Friday, September 21, 2012

HOA Prez/Developer Accused Of Creating "Well-Oiled Machine" To Rip Off Homeowners Out Of $500K+ In Dues, Fines Gets The Pinch On Felony Fraud Charges

In Polk County, Florida, the Orlando Sentinel reports:

  • Orlando area developer David Meadows was arrested [] on four felony fraud charges after authorities said he stole hundreds of thousands of dollars from owners of his Bimini Bay vacation resort in Davenport.

    The Orlando Sentinel in December detailed a wide array of problems at the community just a few miles from Walt Disney World, which was marketed to international investors and others who wanted to be near Orlando's tourist attractions.

    The management fees Meadows collected for overseeing the Bimini Bay community had increased tenfold during a time when owners complained about poorly maintained public areas, a condemned clubhouse, illegal trash piles and above-ground cable wiring that failed to meet building codes.

    Meadows blanketed owners of Bimini Bay's 200 homes with $100-a-day fines for infractions such as using vertical blinds instead of horizontal ones, the Sentinel reported.

    On Tuesday, state investigators reported that the revenues he collected padded Meadows' development company and that he "maintained a dictatorial control" over the homeowners association.

    "Meadows made his development company the HOA's primary vendor and engaged in self-dealing contracts for personal benefit," the state attorney's investigative report reads.

    A 17-page investigation report released Tuesday by the economic crimes division of the State Attorney's Office for Polk County also charged Meadows with double billing the association for management fees.

    The report stated that Meadows transferred $511,538 from the homeowner association into his development company from March 2010 through July 2011 and a "significant portion" of that became evidence of his "scheme to defraud."
  • Construction started on Bimini Bay in 2000 and proceeded slowly until it halted with the real estate crash of 2007. The project was originally slated to have about 500 townhome-style units. Ultimately fewer than half that amount were built.

    Once development stopped, "revenues needed to be generated to cover up expenses," Deanna Meixner, accountant for Meadows from 2002 to 2009, told investigators. During a 3.5-year period that started in April 2008, Meadows' operations filed 509 liens on the 200 units in the development.

    And since 2008, the developer failed to pay association fees for his own units and should not have had a position on the association board, but he disregarded bylaws, investigators reported.

    One of Meadows' employees told investigators that Meadows created a "well-oiled machine" dedicated to cranking out estoppels letters, foreclosure notices, attorney fees, utility charges and association dues and fees. One owner, Sandra Friedle, faced $31,612 in liens for infractions such as a bent window screen.

    Another accountant who worked for Meadows, Sandra Andrews, told authorities that transferring funds from the homeowner association to Meadows companies "occurred on a routine basis." She is quoted in the investigation report saying she felt as though there was a "shell game going on."
For the story, see Bimini Bay developer charged with fraud.

See also, The Lakeland Ledger: HOA president accused of $500,000 theft.

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