By Jan Bergemann

Published May 17, 2013


Believe me, EMBEZZLEMENT of funds is a really hot issue and actually happens more often than you think. You may ask: What are the main reasons that it happens so often? People know that there is very little punishment – if there is punishment at all. Rob a bank, steal $20,000 – and you will serve quite a few years in jail if caught. Steal $1.4 million from a condominium association – and six years after you were initially arrested there was still no trial. See the infamous Parker Plaza case: “Two co-defendants face trial in March, more than six years after arrests.”


There is a long list of big cases that made the headlines of the local newspapers [], but most of the cases never see the light of the day. Many complaints are just being dropped in exchange for reimbursement of embezzled funds.

In other cases board members are trying to cover up the misdeeds, claiming that publicity would decrease property values. Actually, I think it’s rather the opposite. Catching the bad guys means somebody is watching the bank!


BRIBES are another way to get rich quick. It seems attorneys and contractors are willing to grease the palms of board members. It goes even that far that these service providers are using illegal methods to get the “right” people elected to the board. Remember the Las Vegas HOA fraud case? (Click here to read the details). I am pretty sure it happens here in Florida as well. Quite a few of the folks involved in the Nevada fraud scheme fled to Florida when the FBI started the still ongoing investigation and are now working here – in Fraud Friendly Florida.


And what about KICKBACKS? Community associations are plainly inviting kickbacks! We are not necessarily talking money changing hands. Much more often it’s about providing free services for the board members, from the landscaper providing free landscaping for the president’s property to the pool guy servicing the community association pool – and servicing the board member’s private pool as well. Actually, the list of opportunities for kickbacks is endless.


And in most of these cases the owner were holding the bag, meaning that the owners had to fill the holes caused by the financial losses caused by these criminal acts!


And since owners are already paying dearly for the mistakes of banks – protected against liability by the so-called “Safe Harbor” provisions – we thought it would be a good idea to make sure the homeowners’ associations is protected against these kinds of financial losses and we made sure that this provision was added to the HOA REFORM BILL H7119:

FS 720.3033(5) The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this subsection, the term "persons who control or disburse funds of the association" includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the association.


It’s high time to protect the owners against financial losses. Most owners really didn’t move into Florida ’s community associations to pay their neighbors bills, make up for the losses caused by unpaid dues/foreclosures and a multitude of criminal acts that plague our associations.


Oh, by the way, let’s finally prosecute the bad guys –within a reasonable time frame. Let’s not postpone the trials until the perpetrators are dead or too old to stand trial. The statements we heard from law enforcement agencies and state attorney’s offices claiming that these are not criminal acts but civil contract issues are straight out “BALONEY.” I’m still looking for the contract that states that the folks in charge of the finances can steal the money without being prosecuted. Theft is theft – inside or outside of community associations!

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Jan Bergemann

Jan Bergemann is president of Cyber Citizens For Justice, Florida 's largest state-wide property owners' advocacy group. CCFJ works on legislation to help owners living in community

associations. He moved to Florida in 1995 - hoping to retire. He moved into a HOA, where the developer cheated the homeowners and used the association dues for his own purposes. End of retirement!


CCFJ was born in the year 2000, when some owners met in Tallahassee - finding out that power is only in numbers. Bergemann was a member of Governor Jeb Bush's HOA Task force in 2003/2004.


The organization has two websites to inform interested Florida homeowners and condo owners:

News Website:

Educational Website:

We think that only owners can really represent owners, since all service providers surely have a different interest! We are trying to create owner-friendly laws, but the best laws are useless without enforcement. And enforcement is totally lacking in Florida !

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