Article
Courtesy of The Miami Herald
By Roberto
C. Blanch
Published March 29, 2016
An investigative report in el Nuevo Herald chronicled the
growing problem of election fraud at South Florida condominium associations.
Based on the episodes of possible fraud uncovered by the reporters and the
growing number of complaints by local condo associations, it has become
apparent that it’s time to put teeth into Florida’s laws and enforcement
actions addressing this type of fraud.
The report uncovered that at least 84 signatures were forged in fraudulent
ballots submitted in the annual board member election last year at The Beach
Club at Fontainebleau Park condominium in northwest Miami-Dade. It also
describes how the election at the Los Sueños condo in Hialeah was anything
but a dream when it resulted in an unprecedented voter turnout of 115
percent after the final vote tally exceeded the total voting pool.
The boards of directors control the purse strings for the communities they
govern, and many communities have annual budgets of multiple millions of
dollars that are used for a variety of lucrative service contracts. As such,
condo association boards make for appealing targets for fraudsters who
conspire to take over their control via annual elections.
In a recent case in Las Vegas, a U.S. Justice Department investigation
revealed that 11 associations were defrauded of tens of millions of dollars
in a board of directors takeover scheme from 2003 to 2009. Forty-one
defendants were convicted of getting their straw unit buyers elected to the
associations’ boards through tactics involving forgery, bribery, ballot
stuffing and dirty tricks. The conspirators were found to have rigged the
associations’ elections by traveling to Mexico to print phony ballots, using
the master key at a condominium complex in order to remove ballots from
mailboxes, and retrieving discarded ballots from condo dumpsters.
South Florida’s propensity for high-end luxury condos owned by investors who
primarily reside elsewhere and do not participate in their annual board
member elections make the area’s thousands of associations with massive
operating budgets ideal targets for takeover schemes.
Even if special attention is given by association members to help ensure
that all of the applicable laws are followed, it has become impossible to
prevent the most brazen and savvy fraudsters from prevailing in their
takeover schemes.
The Miami Herald article reported: “Local police agencies say that most of
the complaints do not involve criminal activities and can be handled in
civil courts. Prosecutors say police or the [Florida Department of Business
and Professional Regulation (DBPR)] are responsible for enforcing the laws,
but the state agency argues that it cannot investigate complaints about
actions that fall outside its jurisdiction or that lack sufficient
evidence.”
Florida is the state with the most community associations in the country,
with more than 47,000, and it has now become imperative for the state’s
lawmakers, regulators and law enforcement agencies to change their
collective mindset in their approach toward combating community association
fraud, theft and embezzlement.
The millions of Florida residents who live in properties with community
associations should raise their voices in a call for the state to enhance
the authority and resources of both the DBPR and the white collar crime
units of the state attorney’s offices. They should also demand stricter
penalties and tougher laws against this type of fraud, and should work
closely with the state’s regulators and law enforcement to help ensure that
their investigations and enforcement actions are as effective as possible.
South Florida, and in particular Miami, has earned a reputation as a hotbed
for imaginative and inventive fraud schemes that strain credulity. If major
changes do not take place in the state’s approach to preventing and
prosecuting community association fraud, we will undoubtedly soon be adding
these condominium board takeovers to the inglorious list of the schemes that
have contributed to our ignominious reputation.
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