I have request and seen all itemized invoices but only till 1/1/2014. Maintenance employee was here 10 years. I would say the purchases of personal items, over the past 10 years, is closer to $60K.

RichardP13, you're right manger is no longer with the company but I would think the owner of the PM is still liable as well as the BOD. THE BOD's duty is to manage and maintain. Since they have failed to manage the purchases by an employee they have breached there fiduciary duties.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GileaH2 on 09/11/2016 9:28 PM
,SueW6, Good question, "where was the treasure and Management company"?. Probably one of the most incompetent Boards. I have request and seen all itemized invoices but only till 1/1/2014. Maintenance employee was here 10 years. I would say the purchases of personal items, over the past 10 years, is closer to $60K.

RichardP13, you're right manger is no longer with the company but I would think the owner of the PM is still liable as well as the BOD. THE BOD's duty is to manage and maintain. Since they have failed to manage the purchases by an employee they have breached there fiduciary duties.

Based on my review of the financials for which I have access, its worst that you think. The law firm who owns the MC created his contract. Yes, the owner of the law firm is really the responsible party, IMO.

SueW6 (Michigan)
Posts: 814

Posted:

No, ultimately, it was your treasurer's job to oversee and validate these bills.

Wrong doing would have been evident when looking at actual expenditures vs. budget every month.

How did this guy get away with this all this time?

GileaH2 (California)
Posts: 38

Posted:

RichardP13, Can you expand upon "worst than you think"? And yes, MC did create our contract. Where can we go from here?

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GileaH2 on 09/12/2016 7:48 AM
RichardP13, Can you expand upon "worst than you think"? And yes, MC did create our contract. Where can we go from here?

The Board would need to take action, which they won't.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Are we sure the person did not pay for the items? We would sometimes submit receipts for items that were for the HOA but had personal items on them as well. However, we would cross them out and just add up the total for HOA items. Sometimes when shopping it was hard to have the clerk to separate the items for various reasons. (Timing, crowds, or miscommunication etc...) I would want to see the receipts that really proves these items were reimbursed or paid for before jumping to conclusion.

A Home Depot card how does one know what was personal item and what was not? Just curious. I don't buy a whole lot of "Personal items" at Home Depot. It would take an examination of the work versus non-work projects. Like buying plumbers putty and there's no plumbing jobs. That I can see may come across as "Personal".

We had a con-artist rip off artist doing the maintenance in our HOA. He was the ex-president and some people trusted him. However, I knew much better. Believe me I went over EVERY receipt or bid he submitted. Caught him on quite a few things. So I know a few things about monitoring such accounts.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MelissaP1 on 09/12/2016 10:01 AM
Are we sure the person did not pay for the items? We would sometimes submit receipts for items that were for the HOA but had personal items on them as well. However, we would cross them out and just add up the total for HOA items. Sometimes when shopping it was hard to have the clerk to separate the items for various reasons. (Timing, crowds, or miscommunication etc...) I would want to see the receipts that really proves these items were reimbursed or paid for before jumping to conclusion.

A Home Depot card how does one know what was personal item and what was not? Just curious. I don't buy a whole lot of "Personal items" at Home Depot. It would take an examination of the work versus non-work projects. Like buying plumbers putty and there's no plumbing jobs. That I can see may come across as "Personal".

We had a con-artist rip off artist doing the maintenance in our HOA. He was the ex-president and some people trusted him. However, I knew much better. Believe me I went over EVERY receipt or bid he submitted. Caught him on quite a few things. So I know a few things about monitoring such accounts.

Melissa,

Are you serious?

Under what circumstances would the maintenance individual be making "personal" purchases using the Home Depot card in the NAME of the Association.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Gilea,

First, a letter to the MC (if involved) and the maintenance person demanding repayment by mm/dd/yyyy or a police report will be filed should be sent.

Actually, in second thought, the Association should simply file a police report. With the report, you may be able to obtain past years bills (as it is now a criminal issue).

I would also consider raising support and replacing your Board as it appears that they and the MC fell asleep on their watch. Combined with the attitude of not wanting to try and collect embezzled amounts, they should be removed.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By GileaH2 on 09/11/2016 8:24 PM
After requesting Home Depot invoices I discovered our maintenance employee had used the associations credit card (Home Depot) to purchase thousands of dollars in personal items. His name was on the account to use the card but certainly not for person items. He has since quit his job. He had been employed with us for the past 10 years (per civil code was only able to get current year and two previous years of invoices) I have a feeling it's much more than $4-5 thousand dollars. I have informed the Board and there attitude is "well he no longer works for us". What is the Boards responsibility? I believe they are in breach of there fiduciary duties since they were not monitoring the purchases made on the associations credit card?

I have to wonder just who did this maintenance person work for? The HOA a as an employee? The MC as an employee?

I also have to wonder whose name the card was in? the HOA's or the MC's?

Sounds like the board has their head up their _______ no matter what the amount. In the least I would consider filing criminal charges for theft with the police. I would then seek an answer as to whether this might be covered under your master insurance policy it this person was an HOA employee.

I would then send a notice to every property owner explaining your allegations and the board's do nothing response. Which if necessary would serve as reason for their removal.

Sounds like the Treasurer, whoever was processing invoices, whoever was overseeing maintenance, whoever saw these amounts of bills and never asked what was being done for this amount of money all fell asleep at the wheel, or perhaps were involved.

Time to raise some HELL!

JonD1
Posts: 2,350

Posted:

Rather than filing a complaint with the police Imwoukd contact your local DA's office and file a criminal complaint with them. They can investigate your findings and obtain additional records to build a case.

Restitution would be part of the goal my view going to jail if true would be also necessary.

I would also include the MC and Board as possible participants.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

My advice is to make sure the person did not pay those items back or were paid for by the HOA. It's part of the PROOF against the maintenance person. Just because it's on the bill does not mean the HOA paid for it. Is there any receipts that prove ALL the costs on the bill were paid by the HOA? Proof they are "Personal" items? What makes them "Personal" items? I am not seeing any actual proof just like the court will want to see. The court can ONLY make one WHOLE. So if this person bought items to change car oil and the HOA owns no car or lawnmower, then I would lean toward "Personal".

Basically, just asking for more definition than just a credit bill from Home Depot as proof the employee used it personally. I can't tell from that statement alone that happened. We have a Sam's club card. The clubhouse committee had the right to buy paper towels, toilet paper, cleaning materials, light bulbs, and other related items. How can I tell if someone took home a roll of towels or toilet paper? They had carte blanche for such items that would be part of the normal operations of our clubhouse. Issues such as repairs or plumbing issues were evaluated separately.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MelissaP1 on 09/12/2016 11:19 AM
My advice is to make sure the person did not pay those items back or were paid for by the HOA. It's part of the PROOF against the maintenance person. Just because it's on the bill does not mean the HOA paid for it. Is there any receipts that prove ALL the costs on the bill were paid by the HOA? Proof they are "Personal" items? What makes them "Personal" items? I am not seeing any actual proof just like the court will want to see. The court can ONLY make one WHOLE. So if this person bought items to change car oil and the HOA owns no car or lawnmower, then I would lean toward "Personal".

Basically, just asking for more definition than just a credit bill from Home Depot as proof the employee used it personally. I can't tell from that statement alone that happened. We have a Sam's club card. The clubhouse committee had the right to buy paper towels, toilet paper, cleaning materials, light bulbs, and other related items. How can I tell if someone took home a roll of towels or toilet paper? They had carte blanche for such items that would be part of the normal operations of our clubhouse. Issues such as repairs or plumbing issues were evaluated separately.

They didn't repay.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By TimB4 on 09/12/2016 10:36 AM
Gilea,

First, a letter to the MC (if involved) and the maintenance person demanding repayment by mm/dd/yyyy or a police report will be filed should be sent.

Actually, in second thought, the Association should simply file a police report. With the report, you may be able to obtain past years bills (as it is now a criminal issue).

I would also consider raising support and replacing your Board as it appears that they and the MC fell asleep on their watch. Combined with the attitude of not wanting to try and collect embezzled amounts, they should be removed.

"Falling asleep"..I think you hit the nail on the head, if you catch my drift.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That begs to define the relationship of the Maintenance person to the HOA. Who was the boss of that maintenance worker? Was it the HOA or was it the MC/PM? Did the HOA provide a 1099 contract to the maintenance worker? Was there a contract? Where are copies of the receipts for the work the maintenance did?

The HOA use of it's Home Depot Credit card or other such cards should be evaluated as a whole in the future. We never gave out our credit card except for approved prior use. If it wasn't approved first, then the card was NOT used.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MelissaP1 on 09/12/2016 11:39 AM
That begs to define the relationship of the Maintenance person to the HOA. Who was the boss of that maintenance worker? Was it the HOA or was it the MC/PM? Did the HOA provide a 1099 contract to the maintenance worker? Was there a contract? Where are copies of the receipts for the work the maintenance did?

The HOA use of it's Home Depot Credit card or other such cards should be evaluated as a whole in the future. We never gave out our credit card except for approved prior use. If it wasn't approved first, then the card was NOT used.

For the record, I used to work for that MC, which is owned by a attorney who drew up the contract. He was an employee of the HOA, supervised by the PM who had an ongoing relationship with him.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Okay... So PROVE the charges were personal... I am NOT defending the maintenance guy. I am trying to advise if your going to want to get the money back there has to be PROOF the money was personal use. The HOA paying for the Home Depot bill isn't enough.

Former HOA President

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By MelissaP1 on 09/12/2016 11:57 AM
Okay... So PROVE the charges were personal... I am NOT defending the maintenance guy. I am trying to advise if your going to want to get the money back there has to be PROOF the money was personal use. The HOA paying for the Home Depot bill isn't enough.

If the maintenance worker did not supply the receipts to the HOA with sufficient justification for the purchases, then I think it would be up to the worker to PROVE the charges were valid.

Escaped former treasurer and director of a self managed association.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It is up to the HOA to prove it IF they were to sue the maintenance worker. The defense of the maintenance worker would then be to produce receipts/approvals. The HOA has to provide evidence the expenses were personal or not approved. Again a Home Depot Credit card BILL is NOT proof. Proof is that the maintenance person did not have authority to use the card for the expenses on that bill. The HOA would need to show which expenses on that bill they consider not approved. In our case, it shows in our meeting notes. It would also show up in the bid or bill of the contractor. Who wouldn't have access to our credit card anyway unless that was part of the deal.

I don't say this person may not have taken advanatage of use of this card. The HOA has to prove it was abused. They can't if they have a procedure of which maintenance can use the card carte blanche. How they going to prove it?

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Sorry Melissa, he was an employee of the Association. He was the one that is required to provide proof that ALL the expenditures were for association repairs, NOT the other way around.

GileaH2 (California)
Posts: 38

Posted:

Melissap1...RichardP13 is correct these were items purchased for personal use i.e laundry detergent, garden pebbles, bamboo fencing,garden stacks, interior room dividers, chrome soap dish, citronella candles, hanging baskets..flat panel t.v mounts...etc.. literally thousands of dollars in 2 years. Items that would NEVER be used for the HOA. He was an employee, our only employee at the time. He was on our commercial Home-Depot account for purchases. The BOD's refuse to take legal action. To make things worse he has moved out of state. To top it off thousand of dollars of power tools have no gone missing after he quit. Yes, it impossible to pin the missing tools on him, but certainly it's a heck of a coincident. Only person with keys to our maintenance garages.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Richard again... The COURT needs to have proof from the HOA to show that the worker purchased items NOT approved. The worker in COURT would need to prove their DEFENSE they had approval or they were used for HOA use.

This sounds like time for the HOA to move on and make sure this never happens again. The procedure of how this could happen needs to be revisited and revised. How would the HOA prove it's damages in court? Maybe the HOA should keep the card under their control and have the maintenance person submit a list? That way the board has the card and there is documentation of what the HOA purchased with approval. Otherwise, how else is your HOA going to prove the expenses weren't of HOA use?

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MelissaP1 on 09/12/2016 2:47 PM
Richard again... The COURT needs to have proof from the HOA to show that the worker purchased items NOT approved. The worker in COURT would need to prove their DEFENSE they had approval or they were used for HOA use.

This sounds like time for the HOA to move on and make sure this never happens again. The procedure of how this could happen needs to be revisited and revised. How would the HOA prove it's damages in court? Maybe the HOA should keep the card under their control and have the maintenance person submit a list? That way the board has the card and there is documentation of what the HOA purchased with approval. Otherwise, how else is your HOA going to prove the expenses weren't of HOA use?

YOU ARE WRONG!!!!!

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GileaH2 on 09/12/2016 2:41 PM
Melissap1...RichardP13 is correct these were items purchased for personal use i.e laundry detergent, garden pebbles, bamboo fencing,garden stacks, interior room dividers, chrome soap dish, citronella candles, hanging baskets..flat panel t.v mounts...etc.. literally thousands of dollars in 2 years. Items that would NEVER be used for the HOA. He was an employee, our only employee at the time. He was on our commercial Home-Depot account for purchases. The BOD's refuse to take legal action. To make things worse he has moved out of state. To top it off thousand of dollars of power tools have no gone missing after he quit. Yes, it impossible to pin the missing tools on him, but certainly it's a heck of a coincident. Only person with keys to our maintenance garages.

Gilea

I have your address and will put on CD everything I have and mail it to you.

Good Luck

GileaH2 (California)
Posts: 38

Posted:

MelissaP1,
I am not sure how the HOA can keep the card under there control and maintenance submit a list? You mean to tell me if he's "maintenance" is in the middle of a work-order and needs something last minute he's going to write up a list send it to the board for approval? Seems a bit ridiculous. The only time approval from the BOD was need was when any individual item purchased was over $500. The Treasure and Management should have been monitoring the purchases on a monthly basis. Checks and balances!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I learned my lesson with our maintenance guy. He had to submit a bid for his work. If he ran over, then yes we did discuss prior to him getting anything more. He was always going over and ripping people off. So it was necessary to keep a close eye on him.

Former HOA President

GileaH2 (California)
Posts: 38

Posted:

RichardP13,
Thank you, any and all help is greatly appreciated.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By GileaH2 on 09/12/2016 4:53 PM
RichardP13,
Thank you, any and all help is greatly appreciated.

I will put it in the mail tomorrow.

GileaH2 (California)
Posts: 38

Posted:

RichardP13,
Any chance you've put CD to mail, still waiting. Would really be interested in seeing those financials.

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