Posts Tagged ‘Fiduciary Duty’

Harry Reed Confesses To Embezzling From Texas HOA

December 17, 2012

This is one of those stories that we will hear over and over again, with only minor variations, but it is always worth pointing out the details.

 

Boards must be diligent and pay attention to those expenses.  Here, it was the details that tipped them off:

 

 

The employee said Reed later produced slips of paper with workers’ signatures, but the employee said she and other board members were suspicious about his story. For one thing, the complaint said, some of the cash withdrawals were made outside Texas, and the number of tree removals in the subdivision didn’t match the number of slips of papers he presented.

 

Former Tomball HOA president accused of embezzling $41,664

By Carol Christian
Read the rest, here on the Houston Chronicle site:
http://www.chron.com/news/houston-texas/houston/article/Former-Tomball-HOA-president-accused-of-4097297.php
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Grand Theft HOA: Developer Board President Charged

September 12, 2012

Wow, Florida’s getting an unfair share of  juicy HOA news this week.

This story comes from Central Florida, where apparently people live in nice subdivisions on the everglade swamps between Tampa and Orlando.     

This guy, no Mickey Mouse fraud, was the developer of a homeowners’ association that was not finished before the bust in 2008.  Left an unfinished association and a bunch of empty lots, it appears Mr. Meadows decided to make the most of the situation by “financially exploiting” (per the State Attorney) the homeowners that had already bought in.

Mr. Meadows allegedly set up a rigorous and illegal fine schedule, charging as much as $100 per day for minor infractions.  The association’s funds went to contracted companies that Mr. Meadows owned, and occasionally  to pay unrelated bills like his personal mortgage.  He is charged with misappropriating over $500,000.

Fortunately, the State Attorney’s office got wind of it, and, after four years, has thrown the book at Mr. Meadows.

When a developer controls an Association, either here in Idaho or in Florida, many of the democratic processes and checks-and-balances that normally protect Association Members do not function.  However, owners need to be aware that they still have rights, and that the Association must be run according to state law.  Board members, whether they are elected or not, still owe fiduciary duties to their Association.  They must follow conflict of interest rules, make disclosures, and, at the end of the day, might get dragged off to Court.

Without awareness of homeowner association issues, and with no common interest ownership laws, it would be hard for homeowners to get the attention of prosecuting attorneys here in Idaho.  It would be difficult to find someone like Polk County’s Investigator Stephen R. Menge to dig into the nitty gritty.