Exclusive Investigation: Missing Money

Article Courtesy of WFXR FOX NEWS

By Len Stevens

Published March 2, 2020


FOREST, Va. – In a WFXR News exclusive report, we investigate allegations of embezzlement in the greater Lynchburg area. Several homeowners associations say, altogether, they have lost about $1 million.

They say the money was taken right out of their bank accounts, by a man they trusted. Now, the business that man owns, Lighthouse Properties, has lost its Real Estate Firm license in Virginia and a joint criminal investigation by the Campbell County Sheriff’s Office and the FBI is now underway.

To Kriste Gerhard, and so many others, it was a shock. The former Director of Operations at Lighthouse Properties in Lynchburg says, back in November, she and other employees became aware of a problem with one of their clients’ bank accounts, then another and another.

Gerhardt says more than 12 homeowners associations in the Lynchburg area, who trusted Lighthouse Properties to manage their funds were missing a lot of money.

“It ranges anywhere from $25,000 or maybe even a little bit less to over $250,000 dollars (depending on the HOA),” Gerhard said.

Even more shocking, Gerhard said, the bank statements given to customers indicated the accounts were fine, actually growing, but the money was gone. Gerhard said she and other employees immediately tried to figure out what had happened. She told investigators they did not have access to the accounts and that only the owner of Lighthouse Properties, Tim Penick, did.

“That obviously concerned all of us, Gerhard said. “We were fearful that there had been a hacker or something.”

Among the hardest hit HOA’s, Jefferson Oaks in Forest, Gerhard said.

Bob Lemon, Jefferson Oaks Property Owners Association Treasurer, said his community was just as shocked.

“In our case, we’re talking well over a quarter of a million dollars of reserve funds,” said Lemon. “The bank statements and things that had been furnished to the association and its members consistently showed the build-up of those funds over time, building to that level and we were actually feeling very, very good and then to learn that they are all gone was extremely painful. There was pain, anger, and confusion.”

Lemon wasn’t treasurer at the time. He inherited the problem and can explain just how devastating this is to the residents at Jefferson Oaks.

He said many of them are retired and living on fixed incomes. The reserve funds are used for things like bigger maintenance projects, road and roof repairs, and other high-dollar items. For Gerhard, it was devastating. She said she probably didn’t sleep well for a month.

Over the years, she had become friends with many of the people who live at these properties. She often found out with the clients at the bank that their money was gone.

“It broke me several times in the bank,” Gerhard said. “Not only did the bank tellers cry, but I cried. And then, in this one instance, the board member had to hold me up. It was just devastating, time after time.”

In a search warrant, Investigator Mike Bryant with the Campbell County Sheriff’s Office references an account ending in 6217 — at Atlantic Union Bank in Forest. He says a “user activity report” provided by the bank shows that for every activity on that account, the user ID was “tpenick” and the user name was “Tim Penick.”

In the search warrant, Bryant writes “Money from at least seven different Lighthouse Properties clients was being moved into account 6217. There are other unidentified accounts which were the source of money coming into account 6217. There are also unidentified accounts which were the recipient of money being transferred out of account 6217.”

Bryant also writes that he “observed similar activity on the account statements for account 6217 for a time period from May, 2018 through October, 2019. Over one million dollars was transferred into and back out of account 6217 during that time period, but the transfers occurred in different increments and many different account numbers.”

WFXR’s Len Stevens tracked Tim Penick down to ask for his side of the story. The encounter, which was recorded on video, went as follows:

Stevens: “Mr. Penick?”
Penick: “Yes.”
Stevens: “Len Stevens with WFXR TV.”
Penick: “Hi.”
Stevens: “I’m wondering if you would want to talk to us a little bit about the accusations out there about embezzlement.”
Penick: “No sir.”
Stevens: “You have no comment on this?”
Penick: “No comment.”
Stevens: “I mean, the understanding is, they’re talking about more than a million dollars going into that account. I’m giving you an opportunity to set the record straight on this.”
Penick: “I have no comment.”
Stevens: “None at all?”
Penick: “No.”
Stevens: “Nothing to say about the people…”
Penick: “I have no comment. Thank you.”
Stevens: “Can I talk with your attorney. Would your attorney talk?”
Penick: “I have no comment. Thank you.”
Stevens: “None at all?”
Penick: “No.”
Stevens: “Can I give you my number and then if you want to change your mind on that, you can give me a call? You’re sure you don’t want to say anything about this?”
Penick: “No. Is this going to be on the news? Are you guys filming this?”
Stevens: “Well, this is a very serious situation, right? I mean, you would understand that. I mean, people are going to make up their own mind about you. They’re going to think that you’ve
done a terrible thing and a lot of times, on the surface, it looks that way, but maybe there’s another side to the story and I want to make sure that you have an opportunity…”
Penick: “I can appreciate the comment. I can surely appreciate that. If you can hand me your card, I can pass it along.”

Stevens and a WFXR Producer left a business card, but have not heard back. In addition to the homeowners’ associations, Gerhard said dozens of landlords who did business with Lighthouse Properties are also hoping to get money back.

Bob Lemon, Treasurer, Jefferson Oaks Property Owners Association Treasure, said the FBI is now investigating and he met recently with Investigator Bryant and an FBI agent to discuss this case. At last check, no arrests have been made.

It’s important to point out, there is no allegation of wrongdoing by Atlantic Union Bank. It’s simply the bank that was used by the parties involved. It is also important to note that Tim Penick is considered innocent unless and until proven guilty in a court of law.

Stevens restated his offer to Penick, that if he wants to share his side of this story with WFXR, he is welcome to do so.