The Board met in Executive Session on Friday, October 13, 2017, regarding the ongoing audit of the accounting records and supporting financial documents due to a financial discrepancy. Three members of the Finance Advisory Committee also attended the meeting. The fraud auditor from Associa has submitted his final written report. The fraud amount is about $110,000. The final report from Associa is concluded and all working papers along with the findings have been made available to the Board.
At 5:00 PM on October 11, 2017 the HOA filed a police report with the City of Indio Police Department (Indio Police) regarding the alleged fraud undertaken by staff.
The criminal case is now in the hands of the Indio Police. Just to confirm the process, Indio Police will review the information provided by the fraud auditor, and then decide whether to refer the case to the County of Riverside District Attorney (DA). The DA will then determine whether to prosecute. At this point, the criminal case is now in the hands of Indio Police and they will contact us if they need additional information. We will, of course, touch base with them to make sure everything is on track. It is the intention of both the HOA and Associa to prosecute all staff of Associa that participated in the fraud against Sun City Shadow Hills HOA.
Neither the HOA, nor Associa, nor DRM has released any names of the staff of Associa, DRM and PCM involved in the alleged fraud. Any names that are rumored to be involved is pure speculation.
Although there has been a written communication of an ex-employee of Associa, DRM and PCM working at a Sun City on the East coast, that Sun City is not managed by Associa or its affiliates, and neither the HOA nor Associa was contacted about a referral.
The Board is currently reviewing all documents about the fraud to determine what options are available going forward. The Board will also be discussing having a third-party audit based on all the facts presented.
All Associa companies, including DRM and PCM, have been put on notice as to possible future claims. In addition, the insurance carriers for the HOA have been put on notice as to possible future claims.
At the advice of legal counsel, the Board cannot disclose the persons involved in the fraud but will keep the homeowners informed of all information when available for release to the public. Also, for several reasons, such as legal liability, the Board cannot release information how the fraud was accomplished because it would reveal who was involved in the fraud. When legal counsel confirms that the HOA is legally protected, all such information will be released to the homeowners.
The Board understands that homeowners are requesting information about the people involved and how the fraud took place. We must ask for your continued patience as we let the process unfold so that we can ensure the HOA is legally protected while we also work to recoup all monetary damages that have occurred. This will take some time, but we will keep you informed as quickly as possible.
HOA Board of Directors