I recently joined my HOA board, and after many hours of sifting through financials and invoices, I found out that our property manager is committing fraud. He’s stealing from the HOA by paying himself through his shell company. Has anyone else dealt with HOA fraud? What’s the best course of action?

likefunny
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#pwcproud - good work!

likefunny

🥰😂 thank you

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Make copies of everything so trail can't be deleted.

How do you know it's the property manager's shell company? How do you know that company wasn't providing legitimate services? Make sure you have good answers to these questions, and then take it to your local police. Don't confront the guy directly.

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I found we were paying an exorbitant amount of money to one particular vendor for very mundane and basic tasks. I researched there vendor, found they didn’t even have a Google business listing. After some more digging, I found their business registration with the state, which showed me the owner of the company was our property manager. So essentially, he hired himself and is paying himself.

Even if the services are legitimate, the rates are 3-5X higher than what another company would charge. Additionally, it’s an undisclosed conflict of interest.

After letting the board know, I’m wondering what the best course of action is? Let the property management company know? File a report with the state? Let the whole community know? Lawsuit?

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Daw thanks 🥰

1) Make copies
2) Notify the board formally
3) Call a session to discuss and figure out the total $ amount misappropriated
4) Notify the property manager that they’re terminated effective immediately
5) File suit to attempt to recoup the misappropriated funds
6) Meet with the board to discuss how the funds will be allocated (e.g. returned to owners, reduce current year fees, increase to repair fund, etc)

Nice work PwC!

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Agree with EY 1. Document all your findings. Investigate to ensure your findings are accurate. Report it to the HOA board, without him being there. If he is committing fraud, they need to investigate it and report it to authorities.

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Another concern is that the property manager knows where I live, and he knows that I’m the only one on the board requesting financials, and that I have an audit background. If I basically end his entire livelihood, I’m a little worried for my own safety. Idk if it’s paranoia, but it wouldn’t be a stretch for someone who lost their entire livelihood (albeit a fraudulent one), to come after me.

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That’s not a terrible idea PwC1

HOA Board may try to bury it. They will need to be informed no doubt, but let the police decide how to handle it. Probably just the one guy, but maybe others are involved .

How much are we talking in total?

He works with multiple communities?

Honestly I think you leave the bread crumbs for the full board to figure it out. Even if he knows you found it, you genuinely have a vested interest because that’s your money he is stealing. That gives you legitimate grounds to act without fear of retaliation since no one would willingly let someone steal from them.

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