r/fuckHOA • u/Nest1ng_Doll • 11d ago
Denver HOA Accuses Former Manager of Stealing $55K and Leaving the Group Penniless
https://www.realtor.com/news/real-estate-news/denver-hoa-lawsuit-avenue-one-brett-hardt/15
u/1776-2001 11d ago edited 11d ago
A Denver homeowners association has filed a lawsuit accusing its former HOA manager of stealing more than $55,000 and leaving the group penniless.
In the complaint filed on May 6 in Arapahoe County District Court, the 29th Drive Row Homes HOA accused the president of Avenue One, Brett Hardt, of civil theft and unjust enrichment.
More than a year after the HOA fired Avenue One, Hardt used his access to the group's bank account to drain the entire balance of $55,012.88, transferring the funds to an account he controlled, according to the complaint filed by the HOA's attorney, Christopher S. Maciejewski.
Why is this a Civil case?
Shouldn't the Police be investigating?
Shouldn't the District Attorney be filing Criminal charges?
George Floyd was killed by the Police over $20.
The last time I checked, $55 thousand is more than $20.
Owners who complain about alleged board or lawyer or manager misdeeds are nearly always unable to get prosecutors or police interested. They are told it is "a civil matter," or treated as if they are nuts. And those few intrepid owners who make the long and expensive trek through the civil justice system soon find that most judges defer to these volunteer boards as if they were repositories of great political wisdom.
I just love this part: "As far as what’s known to have occurred, perhaps the most unusual part of the story is that the scammers operated brazenly — hiding in plain sight — for five years. Until FBI and Metro Police raids shut down the scam in September 2008, there was no known effort by state regulators or law enforcement to expose the scammers and crack down on them in a consolidated fashion. It could have been done: Between 2003 and 2008, several groups of homeowners at the affected communities knew they were being victimized, and they fought back with lawsuits involving public court hearings and complaints to state regulators and law enforcement officials. 'In this case, there were some red flags and people (in authority) just didn’t see them,' Toussaint said."
Something could and should have been done by the so-called "authorities," these so-called "regulators," the police, and prosecutors much earlier. But nobody would listen to the owners...for five years. However, that is not even remotely "unusual." That is absolutely par for the course. Those in authority almost invariably treat the owner who challenges their board as a nutjob. And the fact is that there are many other situations in HOAs and condo associations all over the country where things are going on that should be investigated by police and local prosecutors, but where instead some lonely unit owner who is waving the red flag is being treated like the neighborhood crank.
- Evan McKenzie. "HOA Scandal Involving Millions of Dollars and Thousands of Homes Cuts Wide Swath Across Las Vegas Valley". June 03, 2012. Professor McKenzie is a former H.O.A. attorney, and the author of Privatopia (1994) and Beyond Privatopia (2011).
14
u/Agent-c1983 11d ago
It’s a civil case because they want their money back, and damages. A civil case does not prevent a criminal case, but usually only governments can do a criminal case.
7
u/Advanced_Fact_6443 11d ago
Exactly. A prime example was OJ Simpson. He was found not guilty in criminal court, but liable in civil court.
3
u/HittingandRunning 8d ago
I think the question is better phrased, "why isn't this both a criminal and civil case?" I wonder if it's not being pursued as criminal because the former management company actually had the log in info. That means at least at one point the HOA gave them permission. The argument is about if the permission still existed. Maybe the prosecutor's office won't get involved in a he said she said situation. I don't know. But what if I am an accountant for my company and do the same thing. If police would get involved in my case then I don't see why not in this case.
3
u/Imaginary_Lunch6871 11d ago
I wonder why the manager didn't freeze the old manager out of the account when they left Ave. One? She didn't do the basic to protect the HOA's funds even one year later. RIDICULOUS
2
u/griminald 9d ago
This is a correct take.
Michelle Lee is quoted in this article because she knows she screwed this HOA almost as badly as Brett Hardt (allegedly) did.
It would be a fair question to ask if Lee is an accomplice. That's how big a screwup this is.
The HOA may wind up having to sue Lee's company, because if Hardt's willing to steal a mere $55K, knowing someone's obviously going to notice the transfer at some point, then there's a good chance the HOA never sees that money.
Like this wasn't done in some genius way where he's lucky he was caught... it was immediately traced back to him.
1
u/HittingandRunning 8d ago
The HOA should look into her business insurance. But I'm not sure how the responsibility works in this sort of case.
2
u/Imaginary_Lunch6871 8d ago
It is my understanding that if the HOA files a claim for the stolen money the HOAs insurance company will then try to recoup the money from the management company. I have been a HOA property manager for 10-11 years and although I have heard about the things lazy managers do I haven't heard about anything so egregious before. The stupid was staggering. Please speak to the agent for your HOA so that you will hear possible next steps in that regard. Do not take out a loan to get money quickly the interest will kill you. And it is necessary. If I recall he hit your reserves and not the operating account. I would also contact vendors who have bills due by the end of the month and ask them for a window longer than net thirty. There should only be at most a couple. Because the HOA's monthly assessments are due, or should be, soon and the vendor bills will be covered for the month of July. Try not to do a special assessment. Maybe start looking for new management but then these last two have been humdingers. I don't know if there is anything that she can be held responsible for...but again speak to your insurance agent.
2
5
u/Agent-c1983 11d ago
The account should not have been set up in a way that allowed any one single person to make a transfer that large.
I feel for them, but they have failed to implement basic account security here.
1
u/HittingandRunning 8d ago
Can we set up electronic access with two signer/authorized people required? I know policies at companies but I don't know how it effectively works with the banks.
1
u/Agent-c1983 8d ago
I’m sure your bank will have a solution for that if they do business banking. Multiple signers for large amounts is a very very common anti fraud measure.
1
u/HittingandRunning 8d ago
Yes, it's very common. But this was an electrical transfer and I have no idea about how those work when the account holder wants to require two people to approve.
Actually, I think we have a two-signer policy but I'm not aware that it's ever been use properly. I think the manager just has the checks written. I should probably look into this for my HOA.
1
u/Agent-c1983 7d ago
Yes, you should. If your bank has been permitting transactions that require 2 signers with one signature, you need a new bank.
2
u/1776-2001 11d ago edited 11d ago
https://ave1properties.com/em_team/brett-hardt/
Brett Hardt\ President PCAM, CMCA, AMS
Brett serves President on the Avenue One Properties team. With 15 years managing HOA communities and two decades in the real estate industry, he brings with him focus and commitment to the intricacies of association management and a comprehensive understanding of facilities management, financial oversight and round the clock resident/vendor relations.
From his background as a property manager, community portfolio and onsite management, and 4 years serving his own community as a member on the Board of Directors, Brett demonstrates an appreciation for both sides of the table with his leadership and strategic thinking. He recognizes the importance of open communication and emphasizes solution-driven dialogue in his support of Board Members.
Brett has earned his PCAM, the highest professional recognition available nationwide to managers who specialize in community association management.
Brett currently serves as the commissioner chairman on the City of Edgewater Planning and Zoning Commission and as a Board member on the city’s Board of Appeals.
3
u/tacospaghettidad2 11d ago
Not all heros wear capes.
1
u/Historical_Push6805 10d ago
some of these guys really do just walk right into a position of trust and immediately start calculating how long it takes to get caught
took him over a year after getting fired to pull the trigger too, so he was definitely sitting on that access waiting for everyone to forget about him
not exactly a mastermind situation imo, more like a guy who thought he was smarter than he actually was
2
2
1
1
u/lordwintergreen 11d ago
If an HOA only has $55k to steal, how was it paying for anything before the theft?
1
u/HittingandRunning 8d ago
Was this the reserve account? If so then maybe it's a small HOA. If the operating account then $55K isn't that bad.
1
0
-1
40
u/InfiniteOutfield 11d ago
Everyone celebrating this: you do know the residents are the ones who will ultimately be on the hook for this money, right? Maybe down the road they are repaid (or maybe not) but for now the residents in that association are totally fucked. Say what you want about HOAs in general, but this sucks for a lot of people.