The Hammocks is settling for $3.5 million another lawsuit against the homeowners association’s former law firms.

The firms had allegedly waged a battle against investigators who were looking into allegations of fraud against an ex-HOA president. The settlement, which isn’t final until approved by the judge, marks the fourth with former HOA attorneys in the wake of an alleged massive scheme by former board members to pillage association coffers.

In 2022, police arrested former HOA President Marglli Gallego and three former board members on charges they hired bogus contractors that did no work, and then misappropriated the association’s payments to the contractors, according to investigators’ arrest affidavit. All five charged have pleaded not guilty. Gallego’s husband, who was also charged, allegedly led many of the purported vendors, the affidavit says.

Since the arrests, court-appointed receiver David Gersten has overseen the Hammocks and filed four lawsuits against former HOA attorneys for their alleged role in the scheme and Gallego’s criminal defense counsel. The Hammocks, one of Florida’s biggest HOAs, is home to over 18,000 residents across 3,800 acres in West Kendall.

Last year, Gersten sued law firm Rasco Klock Perez & Nieto and attorney Hilton Napoleon II, as well as his law firm, Hilton Napoleon II P.A., for legal malpractice and unjust enrichment. Former HOA leadership had retained Rasco Klock and Napoleon from 2020 to late 2022 to help with litigation against investigators who were checking into Gallego’s dealings, and to push back in court against subpoenas for HOA records.

Napoleon is described as a former partner at Coral Gables-based Rasco Klock in court records, though he testified in a deposition that he was an independent contractor for the firm. Napoleon, who now has his own private practice, no longer affiliated at all with Rasco Klock, but he is still covered by the settlement.

The settlement payout is expected to be covered by Rasco Klock’s legal malpractice insurer. Under the agreement, Rasco Klock and Napoleon admit to no wrongdoing or breach of duty.

According to Gersten’s complaint, Rasco Klock filed defamation and civil rights lawsuits against Miami-Dade County police officers who were pursuing a criminal investigation into Gallego, as well as defamation suits against homeowners who had concerns about board malfeasance. The suits were filed on behalf of Gallego and the HOA as a whole, according to Gersten’s complaint. The law firm “hastily” filed the suits without a “diligent investigation” into the allegations against Gallego, which would have revealed that she and other board members weren’t acting in the HOA’s best interest, according to Gersten’s complaint.

Also, Rasco Klock and Napoleon litigated against investigators’ subpoenas for HOA records and were involved in the former board’s attempt to quash homeowners’ election recall effort, Gersten’s suit says. Homeowners had complained that polls closed early during the 2022 board election.

Napoleon declined comment for this story, and Rasco Klock didn’t immediately return a request for comment.