Condo owners fear embezzlement

Article Courtesy of The Charlotte Sun

By Steve Reilly

Published September 19, 2008 


PORT CHARLOTTE -- Charlotte Square condominium owners don't know were their finances stand and many are worried -- very worried.

Chelsea House is one of the nine individual buildings -- which are called houses -- and its residents suspect they are missing more than $140,000 in maintenance and other fees paid to Star Hospitality Management. Other houses are also suspecting losses and alleged mismanagement of their money.

How much money is in question, no one knows.

Sherry Danko of Star Hospitality Management said Thursday she could not comment because the matter is under investigation. 

But according to the minutes taken by an unidentified condominium owner at a Sept. 5 meeting, Danko met with various condominium boards to inform them that Stacey Herrin, a former manager, had been dismissed, and Star filed a complaint with the Charlotte County Sheriff's Office. Herrin had been with Star for more than a decade at Charlotte Square. Whether or not the Sheriff's Office is investigating the case could not be confirmed Thursday.

John Jackomin, Cambridge House vice president, said residents discovered two checks, each for $4,272, written within a week of each other. The checks appeared to be signed by Herrin. Jackomin said she didn't have the authority to act as a signatory on the account. Cambridge House residents, however, do not know if the two checks are the only irregularities. 

The Cambridge House residents hired the Wotitzky, Wotitzky & Ross to represent them. Because each of the houses represents an independent condominium association, residents have been told it might be best to hire their own attorneys.

"At this point, we don't know if all of (the nine houses') interests are aligned," said Cheyenne R. Young, a Wotitzky firm attorney who met with residents to work out a strategy of what their next step should be. 

Robert Mohrbacher, a Chelsea resident, said his association suspects more than $140,000 is missing from its SunTrust accounts, where Charlotte Square condominium associations all bank. 

While SunTrust did not comment Thursday, Mohrbacher said bank officials were cooperating with the association.

Among the irregular transactions, Mohrbacher said, "(Herrin) made out checks to herself and were signed by herself. They were either made out for cash or signed and deposited into another account.

"Unless people do a lot of research, it's not known how (the other houses) were affected" he said. "There was a lot of commingling of funds."

Another unusual transaction showed a $15,000 Chelsea House check in 2007 made out by Herrin to Raleigh House, Mohrbacher said. 

"Obviously, there was nothing that we owed $15,000 (to) the Raleigh House for," he said. "Of course, (Raleigh House) may appear whole."

A meeting Tuesday of more than 100 residents testified to the confusion they felt over the status of their various accounts.

Bill Price, an Oxford House board member, is credited with uncovering the problems when he discovered five checks with irregularities.

Also at the meeting, people learned that the Charlotte Square executive board, representing all of the houses, never called for an independent audit of the management company.

"You may have a wise fox with very trusting sheep," said Dave Johnson, who owns a condo unit with his mother and has 20-plus years of banking in his background. He urged all the residents in all the houses not to think they are safe.

Herrin could not be reached for comment Thursday.

At the cell phone number she gave the Sheriff's Office in an unrelated matter, a woman answered Thursday and said, "No one by (Herrin's) name is at this number."

And an unidentified woman called the Sun and said Herrin no longer lives at her last known Port Charlotte residence.

$1 million condo account theft suspected