FRAUD -- OR CARELESSNESS OF BOARD -- MAY COST CONDO OWNERS $500,000 

NINE ISLAND AVENUE CONDOMINIUM ASSOCIATION, INC.

An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc. 

Published April 2, 2008

For many months owners of the Nine Island Avenue Condominium in Miami Beach tried to obtain the financial records of their association. They even turned to the Select Committee on Condominium & Homeowners Association Governance for help. However, instead of the board being forthright in communicating directly with the Select Committee, the board without hesitation chose to engage their association’s attorney at the membership’s expense to represent them on all matters of communication with the Select Committee. One can’t help but think that a more rational approach by the board would have been to choose to communicate directly with the Select Committee, if the board was fully confident that it could provide complete answers to the questions association owners submitted to the Select Committee. Owners have alleged serious financial misconduct and “disappearing” funds (Miami Beach Police Case#1241/ Miami-Dade County ccsc/#29 Miami-Dade County Police Department/#pd070620327604) and misuse of special assessment funds.

Former board president Gretchen Marshall -- who chose not to run for re-election at the last annual meeting held in March 2008 -- was obviously trying to cover up some serious financial problems.

For the past several months, a few unit owners have tried really hard to get to the bottom of the “missing funds” by providing evidence of alleged financial misconduct to the Miami Beach Police Department. This information, along with facts that had been submitted to the Miami-Dade County Building Code Compliance Office, was finally forwarded to the Miami-Dade County Police Department that had jurisdiction in handling this investigation and made the determination that there was enough proof that grand theft of funds from the association had occurred. On Thursday, March 27, 2008 the police arrested Michael Adkins, owner of Roll-Tek Industries, Inc. for grand theft and contracting without a license.       But, according to the owners, this is just a small part of a much bigger picture. Actually, they allege that 88 owners contracted with Roll-Tek Industries, Inc. and made deposits

WATCH CBS 4 -- VIDEO REPORT March 28, 2008 Worker Charged With Taking Over $100,000 An unlicensed contractor was arrested Thursday and charged with grand theft for taking over $100,000 in deposit money from owners and a condo association in Miami Beach.

totaling about $250,000. The Miami-Dade County Police Detective has been handling this investigation and submitted his case to the judge for the arrest warrant based on complaints filed by 30 of the 88 alleged victims in addition to one complaint filed by the association in regard to a contract that the board signed with Roll-Tek Industries, Inc. for common area hurricane shutters (that resulted in the alleged theft of $44,000, part of the $100,000 reported by the news media last week).

Owners relied on the endorsement of Roll-Tek Industries, Inc. by the former association treasurer Richard Goldstein, former president Gretchen Marshall, and current assistant property manager Rene Zequera. According to owners, Zequera even helped Roll-Tek Industries, Inc. to solicit customers by calling unit owners who live abroad.  Many of these owners have not yet filed their complaints with the police against Roll-Tek, Industries, Inc., because they may not even be aware of the situation or what procedures they must follow to file an official complaint.  Many of the owners who have been victimized by Roll-Tek Industries, Inc. have expressed their dissatisfaction with the board and property manager.  In 2006 the board and property manager actively solicited owners to contract with Roll-Tek Industries, Inc., but now are lax in coordinating efforts to help owners file complaints.

But this is not all. It is only about half of the problem that has been alleged by owners.

    
The condominium building has undergone a far-reaching balcony restoration project. The firm C.A. Lindman, Inc. was hired as general contractor. But C.A. Lindman, Inc. claims that the association board “selected” the company Carolina Metals Products, Inc. as the balcony railing manufacturer/installer (copies of association records support this claim) and that Lindman was required to use Carolina Metal Products, Inc., if hired by the board as general contractor for this project.  C.A. Lindman agreed to this, based upon the board approving an 18% “premium” payment of about $114,000 for the purpose of supervising and coordinating the balcony railing work performed by Carolina Metals Products, Inc. And by “coincidence,” the owner of Carolina Metals Products, Inc. is Michael Adkins (owner of Roll-Tek Industries, Inc.) and his wife Angela Adkins, according to the Annual Business Report filed with the Division of Corporations in Tallahassee . According to general contractor C.A. Lindman, Inc., Carolina Metals Products, Inc. received down payments in the amount of $190,297.60.  Copies of canceled checks allegedly cashed by Carolina Metals Products, Inc. support this claim.

According to the owners, no visible work of any kind was performed by Carolina Metals Products, Inc. for the association and, as of this date, there is no evidence of the $190,279.60 being refunded to the association by Carolina Metals Products, Inc. or by Michael Adkins. As a result of Carolina Metals Products, Inc. failure to perform under the obligations of its contract, a new balcony railing vendor had to be hired more than one year ago by the general contractor, C.A. Lindman, Inc., at a cost of about $200,000 more than Carolina Metals Products, Inc. had charged the association.   

     
So far, there is no indication that competing bids were ever solicited before the decision was made to choose Carolina Metals Products, Inc for the balcony railings project.  Florida condo statutes clearly state that at least three bids must be solicited when a building improvement project is equal to or exceeds 5% of the annual operating budget of the association. It seems the former president Gretchen Marshall and former treasurer Richard Goldstein were two of the five board members most instrumental in making this decision and they did so without soliciting other vendor balcony railing bids for this project. They have attempted to throw the general contractor C.A. Lindman, Inc. “under the bus” on this issue by creating a story that C.A. Lindman was the party solely responsible for selecting and hiring Carolina Metals Products, Inc.  This has been openly disputed by Lindman’s project manager Victor Perez.  Statements made by the general contractor indicate that the association may be sued after the construction work has been completed as anticipated in December 2008.

  
If the people in charge had taken a few precautions and done a little research, they would have quickly found out that other duped owners in another county in Florida had already complained about Roll-Tek Industries, Inc. in 2005. (See: Storm shutter fraud on rise ) 

Already in August 2006, the board of the Better Business Bureau of Central Florida voted to revoke Roll-Tek Industries, Inc.’s membership, because of unanswered and unresolved consumer complaints. The writing was on the wall, but Nine Island board members Gretchen Marshall and Richard Goldstein obviously forgot to read it.

In addition, Becker & Poliakoff’s association attorney David Rogel was hired at member’s expense to “stonewall” and to slow down efforts to legally obtain this evidence.  And the fact that later attempts were made by board members and management to hide and distort the evidence, perhaps suggests that there is something much more sinister at work here than mere gross negligence on the part of the board and management.

More investigations will take place.  This is far from over. 

Storm shutter fraud on rise