Collier judge urges HOAs, American Property Management to work together in condo fraud suit

Dan Glaun Michael Braun
Naples Daily News

Dozens of Lee and Collier county residential developments will have to wait a little longer to learn just how much money they lost in an alleged fraud scheme.

And first, they'll have to work with lawyers for their former management company, which they've accused of stealing from them.

The 35 associations have spent months asking a 20th Judicial Circuit court to grant them access to Wells Fargo bank accounts they say were hijacked by American Property Management Services. The process has been slowed by Wells Fargo's opposition to releasing bank records without a confidentiality order and by disputes, including allegations that the associations' attorney, Jason Mikes, wrongfully took records from AMPS's Naples offices.

Those disagreements continued Tuesday in a Naples courtroom. APMS attorney Erik Matheney evinced frustration when Mikes attempted to introduce evidence he had not previously shared, and the parties could not come to an agreement when given a half hour recess to do so by Judge Lauren L. Brodie.

By lunchtime, Brodie seemed to have had enough.

"I don't want to have another hearing and be told you haven't spoken," Brodie said.

Judge Lauren L. Brodie speaks during an evidentiary hearing on a lawsuit against American Property Management Services on Tuesday, April 12, 2022, at Collier County Courthouse in Naples.

Bank dispute

The associations are suing APMS, claiming the company hijacked their bank accounts and stole money they need to pay for vendors, utilities and emergency expenses. APMS has denied all wrongdoing, saying in court filings that its clients were aware and approved of its actions.

At the center of the dispute are 89 frozen Wells Fargo bank accounts registered in APMS's name. The associations are seeking direct access to those accounts, saying they were used to store their funds and rightfully belong to them. The bank has said it cannot remove funds from those accounts or share account records without a court order.

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Rosemary Clerico, president of the Bridgewater Bay community association, testified that the lack of access to their financial records has left the association unable to do its taxes or file a claim with its insurance company for the money allegedly stolen by APMS.

Rosemary Clerico, president of the Bridgewater Bay community association, speaks during Tuesday's hearing  in Naples.

The association had about $600,000 in unpaid bills before raising additional funds from residents and taking out a loan, Clerico said.

"That's what let us keep the lights on," she said.

Dozens of residents of the associations filled the courtroom benches, muttering in disapproval when Matheney said that Mikes had not proved that his clients were the rightful owners of the accounts. APMS co-owners Orlando Miserandino Ortiz and Lina Posada were not in the courtroom. Mikes has said that the associations have no idea where their former managers are and have not been able to reach them for months.

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Info exchange

Before the fate of the Wells Fargo bank accounts can be resolved, the parties will have to share records with each other — a process that so far has not been simple.

Mikes is in possession of hundreds of boxes of documents that APMS claims were wrongly removed from its former Naples office. The associations believe APMS still controls a server that contains their electronic financial records. And Wells Fargo has said it will not release further account information to the associations without a protective order guaranteeing confidentiality.

Mikes agreed to count the number of boxes in his possession by Thursday to allow APMS to estimate how much it would cost to scan and copy the documents, and the parties indicated they had agreed on the language for a protective order that would prevent either party from releasing the Wells Fargo bank records.

Another hearing on the issue is scheduled for April 21, at which Brodie expects the parties to come to an information-sharing agreement.

Contact us: If you think you have been affected by HOA management fraud, we'd like to hear from you

Erik Matheney, lawyer for American Property Management Services, during the evidentiary hearing on Tuesday, April 12, at Collier County Courthouse in Naples.

In January, the associations sued APMS, claiming Ortiz placed client money in Wells Fargo bank accounts that only he could access. According to the lawsuit, Ortiz directed association officials to sign signature cards for the bank accounts but never submitted them to the bank, effectively preventing association officials from obtaining information on their accounts.

The associations claim that when they requested access to their money, APMS provided forged bank statements and refused to turn over control of the accounts.

That only Ortiz is listed as the owner of the accounts has complicated the associations' efforts to find out how much money was allegedly embezzled. Wells Fargo has opposed the plaintiffs' petitions for an emergency injunction granting them control of the accounts, leading to a stop-and-start process that has frustrated association leaders.

In January, Brodie granted a temporary restraining order freezing the accounts but said the associations could not access the account statements until an evidentiary hearing.

Drained accounts

Following a hearing on Feb. 25, Brodie ruled that the plaintiffs should be provided the current balances of the accounts but did not grant them control of the money or direct access to bank records.

Those balance statements showed that of the 89 association accounts, 23 were completely emptied and closed. According to Mikes, other accounts showed much lower balances than APMS had reported when it still represented the associations, with total losses exceeding $8 million.

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The January lawsuit is not APMS's only legal issue.

State regulators said in late March that they were seeking to revoke APMS's community association manager license, as the Naples Daily News / The News-Press reported that APMS and Ortiz had escaped an earlier embezzlement allegation with a pair of $1,000 fines, which were never paid.

Some of the associations say that losing access to their money has forced them to raise resident fees to pay vendors such as lawn maintenance and pool companies. 

Breaking news reporter Michael Braun contributed to this report. Connect with him: MichaelBraunNP (Facebook), @MichaelBraunNP (Twitter) or mbraun@news-press.com. 

Criminal justice investigative reporter Dan Glaun can be reached at daniel.glaun@naplesnews.com or on Twitter @dglaun.