Article Courtesy of The
Miami Herald
By Miami Herald Editorial Board
Published November 27, 2022
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In
the long list of homeowner association horror stories, the one emerging from the
Hammocks Community Association in Miami’s West Kendall suburbs is in a
(criminal) class by itself.
It involves charges of racketeering, money laundering, fabricating evidence and
using shell companies. A move to oust the board was thwarted by a fake bomb
threat and a recall election resulted in the board throwing out two-thirds of
the ballots. A whopping $2 million in homeowners fees apparently was siphoned
off.
This isn’t mailbox wars or a fight over the two-pet rule. It’s gangster-style
stuff.
That’s not news to those whose homes fall under the Hammocks HOA, one of the
biggest HOAs in Florida. After Miami-Dade County prosecutors announced a series
of charges this week, including against former HOA President Marglli Gallego,
neighbors told the Miami Herald they felt vindicated. They had been fighting
what they call the “Gallego Mafia” for years.
If even half of the allegations in this sophisticated scheme are true, this is a
tale of suburban greed gone wild. The HOA was functioning, as Miami-Dade State
Attorney Katherine Fernandez Rundle said in the press conference announcing
multiple charges, as “a criminal enterprise.”
The former president, her husband and three others were charged. Fernandez
Rundle said the HOA took money from “hard-working families” and diverted it to
themselves and their associates. A detailed, 49-page arrest warrant lays it out:
Basically, board members are accused of stealing at least $2 million of their
neighbors’ maintenance fees, partly by writing HOA checks to phony companies
that didn’t do the work. And apparently the financial abuse had been going on
for years.
A judge on Thursday appointed a receiver to work with a provisional board until
new elections can be held.
Stealing money from your neighbor is cold. But that wasn’t all. In an even more
brazen move, association leaders this year jacked up monthly maintenance fees by
an incredible 400% without explanation — perhaps because the HOA needed to pay
for attorneys to defend board members against the homeowners who were suing
them. How’s that for chutzpah?
The board hadn’t met in public in 4½ years, meeting in secret since then, but
still tried to block Fernandez Rundle’s office from investigating, going so far
as filing a federal lawsuit against the State Attorney’s Office to block
enforcement of subpoenas. Wonder who is paying for that?
The Hammocks HOA is huge. It sprawls through the Kendall suburbs covering almost
4,000 acres and encompasses 18,000 people in 6,500 homes, townhouses and
apartments. There was a lot of money coming in and, apparently, a lot of
temptation.
But it doesn’t take a big HOA to misuse money or even steal it. How many more
instances of questionable expenses or outright theft are occurring in smaller,
less-prominent HOAs that haven’t gotten the attention the Hammocks is receiving?
Homeowners associations have a valid place in home ownership. They’re supposed
to keep developments from becoming shabby or rundown, which is important to
everyone’s quality of life and property values. But they’re notorious for
escalating petty disputes into pitched battles — fining homeowners for planting
an unapproved flower bed or parking their car in the wrong place. If there
aren’t enough checks and balances on their power, they can turn into
dictatorships. Or worse, as we have seen in the Hammocks.
As Don Kearns, a 28-year resident, former board president and a leader of the
Justice for the Hammocks coalition, told the Herald, it’s time for the state to
tighten up Florida Statute 720, governing HOAs. “Otherwise, it’s a Wild West
free-for-all,” he said. “When you’ve got unscrupulous characters running your
community, 720 is a sieve.”
The state House member representing the Hammocks, Juan Carlos Porras, hasn’t
even taken office yet — he’ll be sworn in next week — but the current turmoil
hardly took him by surprise. During campaigning, he told the Editorial Board, he
heard about the “misuse of power, the abuse, the negligence, the extortion”
happening under the HOA.
He said he already has started working on ideas for legislation to tighten
oversight of HOAs in Florida: “That is my top priority.”
Given the stunning breadth of allegations against the Hammocks HOA’s former
leader, it should be.
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