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Fraud at Koger may tally $2 million
Amount of funds missing from HOA accounts could be double original estimatesDate published: 7/29/2007 By DAN TELVOCK A forensic accountant reviewing financial records of an embattled homeowners-association management company says the amount allegedly missing from customers is more than double an original estimate. State regulatory officials and the Fairfax Police Department continue to investigate Fairfax-based Koger Management Group for possible wrongdoing. The company did business with several HOAs in this region. President Robert A. Koger reported the financial irregularities to police in January. The original figure provided was about $800,000 missing, but that number has ballooned to $2.2 million. Jeffrey D. Barsky, the court-appointed accountant, detailed his preliminary findings in a letter to the court-appointed monitor last week. At least $2.2 million was withdrawn from a BB&T bank account used to manage the HOAs from 2004 to 2006, he reported. That money was transferred to accounts operated by Jeff Koger, the former chief financial officer targeted in court records as the likely "primary culprit." It's unclear what happened to the money from there. More records are needed to determine the true extent of the problem, but getting the information from BB&T will be costly, Barsky said, because it will require them to search back in records. Barsky said the company has paid $113,000 in claims, and he's "quite concerned" that the amount of mismanaged money exceeds the amount of claims paid "by so large an amount." Barsky said there could be more victims, but some HOAs haven't realized it because they haven't audited their records. "Koger is relying, in part, on the associations' outside auditors to identify the losses by association," Barsky wrote. "There are approximately 400 homeowner associations that are potential victims. Approximately 200 are not audited. Therefore, approximately half of the potential victims have no audits and therefore could have losses that may not be identified." A Fairfax County Circuit Court judge and the Virginia Real Estate Board ordered in February that the company be monitored and audited until the criminal investigation is complete. Robert Koger said in March that he would pay back all HOAs that could show they are missing funds. He disputed that he owed the Falls Run Community Association in Stafford County $90,000.
Read more stories about Spotsylvania Date published: 7/29/2007
still in business...why?
(posted by
rannrich
, Sep. 25, 2007 2:41 pm)
Why is the state allowing him to stay in business?
HOA Cesspool
(posted by
Chris.ology
, Sep. 25, 2007 2:41 pm)
These things are ripe for fraud, waste and abuse with little oversight of the funds once they disappear into the HOA management company. Take our HOA for instance, our annual revenue is something like 45k and our HOA management company gets to keep 34k of that. Hmmm...what's wrong with that picture? I can only imagine that this particular sentence could describe many HOA management schemes.
Related?
(posted by
CorranH96
, Sep. 25, 2007 2:41 pm)
What's the relationship between Robert A. Koger and Jeff Koger?
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