“Living under a terror situation”: Alleged Hammocks fraud tops $3M

Article Courtesy of  The Real Deal

By Lidia Dinkova

Published March 4, 2023


Months after five people were charged with perpetuating a massive fraud at the Hammocks, investigators found the alleged graft likely ran deeper than originally thought.

The fraud topped $3 million “and counting,” David Gersten, receiver for the Hammocks homeowners association, said in court on Tuesday. Former board members used 55 bank accounts and credit cards, which is “exceedingly abnormal” for an association, he said.

“It’s a way to move things around and play a shell game,” Gersten said. “We keep going. It’s an unending process.”

Although Gersten didn’t provide details in court about the fraud he has uncovered, the amount is more than the roughly $2 million previously reported.

In November, the Miami-Dade State Attorney’s office charged former board members Marglli Gallego, Myriam Rodgers, Yoleidis Lopez Garcia and Monica Isabel Ghilardi, as well as Gallego’s husband, Jose Antonio Gonzalez, for their alleged role in siphoning HOA funds. The scheme was allegedly largely perpetuated by the HOA paying bogus vendors, including some led by Gonzalez, for supposed maintenance and other work at the community. The funds largely ended up in the pockets of Gallego and Gonzalez, according to the charging affidavit and the state attorney’s office. All five people charged have pleaded not guilty.

Gersten, whom Miami-Dade Circuit Judge Beatrice Butchko appointed as the receiver in a separate civil case on the issue, said he has filed a $3.4 million fraud claim to insurers. Still, he cautioned that the carriers have a $1 million limit, and his team of attorneys is searching for other ways to recoup losses for residents.

Some of those potentially involved in the fraud also may have insurance, Butchko pointed out during the court hearing. Plus, $1 million still is a good amount of money that may help pay fees for Gersten, attorneys and forensic accountants who essentially took over the board, overseeing the community’s business following the arrests.

Gersten also has hired FirstService Residential as property manager, Elite Guard as the security services firm, and a landscaping maintenance firm has started work. Bids from pool contractors also are being reviewed to ensure the Hammocks gets the best priced firm, he said.

Some residents have expressed concern with fees for Gersten and his team, questioning whether they will be levied an additional assessment to pay for the receivership. Several of the attorneys working on the case have lowered their fees, according to a presentation given in court.

In one of the biggest portions of legal work, attorneys are investigating if the HOA, under the former board’s leadership, filed fraudulent foreclosures against homeowners, and if ex-board members then purchased those homes.

Gersten’s investigation also revealed that the former board had attorneys on its payroll, who collected $3.2 million in fees since 2019 — not all of it for work for the HOA.

The criminal defense for Gallego, first arrested in 2021 and largely painted as the ringleader in charging documents, has plucked $825,000 from HOA coffers.

“How is that a legitimate board charge?” Butchko said.

“It is not,” Gersten responded.

The Hammocks, considered South Florida’s biggest HOA, has more than 18,000 residents across single-family homes and condominiums. The community sits on 3,800 acres in south Miami-Dade County, between Southwest 120th and 88th streets and between Southwest 147th and 162nd avenues.

Still, the Hammocks won’t be under receivership for long, as an election for a new board is scheduled for March 30. Gersten and his team are shepherding the process, including vetting the 13 candidates and holding town halls. They have vowed to ensure election transparency by posting the ballots on the Hammock’s website: https://www.hammockscommunityassociation.info/.

Early voting will be from March 25-29, and winners will be announced on March 31.

The receiver’s work is “expensive, but it’s very, very necessary,” Butchko said in court in response to residents’ concerns. “This has been a fraud that has been going on for many, many years. … A lot of these people have been living under a terror situation.”