Arrest Over Alleged $800,000 HOA Fraud Emblematic of Law Enforcement’s New Mindset

The firm’s latest Miami Herald “Real Estate Counselor” column was authored by shareholder Shari Wald Garrett. The article, which is titled “Arrest Over Alleged $800,000 HOA Fraud Emblematic of Law Enforcement’s New Mindset,” focuses on the takeaways from a recent arrest in Palm City near Stuart in Martin County over the alleged theft of more than $800,000 from area homeowners associations. Her column reads:

. . . As reported in a recent article in The Stuart News and other newspapers in the region from Treasure Coast News, Scott Michael Brechbill has been charged with first-degree grand theft over $100,000, second-degree grand theft less than $100,000, organized fraud of $50,000 or more, and obtaining property less than $50,000. The Stuart resident is alleged to have taken more than $800,000 from HOAs within the Martin Downs Country Club community in Palm City, for which he served as property manager as the owner of C & M Property Management. He was taken into custody by the Martin County Sheriff’s Office on July 1 and has been released on a $2.1 million bond.

The investigations against Brechbill began in June 2023 when one of the sheriff’s office corporals met with a member of the homeowners association for the county club’s Starling Court community. The officer was informed that the HOA had recently hired a new property management company and discovered that large sums had been deposited from the association’s bank account into that of C & M.

A detective assigned to the case then held a meeting with all the board members, who provided the officer with multiple bank account statements showing large transfers between Starling Court and C & M. One director stated that he believed Brechbill was transferring funds from the HOA’s bank account into his personal account, according to the complaint affidavit.

The detective requested subpoenas from the State Attorney’s Office to obtain Starling Court’s complete bank statements and information from the financial institution where the large transfers were being sent. According to the article, this initially proved to be fruitless.

The detective eventually contacted Brechbill via telephone and was told that, as the property manager, he had used a company called Appfolio to streamline payments to and from the country club’s HOAs. When asked about the large transfers, he indicated that due to the use of Appfolio, the payments appeared as if they were being sent to C & M but were actually sent directly to other vendors.

The detective then requested a subpoena to obtain records from Appfolio for all the communities that C & M managed. In March of 2024 he was assigned a second case for an investigation involving Brechbill allegedly transferring large amounts from the Quail Meadow HOA in the country club.

The article describes how the detective then spoke with someone from Signature Property Management, which had begun managing Quail Meadow. According to the complaint affidavit, the representative from Signature indicated that Brechbill had not turned over any paperwork after several requests, so the company requested records from the HOA’s bank and found that hundreds of thousands of dollars had been transferred to Brechbill and C & M.

In May of 2024 Appfolio provided the detective with financial ledgers for every community managed by C & M, and the officer began reviewing bank statements and documents from 2018 through 2023 for both HOAs. This review led to the discovery that more than $820,000 had been transferred from the Quail Meadow HOA’s account to C & M’s account, which the complaint affidavit indicates Brechbill used as his personal account.

Eventually at the start of July of this year, Brechbill was taken into custody on warrants for first-degree grand theft for unlawfully obtaining more than $100,000 from Quail Meadow, organized fraud of more than $50,000 for transferring funds from both HOAs, and second-degree grand theft for unlawfully obtaining more than $20,000 from Starling Court.

This police investigation of more than two years illustrates how Florida law enforcement agencies are now investigating and prosecuting allegations of community association fraud, theft, and embezzlement much more aggressively than in the past. It also demonstrates how communities should do their part to avoid becoming a victim by never ceding too much financial control to one or a few individuals with little oversight.

HOAs and condominium associations should require two signatures on all checks, keep the stockpile of blank checks securely locked away, avoid community debit/ATM cards (which are prohibited by Florida law), conduct monthly reviews of all account and financial statements by multiple directors/managers, and maintain adequate insurance coverage to protect against losses due to malfeasance. Associations should also conduct independent audits of all financial records by certified experts on a regular basis. . .

Shari concludes her article by noting that because community association directors and property managers have a great deal of control over the purse strings for the enclaves they serve, the potential for fraud and embezzlement will presumably always be present. She advises communities to make effective use of these and other preventative measures and precautions, and suggests that suspicions of wrongdoings should be shared with local and state law enforcement agencies for investigation.

Our firm salutes Shari for sharing her insights into the takeaways from this recent arrest with the readers of the Miami Herald.

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