Nine Fairfield County Condo Complexes Claim To Have Been Ripped Off By Property Manager For More Than $1 Million
Nine southern Connecticut condo complexes managed by the same Westport company claim that more than $1 million was stolen from them.
The claim is contained in a Superior Court Law Suit filed by their insurer, Community Association Underwriters Of America, which is based in Pennsylvania, against Consolidated Management Group and its former comptroller, David Liptak.
“The Plaintiff is entitled to a judgment against the Defendants Consolidated Management Group and David Liptak in excess of $1,000,000.00 plus interest, costs, treble damages and attorney’s fees,” says the suit, explaining that the insurer has to reimburse the eight condo complexes.
Liptak and Consolidated have declined to comment. Westport police are investigating but have not commented.
“Because of the ongoing investigation, I have been advised not to comment at this time,” Olaf Nelson, president of CMG told the Connecticut Post, and Nelson has declined to comment to CtCondoNews.
Consolidated Management ran a dozen Connecticut condo complexes including the following nine that were named in this suit:
Sound House Condominium Association, Inc., in Bridgeport
Clarmont Association, Inc., in Norwalk
Hills Condominium Association, Inc., Trumbull
Trumbull Townhomes Association, Trumbull
Flax Hill Section I Condominium Association, Inc., in Norwalk
Strathmore Lane Condominium Association,in Norwalk
Whitney Glen Condominium,in Westport
Crowne Pond Association, Inc., Wilton
and Melody Lane Condominium Association, Inc., also Fairfield County
The management company – according to the state Consumer Protection Department – also managers three complexes in Greenwich: Ettl Park Condo Association, Pheasant Run, and Greenwich Green.
The suit claims a lack of financial controls, lack of security, lack of proper monitoring of finances, and failing to supervise David Liptak.
“The Defendant, David Liptak was an agent, employee and/or representative of the Defendant, Consolidated Management Group as the Controller for the business and had unlimited access to the Associations’ bank accounts,” says the suit brought by Windsor Locks Attorney Stuart G. Blackburn. “Liptak removed monies from the Associations’ various financial accounts for his own personal financial gain,” says the suit.
What can be done if property owners suspect financial impropriety involving the condo board AND the property management company? At the complex where I live, the two entities seem to be very “cozy.” There is no hard evidence of any wrong doing, but many property owners have voiced suspicion. There is on transparency here — in spite of new Connecticut legislation. It would be great to have an independent audit, but the board oversees the financial audits — which is kind of like the fox watching the hen house. What can property owners do to ensure their investment is being properly governed/managed when it comes to finances? Maybe a how-to article on this in the CT Condo News would be very helpful to many condo owners. I don’t even know where to begin because of the tyranny at the top (property management and condo board whose membership never changes so the same people are in place year after year).
Every unit owner is entitled to receive copies of the monthly financial reports that should be prepared by the management company or the board if self-managed. To watch for wrongdoing, the bank statements and bank accounts reconciliation reports need to be studied to ensure the numbers match the reports. The board or management company may charge copying and time charges for providing the report. They may redact specifics on accounts receivable (past due unit owner accounts) as a matter of policy and privacy but should provide a summary of past due amounts by category, such as common charges, late charges, etc.
I am curious as to why an arrest is not being sought and a civil lawsuit has been filed instead.
It is under police investigation.
If we are one of the condo complexes being managed by Consolodated Management Group of Westport,Ct. would it be wise to terminate this company asap when their contract expires?
It is hard to answer that question. There are many factors including what changes they instituted, are they still a viable company, are you satisfied with their work, what do your attorneys say????
This is not the first time CMG has had a rouge employee. Michael Orr was caught and sentenced to 12 years in jail for stealing $450,000 from residents while Property Manager 2009-2010.
http://www.greenwichtime.com/local/article/Warrant-Property-manager-stole-450K-to-feed-1031261.php
And now this. I would recommend associations validate CMG still has a registration to operate as an association manager in CT and also check their insurance policy coverage, if they still have any at all.
Are they still covered for theft after the Michael Orr incident? Seems not, or why would condo assoc insurance company be suing CMG and Liptak directly?
Associations who have been with CMG during these two gross management oversights have a fiduciary duty to their associations to change management companies. There is a culture of theft, embezzlement, and lack of controls at the company. Perhaps CMG is charging lower management fees because they do not have to pay insurance policies, and therefore able to keep clients, but shame on the condo boards who stick with them. How short sighted, now they are stuck with the mess and their insurance policy costs will go up as a result. They will pay more in the end.
Lastly, will your condo association’s insurance providers continue your policy if CMG is your property manager? If they do, at what premium? There are not many providers out there and you can bet the insurers who are now stuck paying the estimated $1 to $2 million bill will not be happy.
Is it not just a matter of time before the law catches up with CMG and they are out of business, even if negligent Boards choose to stay to the bitter end and turn a blind eye to the criminal nature of the firm?
The boards should require two signatures on every check. The bank statements and bills paid and to be paid should be brought to the meetings and the numbers should be checked to make sure all is well.The condo boards should be more involved in the checkbook.Property managers should not be able to sign any checks.