Collier condo residents, officials not happy with decision in case involving alleged fraud
A Collier County judge's decision in a case involving the alleged embezzlement of possibly millions from nearly three dozen Collier and Lee county communities didn't go far enough for some in those communities.
A hearing Friday before Collier County Court Judge Lauren Brodie dealt with an emergency motion by 35 homeowner and condo association communities to expand their original Jan. 5 injunction against Naples-based American Property Management Services.
The judge ruled that representatives from the communities may see balances of accounts at Wells Fargo Bank linked to APMS, but not access remaining funds.
The hearing was one of several court actions filed against APMS in the past year alleging fraud, breach of contract and embezzlement.
"It's frustrating and unexpected," said Mike Trapani, who lives at Royal Bay Villas in Naples. "I would expect that the courts and the law would be like supporting us right now instead of leaving us hanging. I heard (Wells Fargo) is going to give us our balances, which does us no good. It just seems like we're having to defend ourselves."
The attorney for the communities agreed.
"This is incredibly disheartening," attorney Jason Hamilton Mikes, a Naples lawyer representing the condo and homeowners associations, said. "Aside from the fraud, aside from the theft, the very act of keeping these funds, accounts and records from these communities is a crime in itself punishable by jail and/or probation and fines ... times 35 neighborhoods."
As part of the suit by the 35 communities there is a temporary restraining order freezing the Wells Fargo accounts.
Additionally, courts have authorized the Collier County Sheriff's Office to remove Ortiz and APMS from office space at 8817, 8819 and 88235 Tamiami Trail East. Owners Lago Capital Investments posted an eviction notice at that site in January.
The communities had hoped that the judge would allow officers of the communities the ability to see the Wells Fargo account balances, but she stopped short of granting them access to other bank records and possession of funds remaining in their accounts.
"The bank statements and other account information would definitively prove the theft for all the communities (not just the dozen we have documentary evidence for now) and allow these communities to file claims with their insurers and maybe get some money back," Mikes said.
Affidavits filed in the case from a number of the community officials document their conversations with representatives of Wells Fargo that showed community operating and reserve accounts, thought by the officials to contain from $100,000 to $200,000, had been reduced, in some cases, to nothing.
Mikes hopes to have the matter continued before the judge by mid-April or early May.
Officials and residents from the affected communities were not pleased with Friday's outcome.
"That's our money in a bank account," Trapani, a former board member at Royal Bay Villas, said. "It's obvious that somebody ... is using (it) for their own good."
Condo and homeowner associations that entrust management companies give the businesses wide latitude, via a signed agreement, to pay bills, collect funds and perform other fiduciary roles. Funds collected include association fees paid by home and condo owners that can range from hundreds to thousands of dollars, usually paid quarterly.
In the suit against APMS the communities involved claim company owner Orlando Miserandino Ortiz misappropriated community funds and set up the Wells Fargo bank accounts in his and APMS' name only, in effect not allowing community representatives access.
“(O)ur association desperately needs our bank statements and any 'leftover' money in our accounts," said Royal Bay Villas Condo Association President Laura Rigsby. “A large majority paid first quarter to APMS (and) we believe that money is in our accounts locked down. Without the bank statements and access to this money we are struggling."
Mikes has outlined the impact of the allegations.
"APMS failed to pay most of the associations’ bills for several months," Mikes said in an email to The Naples Daily News and News-Press. "Things like landscaping are not such a concern. However, other issues are very troubling."
Mikes said by Bridgewater Bay owes Florida Power and Light more than $25,000. The company planned to shut off the electricity to the community Jan. 26 but for promises to pay.
Beyond regular services, Mikes said APMS collected healthcare insurance premiums from its employees for several paychecks, but did not pay the money to the healthcare insurer.
"Employees just received notice that their healthcare insurance was cancelled ... on Dec. 1, 2021, and they are stuck with all medical bills that came up in the 2 months since," he said.
It wasn't immediately clear how many people each property employs, who provides healthcare insurance and how many the lack of coverage affects.
Trapani said some community members at Royal Villas have the wherewithal to advance pay some fees and expenses to give the community cash flow to pay for services.
"We have 92 owners," Trapani said, adding that many are are senior citizens on fixed incomes, or Social Security and pensions can't afford to pay over and over. "You're not talking about the rich 1%."
Some of his community's service providers had complained about not being paid for months.
"The landscapers were not paid since September," Trapani said, adding that the landscaping company said APMS provided "excuses" during that time why payments had not been forthcoming, saying funds were sent to the wrong account and similar reasons.
He said no services have been cancelled or stopped, but the community has had to resort to getting a $75,000 loan, which will need to be paid back, to keep some services going.
Tripini doesn't fault association officials because part of the complaint against APMS is that documents showing account balances and payments were altered to show different amounts.
Mikes said the freezing of the Wells Fargo accounts was necessary to prevent more unauthorized transfers.
The current whereabouts of APMS owner Ortiz and Lina Munoz Posada, his wife and business partner, are unclear. Legal representatives for Ortiz and APMS have not responded to recent requests for comment.
"In all of this, where is this person?" Trapani said about Ortiz. "He's the one accused of all this, and he's nowhere to be found."