Article Courtesy of The Palm Beach Post
By Tony Doris
Published February 7, 2017
State regulators say former board members of the
20-building Whitehall condos on Village Boulevard misspent more than $1
million of their association’s money on themselves and shifted hundreds of
thousands of dollars from reserves to cover budget shortfalls without
authorization from unit owners, violations so serious that investigators
forwarded evidence to state prosecutors.
Lead Investigator Harry Hague of the Florida Department
of Business and Professional Regulation’s Bureau of Compliance wrote the
current board of Whitehall Condominiums of the Villages of Palm Beach Lakes
Association on Jan. 26 that the former board committed a series of “major”
civil violations of state condo law.
The Florida Department of Law Enforcement also investigated and is awaiting
word on whether the Office of Statewide Prosecution will bring criminal
charges based on its findings, an FDLE official confirmed Thursday.
“They’re reviewing it,” Eric Jester, special agent
supervisor in the FDLE’s West Palm Beach field office, said, declining to
comment further on the open case.
Though prosecutors say they can’t talk about an ongoing
investigation, the regulatory agency’s warning letter detailed 10 violations
of state condominium law that occurred from 2010 through 2015. The
association could be fined $5,000 per violation if the association doesn’t
respond to the letter or if violations recur.
Among the violations cited by Hague at the 480-unit complex:
The former board improperly paid directors Vincent
Rossi, Charles Keeling and Michael Weadock more than $242,400. State
condo law requires that officers serve without compensation unless the
condo governing documents allow otherwise. Rossi and Weadock were paid
as property managers and Keeling, a retired police officer, was paid for
The association spent an estimated $357,200 “for
expenses unrelated to condominium operations.” A more precise accounting
was impossible because records weren’t kept. However, Hague wrote,
evidence shows “Association funds were routinely expended for the
exclusive personal benefit of a member or members of the board of
directors and that these expenses were insufficiently or inaccurately
reported and accounted for, or went unreported.”
The association “diverted” $455,000 from reserves
into the operating fund without condo owner approval, and with no plans
to refund the depleted accounts.
It was current board members, starting in 2014, before
they were elected, who fired the first salvo against the former board, by
filing a civil suit, seeking to remove them for alleged misuse of
association money. They got the state agency to oust President Rossi from
the board for failing to pay his maintenance dues for more than 90 days.
Shortly thereafter, Keeling became president but neither he, Rossi nor
Weadock are on the board anymore.
Keeling could not be reached for comment.
Rossi, in a deposition taken in that lawsuit, denied wrongdoing. Any money
he withdrew with the association ATM card was to reimburse him for money he
laid out for the association, he said.
Shown association bank records documenting such expenditures as money
withdrawn from ATMs at the now-shuttered Trump Taj Mahal casino in Atlantic
City, N.J., he said he didn’t remember the items. “I don’t know what that
is,” he said. “I’m thinking, how many years ago was that?”
Condo debit card records also show multiple transactions at the Seminole
Indian Casino in Coconut Creek.
“Is it regular, Mr. Rossi, for an association to withdraw association funds
at a casino?” he was asked at the deposition.
He replied that the association was told by its auditor, “if money was owed
or put in, that it can be taken out anyway.”
Rossi, undergoing treatment for throat cancer he attributes to Agent Orange,
responded by email Thursday to a request for comment.
In his time at Whitehall, “I have never been charged or even questioned on
any criminal or even civil charges whatsoever,” he wrote. “I was re-elected
four times over an eight-year period by the owners. Before that, the former
three presidents lasted three months, two weeks and two months.”
Weadock, for his part, confirmed to The Palm Beach Post that he was
compensated for working as part-time property manager, starting before he
became a board member. “I absolutely know of not one penny of illegal money
spent anywhere,” he said. “You would never find any checks made out to to me
other than my wage checks.”
As for casino expenditures, “I don’t know about that at all,” he said.
He blamed the investigations on “spiteful stuff, condo bull.”
But Cary Collins, a plaintiff in the 2014 suit who has since become board
president, says the records — or the lack thereof — indicate vast sums are
missing, maybe three or four times what investigator Hague documented. The
association has a $1 million insurance policy to cover such losses but can’t
collect unless criminal charges are brought, he said.
Meanwhile, unit owners are paying higher maintenance fees, because the new
board is obligated to replenish the depleted accounts as aggressively as it
can, Collins said. Unit owners now paying an average of $420 a month
probably would be paying as much as $100 less, $1,200 a year less, if not
for the missing money, not to mention that the higher assessments depress
their property values, he said.