However, hundreds of people in Maryland may have a whole new reason to hate their local HOA, after a woman named Sarah Chester was convicted of stealing more than half a million dollars from the HOAs she worked for, using the money to fund a lavish lifestyle that included European vacations. Now, she's looking at 20 years behind bars and some pretty hefty fees as a result. Keep reading to learn more.
According to Realtor.com, Chester was arrested after the president of one of the HOA boards her company was hired by began looking into inconsistencies in the books. "It’s been stressful and time-consuming, among many things, from being a victim of her financial crimes," the board member said after the woman's conviction. "She caused so much damage."
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How Was She Able to Steal from the HOAs
To cover her tracks, it sounds like she created fake bank statements to hide the fact that she was transferring money between the HOA accounts to keep anyone from catching on. She was able to get away with this for so long because she was responsible for reconciling the bank accounts, approving invoices, and cutting checks, something one expert who spoke to the publication said should actually be handled by three separate people.
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How to Avoid Fraud in Your HOA
These types of associations can also help build a stronger sense of community, as they hold neighborhood meetings with some regularity. If you're looking for a home and considering one in an HOA but are a little worried about becoming a victim of fraud, First Service Residential says there are a few things you can do to protect yourself, including:
Getting involved in the organization and making sure that they are vetting new vendors and requiring two signatures for bank transfersRequest an annual auditMake sure they carry fidelity insuranceLearn about the red flags to look out forDisclaimer: This article is for informational purposes only and does not constitute financial advice.
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