mismanaging hoa money

Started by RobynK • 12 replies • 1453 views

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RobynK
Posts: 1

Posted:

I am up in arms over some board members putting our community money in their pockets. We had someone turning in hand wriiten receipts for reimbersement to himself, his son and his wife, None of which are backed up by actual business receipts. He has charged the community for bogus charges and received thousands of dolloars for this. Our current board now knows what he was doing but does not want to pursue legal charges. I think he (was treasurer) and the person who signed these checks with him should be at least exposed to the entire community. It took me over a year to get someone to look into what he was doing and he has since left the board but the other person is still sitting as president. I would like to know if other HOAs have had this happen? If so what did you do? Also how do others feel about this? Robyn

BradP (Kansas)
Posts: 2,640

Posted:

Robyn:

Haven't had it happen to us, but I would contact police first of all and let them invesitgate a case of embezzlement. Then I would work with the board to get stricter controls on the money.

EllenS1 (Florida)
Posts: 1,148

Posted:

Our MC has the authority to spend up to $500 whic can be used for emergencies or reimbursements. At our last meeting we authorized the pres of use up to $750 so a board meeting would not have to be called whenever something minor needs to be taken care of. Receipts must be furnished before a check is cut.

IreneC (North Carolina)
Posts: 111

Posted:

For the love of god... you can contact an atty yourself. You dont' need the backing of the board. If they don't want to pursue legal action then sue them too.
Fiduciary mismanagment is not just an entire board issue, but those who knowingly approve of it. No action states they approve.

Call an atty. If all is as you say. You have a case..

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Robyn,

Lemme get this straight.

The Board knows about these (possibly) questionable activities but would prefer to let it pass?

My advice: Put together a coalition of concerned HOs, oust the Board and put yourselves in. Note: I assume you are not a Board member.

Brad,

I don't think embezzlement is present nor provable, as there are some manner of receipts existent, and have apparently been OKd by the Board. Beyond that, would you really recommend (or would you, individually) really contact law enforcement (police, prosecutors, etc.) with all of the potential, personal aftermath that might entail for you? If so, you're a braver man than I.

My advice: I sure wouldn't. Maybe consider an attorney with an expertise in civil (as opposed to criminal) collection matters to look into/pursue possibilities? Sure. But again, if Robyn's Board is reticent, or compliant, what's the debatable issue?

BradP (Kansas)
Posts: 2,640

Posted:

John:

reread what Robyn posted...if they are turning in hand written receipts without an actual business receipt what would you call that? So I could turn in a receipt to my board for $500 for mulch for a flower bed and even though I have no receipt to prove it I can get reimbursed? Sign me up!!! Where I work if we are to get reimbursed for somethign we must show a store receipt or a credit card statement proving purchase.

Maybe it isn't embezzlement, perhaps a better word is theft, but if a board member is taking money from an HOA account then it is embezzlement, no two ways around it.

And yes, I would contact police and I would tell them that something suspicious is happening and let them do their investigation. If he is innocent then he has nothing to worry about.

Putting your blinders on will not make the problem go away, it will only make it worse.

I don't agree with exposing them to the community until they are proven guilty, but there is nothing wrong with asking the police to investigate if they are willing to do so.

IreneC (North Carolina)
Posts: 111

Posted:

Seriously, the police may only take a report. That is all. They don't investigate this type of case but they will take only a report.

You need an atty. You may HO's invovled ot oust the current board but that will take alot of effort and you must support your concerns with the HO's there for possibly exposing your suspicions. You as a homeowner have concerns that are valid. Call a local HOA atty..... that is really your only hope. You can have other HO's also follow suit with legal action for mismanagement of hoa funds.. and each individual can be sued for knowingly approving such.

BradP (Kansas)
Posts: 2,640

Posted:

If there is actually theft going on the police will do more than take a report, there has to be a complaint filed first...

Why sue and spend more money, get them prosecuted and ordered to pay restitution. I do agree you should consult your attorney.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Brad,

I'm arguing the micro sides and strategies, not the big picture. Let's agree if some manner of defalcation is present, then yes, something could - probably should - be done about it.

HOW is what I'm questioning and commenting on.

Right now we have one side of the story, Robyn's POV. More details could help suss the situation, yes?

BradP (Kansas)
Posts: 2,640

Posted:

John:

I agree we have one side of the story...however, I am answering Robyn's question. If what she has reported to us is true then just replacing the board is not enough...

IreneC (North Carolina)
Posts: 111

Posted:

None the less, legal action of some sort must be done. Your HOA atty would be most helpful in assisting you in your decision making.

GlenL (Ohio)
Posts: 5,491

Posted:

Robyn we had a treasurer that played a little loose with the petty cash account; couldn't provide store receipts, made purchases that were not approved by the BOD etc. We called a special meeting with him to discus the matter and for him to provide proof. For everything he couldn't prove we gave him the option of making reparations or we would contact the prosecutor's office and file a complaint for theft. He wrote several large checks that night and agreed not to run for the BOD again.

Studies show that 5 out of 4 people have problems with fractions

SusanW1 (Michigan)
Posts: 5,202

Posted:

Robyn - unfortunately, after all this time, you may have a difficult time proving intent or even downright fraud. The "receipts" were accepted and paid according to the procedures, so how are you going to prove "fraud"? Especially if it was for services. The Board can only say that it did what it thought was correct at the time. Not deliberate wrongdoing on their part.

The problem was with the PROCEDURE (or lack of one) for paying reimbursements or invoices.(Any judge will tell you that)

After this, submitted invoices should be signed by 2 board members witnessing the work having been done, or the goods delivered - then given to the treasurer for payment.

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