News 3 Investigation: Part 2

Missing Money: HOA Managers Accused of Embezzling Funds

May 20, 2004

Sixty percent of all people in the Las Vegas Valley live under the rules of some sort of homeowner's association. The mini-governments watch over developments, collect fees and fines from people who break the rules. But as News 3 Investigator Darcy Spears found, the associations can't always be counted on to manage that money properly.

You might call the subject of our story a property "mis"manager. He's been hired by many associations over the past 14 years, but has essentially operated under the radar screen. He's had some blips here and there, but nothing that sounded the alarm until now. And that may be the root of the problem.

Picture this, a property manager is accused of stealing about $100,000 from a homeowner's association.

"We were pretty clear about what was going on."

When they catch on and threaten legal action, he coughs up the cash, making the case less than interesting for Metro fraud.

"Even though they look at it, I think they see other things as a greater priority."

So what happens to the man caught with his hand in association coffers? So far, nothing, which frustrates Mariposa board member, Aimee Pantea and her husband Romy to no end.

"I think it was fear that made him return it. Is that right that somebody could get caught and then return it and then say, okay, no foul, no crime? it seems ridiculous to me!"

The Panteas filed 3 complaints, which are still under investigation, by the state real estate division.

"Even when they knew the money was missing, they didn't do anything. And now we're 3 or 4 months later and there's still been nothing done. We did this as private homeowners to make this happen and I think that's the part that we're concerned about because if it could happen here, it could happen anywhere."

Senator Mike Schneider sponsored much of the state's homeowner association law. "This isn't one little isolated case. This is going on across the valley in a lot of homeowner associations and it's something that needs to be looked at. And it's been something that has stayed underneath the radar screen for so long."

But has it? Not in the case of the man accused of embezzling from Mariposa. Thomas Wrath of A&A management has been on attorney Jay Hampton's and the real estate division's radar screen for years. "I've dealt with Mr. Wrath on 3 different occasions, and in each instance it was a situation where the association was trying to get information from Mr. Wrath--either records or money or both."

Members of Spanish Villas HOA accused Wrath of ineptitude, incompetence, dishonesty and mishandling money. Paradise Springs, also represented by Jay Hampton, reported missing money too.

"In the end there was $20,000 or $30,000 that they really never could justify where it went and Mr. Wrath never provided an explanation for it."

In all, Wrath had six complaints filed against him with the real estate division before Mariposa's. All were closed for insufficient evidence or lack of jurisdiction. One resulted in a letter of warning. The only time the real estate division took formal disciplinary action against Wrath was when they found he was unlicensed. They sent him a cease and desist order, but he kept operating as a property manager in direct defiance of that order. Even so, the real estate division allowed him to become relicensed after paying fines and taking some classes.

"Just the fact that he's taken money out of an association's reserve fund should be the end of the story. And I don't think he should be managing associations here."

So what does Tom Wrath have to say about all this? He referred us to his attorney who refused to return calls, so we tracked him down with our hidden camera to give it one last try.

"Tom?"

"Hi."

"Hi, I'm Darcy Spears. Your attorney is not returning my phone calls, and I just wanted to come by and see if there was any possibility if we could talk to you since she's not talking."

"Nope. She says to keep my mouth shut."

"There are people that are going on camera that are saying you're stealing money from HOA's."

"It's not true."

"It's not true?"

"No."

"They're saying it on camera, though, and that's why I want to make sure that--you know--I'd like for you to be able to respond."

"They're lying and my attorney will be able to use that in our suit against them."

"You've never embezzled money from anyone?"

"No, not a dime."

It's important to note that Tom Wrath has not been criminally charged with anything at this point in regard to Mariposa's allegations of embezzlement. There is a civil lawsuit in progress. I spoke to members of two other HOA's that have operated under Tom Wrath's management. Casa Vegas homeowners are having an audit due to missing money, and Spanish Villas residents were just informed their dues are going up, because the association is allegedly broke.

There is a Real Estate Commission that was created in the last legislative session to rule on disputes with homeowner associations and property managers. We all pay three dollars a door for that commission to step in in cases like this. They'll begin conducting hearings this summer.
posted by Las Vegas at 12:10 AM