http://m.reviewjournal.com/news/las-vegas/new-details-revealed-hoa-fraud-case
What this massive fraud reveals is how vulnerable HOAs and condo associations are to being taken over or manipulated into becoming ATMs for fraudsters. Insurance companies were taken to the cleaners. I haven't even tried to list all the embezzlement cases. I have a notebook three inches thick of press clippings reporting them. Then there were the developer and converter frauds. Here in Chicago at least 200 fraudulent condo conversions shoveled millions of dollars from banks into the pockets of crooks, cost investors a fortune, and victimized hundreds of tenants who were paying rent to somebody who didn't own the building.
And all that criminality is in addition to the non-criminal practices of underfunding reserves that exposes owners to enormous risk, and vendors charging ridiculous fees for doing nothing and locking associations into terrible adhesion contracts.
Why is it so hard to put all this together and reach the obvious conclusion that the money side of CIDs is not working? The media have a frame for reporting on the social control conflicts that happen in associations--flags, pets, political signs, religious symbols--but they can't seem to see the pattern when it comes to the enormous financial problems that leave millions of Americans vulnerable to major economic loss.
It makes no sense to put untrained, uncompensated, and often unqualified volunteers in charge of billions of dollars, based on a bogus ideology of privatism.
1 comment:
Makes no sense to put criminal vendors in charge of HOAs with no oversight, no accountability, insurance paid for by the "client", etc.
If anyone thought that business controls were lacking with Arthur Andersen and similar audit firms last decade, these management companies are like business conflicts on steroids. The same entity that keeps the books also has full control over the banking, insurance, record keeping, "advice" to its client, information flow between the board and other vendors, information flow between the board and homeowners, etc. Maybe, just maybe the CFPB will get involved in regulating HOAs....
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