| Condo groups victims
MELISSA E. HOLSMAN of the News staff
MSNBC - West Palm Beach , Florida
TREASURE COAST, FL, May 20 -
Alfred L. Laidman remembers his disbelief
when he learned his signature was forged on checks from the River Pines
Condominium Association that residents had been betrayed by the man entrusted
with their money.
"It really took the
wind out of you," Laidman said. "If you met him, you’d swear he was your
uncle that he was straight as an arrow."
The man was Biagio
"Ben" Mento, 46, a one-time Port St. Lucie real estate salesman who became
president of Prestige Property Management Co. He now faces federal charges
in a $1.2 million embezzlement case involving 10 local homeowners associations,
six banks and a two-year FBI investigation.
authorities and condo law experts say the Mento case serves as a warning
to homeowners’ associations: Take extra precautions to protect your money.
that should alert all homeowner associations whenever they decide to retain
someone to assist them in their bookkeeping and finances," said lawyer
James Bowdish, who represents a bank in one of the Mento-related lawsuits.
in his 27-year career in Martin County, he’s never seen one person take
advantage of so many associations.
the future, they will be on their guard and do a better job of investigating,"
A similar warning
comes from Brian Gervais, an economic crimes investigator with the Martin
County Sheriff’s Office, who worked on the Mento case with the FBI.
"You can trust
someone to handle your accounts, but that doesn’t mean you never check
on it," said Gervais, who during the investigation repeatedly heard the
"outrage" of association board members.
"Over the years,
they built up these reserves and all of a sudden someone comes along and
wipes them out. It was a big hit for a lot of them," Gervais said of Mento.
"Once the fox was guarding the hen house, then the game was already over.
He never should have been in that capacity, but ... he’s a pro, and they
just fell for it."
At River Pines,
in Port Salerno, Alfred Laidman agreed.
Laidman is former
vice president of the association, which three years ago learned that more
than $230,000 missing from its bank account. Federal investigators allege
Mento forged seven checks on the account while he was under contract to
manage association finances.
The forged signatures
"This man, you
really felt he was so trustworthy," Laidman said of Mento. "I’ve never
met any one like him very outgoing and likable. He was slick. ... He is
a real con man."
Mento, now serving
a 10-year state prison sentence for adding zeros to a $30 check to make
it read $30,000 is scheduled to appear Monday in federal court in Fort
Pierce on the condo fraud charges.
In that case,
he initially pleaded not guilty to 25 counts of federal bank fraud and
one count of money laundering for allegedly embezzling at least $606,000
through Prestige Property. Monday’s appearance is for a change of plea
federal public defender Leon Watts, declined to discuss the reason for
In the Mento
case, court documents, law enforcement statements and victim interviews
provide a detailed look at how unwary homeowners associations can lose
The story begins
in 1995, when Mento, then working for a Port St. Lucie real estate firm,
expressed an interest in buying Prestige Property Management. The company
managed payroll and maintenance for more than 80 homeowners associations
in Martin and Palm Beach counties.
For 10 years,
Prestige had been owned by Joseph Rizzuti, of Palm City, now chairman of
the citrus export company Clements Golden Phoenix Enterprises.
In an interview
last week, Rizzuti said a West Palm Beach real estate agent he’d hired
to sell Prestige recommended Mento.
"I didn’t know
about his background. But the real estate office pre-qualified him, and
they said he had references and had the money in the bank," Rizzuti recalled.
"My first impression was that he was a finance guy, which was good for
that business. He was a very smart man."
When Mento bought
Prestige, Kevin O’Hay already was manager there. O’Hay said at first it
was a "pleasure" to work with the new owner.
worked there was very happy to go to work every day," O’Hay remembered.
"I couldn’t believe that somebody who hadn’t been in that business before
picked it up so fast. ... He seemed to be a man of superior intelligence
and almost an uncanny photographic memory."
O’Hay said he
often went with Mento to meet potential clients.
"He was smooth,"
O’Hay said. "Before he got to a meeting, he knew their (homeowners association)
background and what was going on with their organization. There were times
that we were hired before the interview was over."
Years later as
authorities uncovered the association check forgeries O’Hay said he couldn’t
believe Mento was responsible.
"I was shocked,"
O’Hay said. "I thought the guy walked on water."
Since then, O’Hay
said he’s been "living this case every day for the past three years."
He formed his
own property management company taking over some of Mento’s former clients
but "almost every day I have to tell someone that I wasn’t involved with
this. ... We were just pawns.
"Here we are,
three or four years later, and we are still seeing the ripples of what
happened," O’Hay said. "This guy put it on to the nth degree. He’s the
quintessential con artist and hurt a lot of people."
A shell game
The forged condo
association checks began showing up in 1997, according to FBI special agent
Mike McBride, who led the Mento investigation. Prosecutors allege that
from July 1997 to April 1998, Mento passed $1.2 million in forged checks
on the bank accounts of condo association clients.
Mento forged the checks by tracing actual board member signatures.
"He was doing
good forgeries," McBride said. "He would take from one association, then
take money from another association and replace it in accounts that were
being questioned. So association number two was out the money that was
originally taken from association number one."
For months, association
officers didn’t notice; many didn’t realize ownership of their management
company had changed, McBride said. For 10 years, "a lot of these people
had been dealing with Prestige Property Management ... and didn’t think
they needed to worry."
The forged checks
finally began to be uncovered during routine association audits in 1998.
Between April and June of that year, seven associations filed notifications
of forgery with the Martin County Sheriff’s Office.
office and FBI opened an investigation.
To unravel the
forgery scheme, sheriff’s detective Brian Gervais created a spreadsheet
seven pages long, tracking the checks that moved among condo association
clients and into Mento’s own Prestige Property account.
In one example,
prosecutors allege, a forged $67,900 check from the River Pines Condominium
Association was deposited in Mento’s Prestige account on March 16, 1998.
The next day, a forged check for the same amount $67,900 was deposited
back in the River Pines account but it was from Monarch Country Club in
In ensuing days,
forged checks from other associations went into Monarch’s account to replace
that missing money.
"You have one
block of money that you want to move to Prestige, but you actually have
a set of forged checks," Gervais explained of the Mento case. "When the
shell game is over, you end up with a net gain by Prestige of approximately
$606,000, but you have approximately $1.2 million in forged checks."
the $606,000 diverted from association clients to Mento’s account was used,
among other things, to buy a $200,000 home in Palm City and a race horse
worth more than $7,000 in Miami-Dade County, and to lease a Lincoln Continental.
Mento also paid
off a $219,547 federal tax lien against Prestige Property, FBI agent McBride
said, adding, "Guess where he got the money from the homeowners associations."
investigation, McBride and Gervais said they repeatedly encountered association
board members who couldn’t believe Mento had betrayed them.
"A lot of them
told me he seemed like such a nice person and so trustworthy," Gervais
said. "Of course, they didn’t know his background."
A shady background
What the associations didn’t know was that Mento had served almost five
years in federal prison on wire fraud, bad check and embezzlement charges
in New York in the late 1980s and ’90s.
The charges included
skimming $103,000 from Norstar Bank of Central New York in Syracuse, N.Y.,
where he worked as vice president and senior investment officer.
While in federal
prison, he was charged with swindling more than $100,000 from a fellow
Mento told the inmate he was an investment banker who could get big returns
on the inmate’s savings. The man invested $100,000. Mento then used an
ex-con in New Hampshire to send fake statements to the inmate’s wife to
recruit new investors, even providing references to vouch for his reputation.
his prison sentences, Mento was placed on "supervised release" and in 1995
he moved to the Treasure Coast.
While still on
supervised release, he bought Prestige Property Management without telling
his probation officer, according to the federal indictment.
Asked about his
business, Mento told the probation officer he was "employed as a budget
analyst and failed to disclose that he was president and co-owner ... with
monetary oversight responsibilities," the indictment said.
When Mento bought
Prestige he had a partner: Robert W. Penrose Jr., who served 21 months
in federal prison on 1991 charges that he embezzled $83,000 from his partners
in a Gibbsboro, N.J., dental business.
told investigators he and Mento had been in Allenwood federal prison in
Pennsylvania at the same time, and while there made plans to move to Florida
and start a business after their release.
Penrose was sent to a halfway house in Miami, then finished three years
of supervised release in May 1996 while serving as Prestige Property’s
vice president. He died of natural causes in his Fort Pierce home in September
None of this
criminal record was known to the homeowners associations who contracted
with Prestige, however.
"I’m sure if
they’d had any idea that Ben Mento and Robert Penrose had been both serving
time in a federal penitentiary together, they would have found a different
property management company," detective Gervais said.
Added FBI agent
McBride: "They never did a background check on Mento because he never had
to file with the state."
Florida law, property managers who handle day-to-day management issues
are required to have a license and are subject to background checks in
the licensing process.
company executives like Mento aren’t required to have a state license,
so don’t undergo background checks.
spokeswoman for the state Department of Business & Professional Regulation,
said owners of property management companies must submit a registration
form to the department, listing all officers and executives, "but they
are not required to be licensed."
That hasn’t changed
in the three years since the Mento case brought attention to the licensing
gap, but another area of the law has: State regulations approved in 1999
now require homeowners associations to have insurance to cover losses from
dishonest management companies.
The Mento case
also sparked complex legal battles among condo associations and banks.
Between 1998 and 2000, Mariner Villages of Stuart, Monarch Country Club
of Palm City and Villages of Ocean Dunes in Jupiter all filed lawsuits
over Mento’s alleged forged checks.
In Port Salerno,
the River Pines Condominium Association still is in court, suing one bank
to recoup $88,750 and another, First National Bank and Trust, for an additional
In the First
National case, River Pines argues the bank should be responsible for accepting
and not detecting three forged checks.
"We feel the
bank is at fault completely with this," River Pines President Marty Connelly
said. "When you look at the paperwork, they absolutely are at fault, and
we will pursue it to the end."
James Bowdish, First National’s attorney, argues River Pines is responsible
for its own losses, because the association was negligent in dealing with
Mento and in not monitoring its accounts.
apparently did not do any checking into (Prestige) before retaining them
to supply services," Bowdish said. "They allowed Prestige access to their
post office box where the statements were sent. And ... River Pines failed
to discover the first forged check, which occurred in July of 1997.
"Had that been
discovered promptly and they had notified the bank, the other forgeries
would never have occurred."
to the River Pines case, First National has counter-sued another homeowners
association, Cedar Pointe Villages 6, in Stuart, because one forged River
Pines check, for $46,325, was written to Cedar Pointe.
"What we are
doing is asking the court that if we are found liable on these checks,
we would like to have Cedar Pointe give back the $46,325," Bowdish said.
In court papers,
Cedar Pointe Villages 6 denied liability for the River Pines check, in
part because of what it alleged was First National Bank’s "own negligence
in failing to verify the signatures or otherwise detect the error promptly."
In an interview
last week, Eugene L’Heureux, a Cedar Pointe board member, said the association
hadn’t known the River Pines money was in its account because there were
"so many checks floating around."
Besides, he said,
the River Pines money wasn’t actually available for use because Mento already
had robbed Cedar Pointe of more than $128,300.
"That was not
a windfall," L’Heureux said. "If we had some extra bucks, we would reimburse
River Pines but we don’t. We were taken too."
After the check
forgeries were uncovered in 1998, Mento closed Prestige Property Management
and a year later after a bank foreclosure on his Palm City house moved
to West Palm Beach, where he quickly had new legal trouble.
In May 1999,
he was arrested on state charges of altering a $30 check to make it read
$30,000 and taking about $1,200 from a Lake Worth video store where he
worked. A year later, Mento was convicted and sentenced to 14 months but
didn’t show up to serve that term.
The FBI’s McBride
and sheriff’s detective Gervais tracked him for five months, finally finding
him using aliases to rent a Jupiter apartment and to find employment in
West Palm Beach.
He was working
at a company "that of all things, will consolidate your debts for you,"
McBride said. "They said he was a good worker and didn’t have a clue."
Because he fled,
Mento in October received a 10-year prison sentence on the state forgery
and theft charges. In January, the federal indictment was unsealed on the
bank fraud charges related to the homeowners association forgeries.
on the Mento case, Gervais said the lesson for homeowners associations
is to watch finances closely, even if they’re paying management companies
to handle the books.
potential fraud quickly, associations can "minimize the amount of damage
you’ll be exposed to," Gervais said, noting:
"This type of
fraud is almost like a game of musical chairs. When the music stopped and
the whole thing unraveled, a lot of people didn’t have a place to sit,
and all the money was gone."