A recent case out of Florida highlights the critical importance of financial oversight for all community associations. Following a 2022 investigation sparked by resident concerns over declining reserve funds and undocumented spending, it was discovered that a board member and several co-conspirators misappropriated over $11 million in HOA resources.
A Case of Fraud
The fraudulent operation involved creating shell companies for services never provided, targeting rival board members using HOA resources, and using association credit cards for personal purchases. As a result, the lead defendant was sentenced to seven years in prison and ordered to pay some restitution.
This case serves as a reminder that Boards must remain vigilant. To prevent such issues, we recommend that Boards require at least two signatures on all expenditures and consistently review all receipts and payment requests. It is good practice to have your accountant review the books and records, especially when there is a change in Board members or property managers.