WATCH THE PEOPLE WHO ARE WATCHING YOUR MONEY

 

I was involved this week in yet another situation where an association’s money was stolen by their management company.  Literally take out of their account by a management company employee and diverted to his own.  He was bright enough to create an elaborate system that made it appear legitimate bills were getting paid, but ultimately dumb enough to get caught.  When the management company realized what their employee did, he was fired and the money returned.

Over the years I have been involved with other cases wherein the manager opened up a fake company that sounded almost exactly like the association’s insurance agency.  The association thought they were paying their insurance agency every quarter.  They weren’t.  They were paying the manager, who is still incarcerated as of this writing.

Similar cases involve payments to spouses of board members, board members who weren’t paying assessments, and out and out payments to the board members themselves.  In one case, my client, who actually was a rocket scientist was able to uncover theft of association funds by the President via a sophisticated scheme of fake names.

There are so many ways to steal from an association.  I can tell you this however…..in every case it happens because of a false sense of security and the thief knows that nobody is watching.  It’s the ultimate case of the fox guarding the hen house.  Amazingly, some of these crimes go on for years.  Not even the CPAs for the community catch the problem.

So, I know how boring it is to read a financial statement.  I know that as a board member you don’t get paid and don’t want to spend countless hours reviewing bank statements, bank balances and check registers.  Just know however, that nobody…..not even the people that are paid to……. cares about your money like you do.

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