Once upon a time we believed the earth was flat. Then we got smart. Today we are told that associations protect property values.
Just what is the official CAI position regarding this particular story and all the other embezzlement stories from around the country? Maybe their position is that there are still plenty of management companies that have not yet been caught with their fingers in the cookie jar so this is “just an isolated incident.” Koger Management Group was one of CAI’s elite members at one time. So what now, CAI?
CAI has always opposed any kind of government oversight. The only way Koger Management Group was caught, and is now being investigated, is because they had a real estate license. Had it not been for that, it would be business as usual. We have been advocating for some much needed independent and objective adult supervision in HOAs to protect the homeowners in mandatory membership associations. If such a thing existed, how many other management companies would be under investigation today?
Kudos to Florida State Representative Julio Robaina for recognizing the need for this and for starting a pilot program in Miami-Dade to provide the oversight.
Here is the part of this story you are not likely to read in the papers. My association, Lake Braddock, was also managed by Koger. The official word is that “we” discovered that funds were missing BEFORE this story broke out and that “we” were able to recover monies that were allegedly embezzled from our coffers. The problem is, “we” only audited the financial records covering a much shorter period of time than the period that these transfers and embezzlements allegedly were to have taken place and “we” do not plan on doing anything else about it because the president does not want to testify in court. So much for protecting property values! – Shu
From the Washington Post
By Bill Turque
Friday, July 20, 2007
Losses Climb for Homeowner Groups
Accountant Says Management Official May Have Stolen $2 Million RICHMOND, July 19 — At least $2 million was stolen from Northern Virginia condominium and homeowner associations, probably by a top executive of the Fairfax City company hired to manage their finances, a forensic accountant told state regulators at a hearing Thursday.The losses sustained by customers of Koger Management Group between 2004 and 2006, described in a report to the Virginia Real Estate Board, far exceed earlier estimates of $800,000. The total may grow as more homeowner associations conduct audits, said Jeffrey D. Barsky, the accountant appointed by the board to investigate the matter. Read the Whole Story