Financial Firestorms Surviving Fraud & Neglect

In an upscale lakeside community near Orlando, the pace of home sales unaccountably accelerated in 2009. At first, the new owners paid their assessments and fees. Then some of the homes were rented to subtenants, and others changed hands again. Their monthly fees went into arrears, and assessments became delinquent.

“It was a year or two before we realized anything strange was going on,” recounts Sue Carpenter, who at the time was vice president of marketing for the Orlando office of Associa, Community Management Professionals, Inc., and remains a consultant for the firm. “It was a while before we were able to link them together,” she says. “They were in different names but we saw where the mail was going. We noticed they didn’t pay. Then we started getting phone calls from the IRS and the FBI.”

The board learned later that a buyer from outside Florida had purchased 23 of the community’s 362 homes and put them in other peoples’ names, but never paid any mortgages or assessments. “She just kept flipping them,” Carpenter says. “She was part of a group with a New York real-estate company that was putting the houses in the names of clients in New York who thought they were buying houses in Florida as an investment.”

As the scammer’s fraud unraveled, she was trying to leave town when the authorities handcuffed her at the airport. “There’s a happy ending,” Carpenter says. “She’s in jail now.”

Community Support

Despite the delinquencies, the community was able to cope because “they had a fantastic board of directors,” Carpenter says. “The board members were focused on going through the collections process, having liens put on, and filing for foreclosure when they could.

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