I was fortunate to attend several quality seminars last week at CAI’s National Law Seminar. One of the more noteworthy sessions was presented by an Ohio HOA Lawyer, Darcy Mehling Good and a Missouri attorney, Sarah M. Bueltmann.  Good and Bueltmann took great care in explaining the fraud problem in Associations as well as offering some of the methods to better understand the madness behind fraud, its perpetrators and the victims.  All in all, it was a helpful session and one in which I hope to rely in on discussing certain safeguards with my clients, their management professionals and others involved in the HOA/Condo world.

If you are not aware of all of the unfortunate headlines about someone stealing money from their neighbors, WAKE UP, fraud in HOAs and Condos is rampant.  A simple Google search for “HOA fraud” should provide you with evidence enough of the problem.  In addition, my friend Robert DeNichilo recently wrote an article about some of his experience with the fraud beast in HOAs and Condos.  It’s a good read and a straightforward, but eloquent, summary of the issue.

Of particular interest to me at the seminar was Good and Bueltmann’s research and excellent application of that research about the fraud triangle.  The discussion was helpful in identifying why folks perpetrate frauds, a bit about how their minds work and how Associations and Condos can put in proper safeguards to protect the community’s money from the fraud monster.

Toward the end of the talk, my colleague and friend from our Tucson office leaned over to me to show me something in his notes.  Adam had drawn me a picture and was attempting to simplify Good and Bueltmann’s complex treatise on all things fraudulent and triangular with a simpler analysis.  Adam’s helpful aide posted here and to the right.

For a couple of public school guys, Adam’s graphic was certainly instructive, and perhaps in its simplicity so helpful to me.  Adam’s summary of this unique human behavior is represented by the graphic at the right – enter the Greed Circle.

Good job to my colleagues from Ohio and the Show-Me-State.  Thanks to Robert for his thoughts.   And a special thanks to Adam for making it all so clear.

Whether it’s triangles or circles, everyone in our HOA/Condo industry would do well to learn more about the problem, the potential perpetrator and the solutions.

Tags: HOA Fraud

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