Condo Associations Fail to Protect Owners from Fraud

If you own a condo in South Florida and actively attend board meetings, then chances are you had questions or were suspicious of certain decisions as it relates to management of finances. Inquiring about such Board of Directors/management acts is cut and dry per Florida law. You are the owner and have a right to know. But if you have faced challenges in obtaining copies of association records, chances are your association is not following the law. It could be fraud.

Last year, an article featured in the Miami Herald, stated that “in 2015, Miami-Dade recorded the highest number of complaints of irregularities and fraud in the administration of condos of any county in Florida.”

That article sparked outrage, and an investigation by the El Nuevo Herald and Univision 23, which revealed systemic cases of “electoral fraud, conflicts of interest, mismanagement, and rigged bidding systems among many condo associations in South Florida.” Now almost a year since launching that investigation, the Herald reports that a Miami-Dade grand jury has issued a report that has found that “the Florida state agency that regulates condominium associations does not work to protect the tens of thousands who live in condos, resulting in extensive fraud, mismanagement and conflicts of interest, among the boards and management companies that govern them.”

According to the grand jury report, “Unfortunately, the [Department of Business and Professional Regulation, or DBPR] seems ill-suited to resolve, correct or prevent many of the recurring problems that have been brought to their attention…”

In a statement to the press, Miami-Dade State Attorney Katherine Fernandez Rundle said, that the report clearly indicates that the DBPR “is not effective and doesn’t protect condominium owners from fraud and mismanagement.”

So, if the state has found that many condominium boards fall short in protecting owners from “fraud and mismanagement,” what can you do to protect your interests, and hold your condo boards more accountable?

How to Avoid Fraud and Condo Board Misconduct
With so many complaints of fraud, and at the same time, so many new condos being built, it is incumbent on all condominium owners to take action to protect themselves, and ensure “best practices” by their boards.

Every association should have a written policy for when and how to have a periodic assessment and/or review of all internal controls. Other examples of “best practices” would be to:

• Establish proper purchase authorization procedures.
• Create and maintain an “approved vendor” list.
• Insist on competitive bidding for all projects and major purchases.
• Require two check signers, with guidelines for all purchases.
• Require bank lock boxes for maintenance payments.
• Provide detailed procedures for all payroll approvals.
• Implement a detailed “conflict of interest policy,” as well as an “anti-kickback policy,” to be signed by all Board members.
• Insist upon monthly or quarterly accounting reports, which should include balance sheets, statement of revenues and expenses, and a cash basis statement of receipts and expenditures, and all bank reconciliations.

Avoiding Issues with Fraud in Condo Association

According to a recent article featured in the Miami Herald, “in 2015, Miami-Dade recorded the highest number of complaints of irregularities and fraud in the administration of condos of any county in Florida.”

Three high-profile allegations of electoral fraud were high-lighted in the Herald piece: at The Beach Club, Los Sueños and Bella Venezia. However, these are just among hundreds of other complaints submitted to authorities in 2015.

With nearly 1.6 million condos in Florida, and almost 40% of those in Miami-Dade and Broward — and more being built daily – condo associations can expect increased scrutiny from state and local regulators.

More recently, on April 15th, the Herald reported that Miami-Dade Mayor Carlos Giménez said he will be traveling to Tallahassee during the legislative session to support a group of state lawmakers from South Florida who are seeking to reform state legislation in order to crack down on the growing wave of condominium frauds.

What Should An Association Do to Avoid Fraud Allegations?
With so many prevalent accusations of voter fraud occurring in our area, now more than ever condo associations must pay scrupulous attention to their record keeping and election practices. Most accusations of fraud stem from falsification of ballots. The Florida Administrative Code sets forth several rules and regulations on ballots and counting procedures with which condo boards must comply. For example, Section 61B-23.0021 of the Code requires the following processes be followed before ballots can be accepted and counted.

• Maintain accurate, updated records showing the current owners of all the units.
• The signature and unit identification on the outer envelope shall be checked against a list of qualified voters by the impartial election committee.
• Where voting certificates are required for multiple or corporate owners, the voting certificates must be on file and the person signing the ballot envelope can only be the person who was designated on the voting certificate as the eligible voter.
• Any exterior envelope which is not signed by the eligible voter shall be marked “Disregarded” and shall not be counted.

But in addition to the safeguards required by the state, it is a good idea for condo associations to implement additional measures to ensure their election processes are beyond reproach. Some such measures could include watermarked ballots so they cannot be photocopied, or require only votes cast in person by residents with photo IDs.
Clean condo board elections not only ensure state compliance, but more importantly, that those elected to the condo board accurately reflect the will of the residents. Many of the complaints levied against the various boards in Dade and Broward counties, allege that board members basically “stole” their positions on the board. They further allege that unscrupulous board members maintain their power through manipulation, intimidation and other crooked means.

Having proper procedures in place, also ensures that the will of the residents is rightfully represented, and those on the board, are the ones actually intended to be there.

Who Should Condo Associations Hire to Audit and Oversee Election Processes?
Many associations will have their condo attorney oversee this process. Another option is to have Certified Public Accountants and Advisors experienced with condo associations. They can help with audits of condo associations regarding their balloting processes.

• They help implement election fraud mitigation policies, and often working with your attorneys. CPAs can develop detailed “first notice,” and “second notice” procedures for receipt and distribution of Candidate Application Forms and voting procedures.
• CPAs can also advise you on proper Validation of Voting Certificates, how to handle proxies, and implement a plan of suitable record keeping, so that in the event of any accusations of improper procedures, you can have all the necessary documentation and discovery in place to prove otherwise.

Many condo associations are opting for electronic voting as a way to combat voter fraud and guarantee election results. While more costly, it may provide peace of mind. Does your provider have experience with e-voting. 

Lack of Transparency

While I've been impressed so far with the new manager, Anibal, I'm concerned now that suddenly, information that was readily available online to unit owners, we must now pull teeth in order to learn about our investment.


I visited management's office November 2 requesting to read all the management reports since KW Management took over. This used to be available online with Continental. Anibal instructed me to send the request in an email. I did so on Nov 10 and 17. To this date (Nov 21) I have not received any reply. I wonder what the obstacles are this time...


At the last board meeting this past week, Arie Pompas stood up and indicated he sent a letter requesting inspection of records surrounding the entrance ramp project and that he received a response (he showed the letter) that the documents were not available. Where are they? Why are documents suddenly disappearing, misplaced. If they are at the attornies, then per the law, they must be returned to the office so Arie Pompas can inspect them and/or make copies. Per our bylaws he can request copies and have them sent to his unit. To quote Shakespeare "Something smells rotten in the state of Denmark".

Private Town Hall Meeting well attended

Tonight there was a private town hall meeting for all unit owners, except board members.

Many residents came to this "Private" town hall meeting (the party room was reserved under the name of a unit owner who could then decide who was invited and who was restricted) for two reasons as we went around the room to give everyone an opportunity to voice their concerns and opinions with NO TIME LIMITS to talk. It was unanimous:

1- Residents are extremely concerned about the lack of progress for which we pay a handsome maintenance fee AND the fact that the association has gone backwards. Projects for which we paid a special assessment have not started in two years and that our property is not well maintained as it used to be years ago.

2- Residents admitted the only reason they attended this "meeting" was because they learned board members would not be permitted. Many residents refused to attend the regular Board meetings due to the fact that they do not want to give up their valuable time and sanity for a gathering that is consistently unproductive and full of vicious attacks.

Wow--apparently word was spreading that when Christine Michaels was not attending meetings, other unit owners were being attacked as well. And the President never ejected the culprits or herself. I knew it was a matter of time.

Nonetheless, the meeting was productive--civil, cooperative, residents could talk openly and honestly without being attacked even if we differed on specific management details. There was a collective sigh of relief and hope for a new board, and therefore a better tomorrow. But the hardest part is yet to come to realize the better tomorrow. Dispelling the heinous lies of current board embers about past projects. I recall current board members went around telling residents I wanted to pass a special assessment during the "campaign" last year. This was absolutely not true. Yet residents failed to come directly to me for the truth.

I ENCOURAGE ALL RESIDENTS--GET THE HARD FACTS AND SUPPORTING DOCUMENTS BEFORE BELIEVING HERESAY. Your investment is at stake.

Missing the Good Ol' Days

It's Labor Day weekend and I wanted to share something positive in our community. Please don't hold your breath. It's not Board related. The words "positive" and "Board" are an oxymoron.

Rather, a group of resident neighbors decided to get together on this day to share a meal and some good times. Spearheading this gathering was Phill and Nikki Hawkins. In meeting and getting to know the Hawkins, you come to appreciate this couple. They truly care about the community by coming to all the board meetings, offering suggestions and getting involved.

Each person brought a dish or meat to barbecue, and bottle of wine. We shared food, stories, and laughter. Aah, a semblance of the good ole' days.

I recall organizing social functions for the whole community-- a wine and cheese happy hour, a 70' dance party, a luau, a Barcardi cocktail happy hour (free of charge)... Sadly the antagonism and hostility of this board have kept volunteers at bay. No one wants to offer their valuable time and energy, only to be blamed for something that will go wrong.

But this is a private moment among a group of residents. Will this property every return to a neighborly one, where we know our neighbor's name, greet each passerby "good morning", invite a nieghbor for cup of coffee or glass of wine?

Drama continues on the anniversary of Sep 11

Today is the anniversary of the attacks on our nation on Sep 11, 2001. Throughout the day were reminders of the suffering of our nation at the hand of terrorists, pure evil. Cloaked in a "holy war", their sole mission in life is to destroy the U.S.


A moment of silence a few minutes before 9am.

An email with an attachment--a music video memorial.

The evening news highlighting the memorial services in New York City and the Pentagon.

Life moves on, but we will never forget. Life's daily tribulations are trivial in light of the bigger picture. To defend America, to defend her residents, to protect our freedom.

Life goes on. Getting up in the morning, going to work, putting in a full day's work, taking care of one's family.

A day like any other.


Tonight was not a usual evening. Tonight was a board meeting at Brickell Place. As it turns out it was a typical meeting.

A lapse of two months with no board meeting, I attended the meeting to learn what progress was made since the new management company began in June.


The meeting started 7:10pm. The President skipped her President's Report and the meeting commenced with the Treasurer's report. One resident asked about the protocol for going after residents in arrears and possible foreclosure. The prediction is positive as Brickell Place II is relatively unscathed by the escalating foreclosures in neighboring new buildings. Brickell Place numbers only six units in late payments, a majority are repeat offenders for years--long before the housing crisis. Some good news.

The next agenda item was the "Rotunda/Paver Entrance". When Ana Guillen asked the property manager, Anibal, for three bids, he explained he did not have them yet. "Then why is is this on the agenda if we have nothing to read or present or vote on?" asked Ana. The property manager replied that he was awaiting on the board to decide on the scope of the work.

A back and forth discussion ensued among board members and the property manager about who said what behind the scenes and in emails. The audience sat in disbelief. Clearly the board was disorganized and dysfunctional. Among the residents in the audience, comments circulated that we are now in the ninth month of this year, and the second year that the entrance ramp is an eyesore. 18 months had passed since the slate was ripped up and we were not any closer to a solution. Frustration was mounting as the board continued arguing amongst themselves.


Three of us in front row all raised our hand with comments. Apparently we echoed the same suggestion. Carol S. spoke first and vocalized a step by step plan. Step 1--determine scope of work; Step 2- .....[check recording] It's really not that difficult.

Next item on the agenda, the Grievance Committee.

A litany of grievances were presented, mostly noise complaints. Most offenders were fined $100.00. One grievance involved vandalism. Sadly we all realized that our property was experiencing a deterioration alongside the physical. One offender of noise complaint, was also witnessed running naked in the hallway. What is happening to Brickell Place? Does physical deterioration of a building breed incorrigible behavior and lack of respect by residents for their neighbors and their home?


Speaking of lack of respect, Mr. Jaffee in true form, launched a verbal attack on a resident based on a security report that was erroneously reported-an incident that happened three months earlier. Insanity reached a whole new level. The incident was about a missing cart which was found. No harm, no foul. That resident was me. A neighbor, it turns out a neighbor borrowed my cart.

When I discovered my foldable shopping cart missing (as happened before) I reported it immediately to security. Then I decided to go to garage to look for it myself. In walking the entire garage, the only person I saw on the southeast corner (far from my car) was Mr. Jaffee. At no time did I see Mr. Jaffee with my cart or near my vehicle--the security cameras proved this. Yet when I walked back to the complete opposite corner of garage to my car, my cart reappeared.

I immediately phoned Pete Penaranda (security director) and asked him if he told any board members about my missing cart (based on fact that board members asked security to remove my cart in the past year). He said no. I asked if he was sure. I could detect the change in his tone--clearly he was upset that I questioned his integrity. Did I have a right to ask? I believe so as it is well known in the community that board members were harassing me throughout the year.

Why was this even brought up when it was resolved? Clearly in an attempt to try and humiliate me. I later learned the manager instructed Pete not to share this for the same reasons that many other incidents are not shared in detail at meetings. But I also learned that board members insisted Pete report the incident--ahh so it was not Pete's decision but yet another orchestrated event by Andy and company. The sick and stupid games people play. We have more important things to worry about!

Again this small and resolved incident was shared in a board meeting when countless other incidents were never aired. Why wasn't the incident of Robert Jaffee throwing hot coffee on a neighbor reported then? Why wasn't it reported that my commercial sign was stolen from my vehicle and the only person near my car was Andy Scalese (as seen on video camera), although I can not say he took the sign because the taller car parked next to mine covered the area where the sign was. But the opportunity was there. And he was the only one there. As much as I believe Robert and Andy are incapable of accomplishing anything as board members as is evident in nothing being accomplished, I never brought these up in a board meeting to humiliate them. Or the fact that I have witnessed Robert smoking marijuana on his balcony some late afternoons.


As predicted, the President failed to stop Mr. Jaffee, and failed to evict him from the meeting for his "rude and disrespectful behavior". Once again the rules are only selectively applied to residents who the board personally dislikes. Ana Guillen, also stated that I only had two minutes to "explain my side", not the three minutes per bylaws (I have this audio recorded) and as stated in bulletin board for nine months, a decision by A. Guillen. "Do as I Say, Not as the Rules Say".

I clarified the gaffes in the security report. But the damage was done. All on the anniversary of Sep 11, 2001 attacks. How quickly some people forget the significance of that date. Of what is important in life. Silly, petty arguments and attacking neighbors was foremost for several board members tonight.

It was another "setup" by board members to take away the focus on their lack of progress. Just another typical Board meeting at Brickell Place II.


And the drama continues...

[A recording is available to support the above statements]

Where's the Beef? err the Elevator Parts?

As I entered the basement lobby, my eyes caught two new notices on the bulletin board.

Something about a Budget Committee meeting this Thursday, September 4. Of course we don't know who is on the committee. There were no recent notices announcing the formation of a budget committee "No communication" asking for volunteers. Perhaps the board recycled responses from a solicitation notice 8 months ago. OK at least they are recycling --even if it doesn't help the environment.

Then tonight as I was walking my dog, I finally had a chance to read the second notice.

Finally, an update on what we have all been waiting for more than the
pageantry and competitive spirit of the Olympics,

more than the electrifying or comical (depends how you view it) political party conventions, and

more than a possible day off from passing hurricanes with names of the
midwest (Hanna and Ike) or European elitists (Gustav and Josephine)!!!

We, residents of Brickell Place II await ....

Elevator parts!! Per the notice, the materials for the elevator will arrive in 10-12 weeks. WHAT?! This was mentioned 10-12 weeks ago!!! At the meeting I attended in April 15, 2008. What happened in the last 10-15 weeks? Nothing of course. Where are the parts? Where's the beef? Sara Palin will be President by the time the elevator parts arrive!

If you calculate 10-12 weeks that would be, let's see, today is September 2, plus 12 weeks brings us to (drum roll please) DECEMBER!! The month that the least amount of work is done. Which means nothing will commence until 2009.

Folks, perhaps under the influence of the energetic political conventions where each candidate claims to be "the one" to start a program, to reform a practice, to cause change, to make a difference, at the risk of sounding arrogant I warned residents nothing would happen this year in addition to last year. I hate to say it, BUT I TOLD YOU SO.