New program addresses condo fraud

Article Courtesy of Forum Publishing Group

By CHRIS GUANCHE

Published September 13, 2007 

For condominium associations and unit owners, finding the proper authority to investigate allegations of fraud can often prove difficult.

Because condos are privately governed by their associations, some police departments have declined to investigate condo association problems, citing them as civil issues. The lack of a clear outlet to carry out fraud investigations was frustrating to many owners, said state Rep. Julio Robaina, R-Miami.

"[Unit owners] were told that it was a civil matter because there really was no law enforcement agency that investigated that type of fraud, and they were told they had to file a civil lawsuit," Robaina said.

A new condo fraud pilot program championed by Robaina is in place in Miami-Dade County and could soon serve as a model for other counties. Robaina worked with agencies such as the Department of Business and Professional Regulation and the Florida Department of Law Enforcement to organize a one-day training for detectives from all of Miami-Dade's municipal police departments. Robaina said part of the training session's goal was to condition officers to investigate condo-fraud issues seriously.

Under the program, condo owners fill out a checklist, which is available online, and a local police department will deliver the reports to the state condo ombudsman's office, which will then screen the complaints and send them back to police for further investigation. Although Broward County is not part of the pilot program, Robaina said police departments in Fort Lauderdale and Hallandale Beach are independently investigating allegations of condo fraud, without the assistance of the condo ombudsman's office.

Robaina said he thinks using police departments instead of forming a new investigative agency is a more effective way to deal with condo fraud.

"Bottom line, it's grand theft and it's fraud. That's what they're supposed to investigate," Robaina said. "Since condo fraud falls under grand theft ... it's a natural fit."

However, determining what qualifies as fraud can be tricky, said the state's assistant condo ombudsman, Bill Raphan.

"The majority of the [complaints] that have been coming in are not criminal activities," Raphan said. "They seem to be mismanagement or financial issues that don't come up to the level of a criminal act."

Although Raphan's office currently is not investigating any claims from counties outside the pilot program, he said other counties can use the checklist as a template for their own investigations. The checklist asks for items such as board-member contact information, as well as information about anyone who may have witnessed alleged wrongdoings.

With several recent condo-fraud arrests in both Broward and Miami-Dade, Raphan said he thinks the program has been effective and will be a long-term success.

"Boards are going to be more careful," he said. "This gives an avenue for people to be able to bring [fraud] out."