A property management company in the Naples area faces a $100K civil suit after alleged fraud, breach of contract and embezzlement.
NAPLES, Fla. – With potentially millions of dollars at risk, Collier and Lee counties community associations have a very vested interest in monitoring their property management companies.
At least 30 condo associations in Collier County are deep into forensic audits after news that their management company, American Property Management Services of Naples, is facing a $100,000 civil suit claiming fraud, breach of contract and embezzlement.
Many believe the fraud is spread far beyond one association, which was left with $10 in an account.
An attorney for some of the Collier County condo and homeowner associations offered suggestions on how communities can protect themselves.
Naples attorney Jason Hamilton Mikes suggests:
- Buy insurance in sufficient amounts to cover all funds that the association has in its various accounts: operating, reserve and investment. Types of insurance would include crimes, cybercrime, employee theft and directors and officers liability insurance. Ask your insurance agent what other coverage might be available.
- It’s OK to trust your management company and the vendors they refer to you, but be sure to have direct relationships with those vendors. Have frequent direct contact with your bankers, accountants, lawyers, insurance agents and others.
- If your association pursues legal action, stay in direct contact with your lawyer. If the association pursues insurance claims, make sure you are in direct contact with your agent and the claim representative and/or adjuster.
- Verify who is authorized to have access to association information, documentation and accounts. Ask that multiple signors be required to withdraw or transfer money, or make changes to accounts, agreements or policies.
- Frequently (once a week at least) check the association’s accounts to ensure all of the money is where it should be and that there are no suspicious debits or credits.
- Don’t allow one person to have online access to bank accounts with the ability to withdraw funds or make transfers.
- Don’t allow debit or credit cards in the name of the association.
- Don’t allow too many years to pass without having your association’s financial records audited by an independent certified public accountant.
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