Condos and HOAs
Living with Rules
by: Lisa Magill, Esq. February 19th, 2014 | 7:20 AM
About 2 ½ years ago I wrote about a case involving the Wellesley at Lake Clark Shores HOA which lost out on collecting close to $2,000 in interest and late fees and also lost out on collecting a whopping $10,000 in attorney’s fees due to bad recordkeeping. The Court, in that case, said that the association’s accounting methods were “woefully inadequate” to collect money as a result of the Claim of Lien filed against the property.
Another case with a similar result was recently issued by the Fourth District Court of Appeal. In that case, Plaza 3000 had problems with a particular owner over the years. Maintenance assessments were rarely, if ever, paid on time and they were always arguing what was actually due and owing. The lot owners complained that Plaza didn’t credit checks on a timely basis and that resulted in improper interest charges against the account. Meanwhile, the owners often marked checks with a restrictive endorsement (i.e. “paid in full”).
Plaza wound up recording a claim of lien and commencing foreclosure proceedings against the owners. It claimed there was approximately $26,000 due on the account, some of which for interest charges.
The owners filed several counterclaims in response as well as raised many affirmative defenses. One of the counterclaims was for Slander of Title. Slander of Title occurs when someone falsely alleges an ownership interest in the property of another, or when someone disparages the property interest of another. The elements of slander of title claims are:
(1) Defendant communicated to a third person;
(2) A statement disparaging plaintiff’s title;
(3) The statement is untrue; and
(4) Defendant’s communication caused plaintiff to suffer actual damages.
The owners claimed that the claim of lien recorded in the public records and the lis pendens recorded as a result of the foreclosure slandered title to their property. The trial court (lower court) dismissed this counterclaim because they found that the owner failed to allege actual damages (element #4). The appellate court disagreed and found that if the lien prevented the owners from obtaining a conventional loan that meant they had to pay higher loan costs and higher interest. The owners also claimed that they lost a contract to sell the property, couldn’t rent out the property and suffered from credit problems. These were all special damages that supported the counterclaim.
The appellate court reversed an award for attorney’s fees for Plaza 3000, since the trial court didn’t make a finding that the counterclaim was “completely frivolous or entirely lacked merit”.
In the end the appellate court found that Plaza 3000 didn’t prove it was owed any portion of the $26,000 it included in the claim of lien and since Plaza refused to accept payments tendered by the owners (even with the restrictive endorsement) it couldn’t collect interest or attorney’s fees on any assessments that came due after the claim of lien was filed.
This case again shows the importance of crossing “t’s” and dotting “i’s” when it comes to accounting records and the obligation to accept payments on account, even if for less than the full amount due.
Story and comments/reaction: http://blogs.sun-sentinel.com
Saturday, February 22, 2014
Friday, February 14, 2014
Chiropractor faces IRS bribe charge
BOSTON -- A 55-year-old Lowell chiropractor was arrested Thursday on a charge of bribing an IRS auditor to ignore two improper deductions -- payoffs to two women he inappropriately touched during medical appointments -- on his 2011 income-tax form.
A probable-cause hearing is scheduled for March 5 in U.S. District Court, according to U.S. District Attorney Carmen Ortiz.
Stephen D. Jacobs, of Lowell, is charged with bribery of a public official. The complaint alleges Jacobs paid an auditor $5,000 in cash to ignore the deductions, which were in fact payments Jacobs made to two different women because he touched them inappropriately during medical treatments in 2011 and 2012.
Jacobs could not be reached for comment at his Lowell office, his cellphone or via email.
According to court documents, an IRS agent was assigned to examine Jacob's federal income-tax form for 2011. The agent reviewed a number of issues, including Jacob's student-loan expenses, business expenses, gross receipts, bank statements and other expenses.
Before their initial meeting, Jacobs allegedly called the agent to confirm the appointment. During the conversation, Jacobs inquired whether the agent had the authority to handle issues on his own.
During the Aug. 6 meeting at Jacobs' office at 16 Pine St., Lowell, several expenses were questioned. Jacobs allegedly admitted he made $5,000 in payments to two different women because he touched them inappropriately during medical-treatment sessions in 2011 and 2012, according to court documents.
When the agent disallowed the expenses, Jacobs allegedly became agitated and asked the agent, in essence, if there were anything he could do for him.
Jacobs allegedly asked, "... you are on the front line, can't we just deal with this...''
On Aug. 13, the agent made a recorded call to Jacobs, advising him they could deal with the $5,000 payments to the women at their next meeting.
During a Sept. 25 meeting, Jacobs was told the $5,000 in payments to the women were disallowed expenses. When the agent then requested other documentation for other personal and motor-vehicle expenses, Jacobs became upset, saying, "...do you want a bribe. Do you want me to pay you..."
The agent acknowledged he was willing to accept cash to terminate the examination. Jacobs allegedly offered the agent $5,000 to end the examination. They agreed to meet later that day to complete the transaction.
Later that day, at a meeting telectronically recorded by video and audio, Jacob allegedly paid the agent $5,000 in cash and the agent handed over a "no-change" audit letter.
Read more: http://www.lowellsun.com
A probable-cause hearing is scheduled for March 5 in U.S. District Court, according to U.S. District Attorney Carmen Ortiz.
Stephen D. Jacobs, of Lowell, is charged with bribery of a public official. The complaint alleges Jacobs paid an auditor $5,000 in cash to ignore the deductions, which were in fact payments Jacobs made to two different women because he touched them inappropriately during medical treatments in 2011 and 2012.
Jacobs could not be reached for comment at his Lowell office, his cellphone or via email.
According to court documents, an IRS agent was assigned to examine Jacob's federal income-tax form for 2011. The agent reviewed a number of issues, including Jacob's student-loan expenses, business expenses, gross receipts, bank statements and other expenses.
Before their initial meeting, Jacobs allegedly called the agent to confirm the appointment. During the conversation, Jacobs inquired whether the agent had the authority to handle issues on his own.
During the Aug. 6 meeting at Jacobs' office at 16 Pine St., Lowell, several expenses were questioned. Jacobs allegedly admitted he made $5,000 in payments to two different women because he touched them inappropriately during medical-treatment sessions in 2011 and 2012, according to court documents.
When the agent disallowed the expenses, Jacobs allegedly became agitated and asked the agent, in essence, if there were anything he could do for him.
Jacobs allegedly asked, "... you are on the front line, can't we just deal with this...''
On Aug. 13, the agent made a recorded call to Jacobs, advising him they could deal with the $5,000 payments to the women at their next meeting.
During a Sept. 25 meeting, Jacobs was told the $5,000 in payments to the women were disallowed expenses. When the agent then requested other documentation for other personal and motor-vehicle expenses, Jacobs became upset, saying, "...do you want a bribe. Do you want me to pay you..."
The agent acknowledged he was willing to accept cash to terminate the examination. Jacobs allegedly offered the agent $5,000 to end the examination. They agreed to meet later that day to complete the transaction.
Later that day, at a meeting telectronically recorded by video and audio, Jacob allegedly paid the agent $5,000 in cash and the agent handed over a "no-change" audit letter.
Read more: http://www.lowellsun.com
Saturday, February 8, 2014
IRS Audit of Local VFW Angers Post Commander
The commander of Washington VFW Post 2661 said an ongoing IRS audit of his organization is a government intrusion.
“Honestly, I think it’s a bunch of BS,” Commander Kurt Gansmann said, adding, “I definitely feel like they are overstepping their bounds.”
It’s offensive that the IRS would intrude on an organization made up of people who put their lives on the line for the country, he said.
Gansmann added, “These politicians sit up there and make millions. For what? What are they doing? They’re not defending this country. We are.”
It appears that the IRS is targeting the VFW since this is the second post the federal agency has looked into in the St. Louis region recently. The other one was in Wentzville, he said.
VFW Post 2661 Senior Vice Commander Steve Graves also raised concerns about the IRS audit.
“Why pick on us? Graves asked.
It appears the IRS is “questioning the integrity” of the VFW and other veterans organizations, such as the American Legion, Graves added.
IRS audits of veteran organizations, such as the VFW and the American Legion, have been a national controversy recently.
Graves said an IRS official spent four days at the Washington VFW Post last week combing through documents.
“She was very diligent,” Graves said.
The Missourian sought comment from the IRS on the matter. But IRS spokesman Michael Devine wrote in an email that, “Strict privacy laws protect every individual, business entity and exempt organization from unauthorized disclosures of details of their relationship with the IRS. Unless there is public record, such as court records or documents filed in the public domain, we cannot discuss tax matters publicly.”
Audit
Gansmann said the local VFW has never taken anything it should not take, adding that the Post is run in a professional manner.
As the commander, he said he will not tolerate “shenanigans” at the Post.
“I don’t play around,” he asserted.
There are only three employees at the local VFW, and they are paid a small amount, Gansmann pointed out.
Audits have been conducted on the VFW before, but this one is more extensive, Gansmann said. The IRS is seeking information to see if members are eligible to be veterans, he added.
“She’s going through stuff that has nothing to do with taxes,” Gansmann said. “It’s getting very aggravating.”
And now the IRS official will be coming back to the VFW Post on Feb. 25 to gather more information as part of the inquiry.
The agent was from Town and Country, and she wanted to see meeting minutes, financial documents and membership records, Graves said.
Rather than targeting volunteer veterans organizations made up of people who believe in their God and country, the IRS should spend its time looking into corruption and mishandling of funds, he said.
It is not as though the VFW “funnels a lot of money” through its operation, he added.
The local Post files its tax returns, and there is much oversight within the organization, which has a board that Graves serves on, he said.
Still, Graves said the VFW post will comply with the audit since the IRS is a government organization. The IRS may be checking to see that the Post is run as a nonprofit organization, Graves said, adding that the organization is indeed run as such.
The local VFW Post is now working to gather the remaining documents that the auditor will seek when she returns Feb. 25, Graves said. Those documents include a full list of members, service dates, how much they pay in dues and whether they are current on dues, he said.
It is a lot of work compiling the information, Graves said, adding that the post has been there 75 years and there are members who have been in for 50 years.
“I’ve got 80-year-old members here,” Graves said. “I don’t remember when they were in the service.”
The IRS should be able to get much of this information on its own, Graves asserted.
VFW Quartermaster Mike Corbett said the VFW will successfully complete the review, adding that the last IRS audit was done about 20 years ago in 1993.
The IRS agent has been easy to work with and is just doing her job, Corbett noted.
“They are very thorough and go line by line,” Corbett said.
But he said the agent has not been harassing the VFW and has been accommodating with her requests.
http://www.emissourian.com
“Honestly, I think it’s a bunch of BS,” Commander Kurt Gansmann said, adding, “I definitely feel like they are overstepping their bounds.”
It’s offensive that the IRS would intrude on an organization made up of people who put their lives on the line for the country, he said.
Gansmann added, “These politicians sit up there and make millions. For what? What are they doing? They’re not defending this country. We are.”
It appears that the IRS is targeting the VFW since this is the second post the federal agency has looked into in the St. Louis region recently. The other one was in Wentzville, he said.
VFW Post 2661 Senior Vice Commander Steve Graves also raised concerns about the IRS audit.
“Why pick on us? Graves asked.
It appears the IRS is “questioning the integrity” of the VFW and other veterans organizations, such as the American Legion, Graves added.
IRS audits of veteran organizations, such as the VFW and the American Legion, have been a national controversy recently.
Graves said an IRS official spent four days at the Washington VFW Post last week combing through documents.
“She was very diligent,” Graves said.
The Missourian sought comment from the IRS on the matter. But IRS spokesman Michael Devine wrote in an email that, “Strict privacy laws protect every individual, business entity and exempt organization from unauthorized disclosures of details of their relationship with the IRS. Unless there is public record, such as court records or documents filed in the public domain, we cannot discuss tax matters publicly.”
Audit
Gansmann said the local VFW has never taken anything it should not take, adding that the Post is run in a professional manner.
As the commander, he said he will not tolerate “shenanigans” at the Post.
“I don’t play around,” he asserted.
There are only three employees at the local VFW, and they are paid a small amount, Gansmann pointed out.
Audits have been conducted on the VFW before, but this one is more extensive, Gansmann said. The IRS is seeking information to see if members are eligible to be veterans, he added.
“She’s going through stuff that has nothing to do with taxes,” Gansmann said. “It’s getting very aggravating.”
And now the IRS official will be coming back to the VFW Post on Feb. 25 to gather more information as part of the inquiry.
The agent was from Town and Country, and she wanted to see meeting minutes, financial documents and membership records, Graves said.
Rather than targeting volunteer veterans organizations made up of people who believe in their God and country, the IRS should spend its time looking into corruption and mishandling of funds, he said.
It is not as though the VFW “funnels a lot of money” through its operation, he added.
The local Post files its tax returns, and there is much oversight within the organization, which has a board that Graves serves on, he said.
Still, Graves said the VFW post will comply with the audit since the IRS is a government organization. The IRS may be checking to see that the Post is run as a nonprofit organization, Graves said, adding that the organization is indeed run as such.
The local VFW Post is now working to gather the remaining documents that the auditor will seek when she returns Feb. 25, Graves said. Those documents include a full list of members, service dates, how much they pay in dues and whether they are current on dues, he said.
It is a lot of work compiling the information, Graves said, adding that the post has been there 75 years and there are members who have been in for 50 years.
“I’ve got 80-year-old members here,” Graves said. “I don’t remember when they were in the service.”
The IRS should be able to get much of this information on its own, Graves asserted.
VFW Quartermaster Mike Corbett said the VFW will successfully complete the review, adding that the last IRS audit was done about 20 years ago in 1993.
The IRS agent has been easy to work with and is just doing her job, Corbett noted.
“They are very thorough and go line by line,” Corbett said.
But he said the agent has not been harassing the VFW and has been accommodating with her requests.
http://www.emissourian.com
Bad bookkeeping
Sharon Township's financial records are such a mess that Ohio Auditor Dave Yost has deemed the township in northern Franklin County to be "unauditable."
"Poor records lead to poor service for taxpayers," Yost said in a statement released by his office. "Auditable records must be provided to complete the audit and ensure accountability."
Sharon Township had insufficient records to allow for an audit of a two-year period ending Dec. 31, 2012. The state has given township officials 90 days to provide the necessary financial documents or face possible legal action.
The township joins about 13 schools, municipalities and other local entities deemed to by unauditable by Yost. The designation does not mean tax dollars have been misspent, just that it's impossible to account for the money.
- See more at: http://dispatchpolitics.dispatch.com
"Poor records lead to poor service for taxpayers," Yost said in a statement released by his office. "Auditable records must be provided to complete the audit and ensure accountability."
Sharon Township had insufficient records to allow for an audit of a two-year period ending Dec. 31, 2012. The state has given township officials 90 days to provide the necessary financial documents or face possible legal action.
The township joins about 13 schools, municipalities and other local entities deemed to by unauditable by Yost. The designation does not mean tax dollars have been misspent, just that it's impossible to account for the money.
- See more at: http://dispatchpolitics.dispatch.com
Friday, February 7, 2014
Merrick Bookkeeper Pleads Guilty to Stealing More Than $450K From Her Employer
Merrick, NY - February 7th, 2014 - Nassau County District Attorney Kathleen Rice announced that a Merrick woman has pleaded guilty today to stealing more than $450,000 from the real estate firm where she worked as a bookkeeper by forging her boss’s signature on checks made out to herself and by arranging automatic payments from company accounts to pay personal bills.
Joanne Rocca, 68, of Merrick, pleaded guilty today to Grand Larceny in the 2nd Degree (a C felony) before Nassau County Court Judge Christopher Quinn. Prosecutors are requesting a sentence of 1-1/3 to 4 years in prison and restitution of $164,432.88. Prior to the filing of charges, Rocca made restitution in the amount of $292,000. Rocca is due back in court on June 6 for sentencing.
“Employees that steal this much money damage the trust placed by employers in their employees and put the fiscal health of companies and the jobs of fellow employees at risk,” DA Rice said.
DA Rice said that between July 2004 and April 2011, Rocca used her position as the bookkeeper for a Plainview-based building maintenance and real estate firm to embezzle more than $456,000 from her employer by arranging automatic payments from the company’s accounts to pay personal bills and forging the owner’s signature on company checks. She used the stolen cash by pay her cable television, gasoline, grocery, and utility bills, and to purchase home furnishings.
The theft was discovered in May 2011 when her employer discovered a company check made out to Rocca’s American Express account on her desk while she was at lunch. Though Rocca denied using company money to pay her own bills, an internal review of the company’s checkbook, bank statements, and accounts revealed the extent of Rocca’s theft. DA investigators made the arrest on May 8, 2013.
Assistant District Attorney Peter J. Mancuso of DA Rice’s Government & Consumer Frauds Bureau is prosecuting the case. Rocca is represented by Anthony La Pinta, Esq.
http://www.longisland.com
Been stolen from? Want to talk about better bookkeeping procedures? Feel free to drop me an email.
Joanne Rocca, 68, of Merrick, pleaded guilty today to Grand Larceny in the 2nd Degree (a C felony) before Nassau County Court Judge Christopher Quinn. Prosecutors are requesting a sentence of 1-1/3 to 4 years in prison and restitution of $164,432.88. Prior to the filing of charges, Rocca made restitution in the amount of $292,000. Rocca is due back in court on June 6 for sentencing.
“Employees that steal this much money damage the trust placed by employers in their employees and put the fiscal health of companies and the jobs of fellow employees at risk,” DA Rice said.
DA Rice said that between July 2004 and April 2011, Rocca used her position as the bookkeeper for a Plainview-based building maintenance and real estate firm to embezzle more than $456,000 from her employer by arranging automatic payments from the company’s accounts to pay personal bills and forging the owner’s signature on company checks. She used the stolen cash by pay her cable television, gasoline, grocery, and utility bills, and to purchase home furnishings.
The theft was discovered in May 2011 when her employer discovered a company check made out to Rocca’s American Express account on her desk while she was at lunch. Though Rocca denied using company money to pay her own bills, an internal review of the company’s checkbook, bank statements, and accounts revealed the extent of Rocca’s theft. DA investigators made the arrest on May 8, 2013.
Assistant District Attorney Peter J. Mancuso of DA Rice’s Government & Consumer Frauds Bureau is prosecuting the case. Rocca is represented by Anthony La Pinta, Esq.
http://www.longisland.com
Been stolen from? Want to talk about better bookkeeping procedures? Feel free to drop me an email.
Wednesday, February 5, 2014
Bookkeeper accused of fraudulent check writing
FARMINGTON (KRQE) – A Farmington woman who works as a bookkeeper for two small businesses is accused of stealing from them. Mary Hawkins, 65, is being held on 40 felony fraud and forgery counts. San Juan County sheriff’s officials say she wrote more than 220 fraudulent checks and embezzled more than $344,000 from the businesses over a two-and-a-half-year span starting in 2011. A CPA for one of the businesses noticed several checks weren’t authorized by the owner and had been written out to Hawkins.
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