Parkwood president: Embezzler took at least $150K from HOA [The Herald-Sun, Durham, N.C.]

Nov. 18--DURHAM -- Between $150,000 and $200,000 was embezzled from the Parkwood Homeowners Association in the past 2 1/2 years -- some of it apparently used for unauthorized trips to Las Vegas, Miami and other gambling destinations -- and the group, which represents more than 1,000 homes in the southern Durham community, probably won't get its money back.

That's according to Michael Brooks, president of the Parkwood association, who said the group's office administrator has been suspended without pay, but no one has yet been charged in the theft.

Durham police spokeswoman Kammie Michael confirmed that no charges have been filed and that the case is still being investigated.

"At about the same time that our former employee started work, the money started disappearing, and it stopped when he left," Brooks said in an interview this week.

He said of the police investigation: "It's going step by step. If the amount of a theft is over $100,000, as it is in this case, it counts as a Class C felony, which is pretty serious" and could bring a prison sentence of five years.

In a newsletter to Parkwood residents Thursday, Brooks said that no fraudulent checks were issued, since every check required two signatures, but that "almost all the fraud was committed through the use of a variety of debit cards linked to Parkwood's checking account."

"There are hundreds and hundreds of unauthorized charges, many for cash withdrawals from local ATMs, many others to on-line gambling Websites, many more to pay for trips to Las Vegas or other destinations," he wrote.

Other unauthorized charges include medical bills, restaurants, shopping, gas, car repairs, movies "and a lot of what were probably money order purchases."

"Everyone, most especially board members, has asked themselves the same question: 'How could such blatant activities go on for so long without being noticed?' " Brooks wrote. " 'How could so many suspicious charges take place almost every month without being caught by the board treasurer, by other board members, or by our accountant during his annual audits? Didn't anyone look at anything?' "

The answer, according to the newsletter: forgery.

"In a typical month, as the treasurer would examine the current bank statement, compare that with the bookkeeping system's figures and approve a treasurer's report, he was looking at a forged bank statement matched with false bookkeeping entries. Theft was carefully and skillfully hidden, month after month, taking advantage of Parkwood's long history of trustworthy employees," the newsletter states.

Brooks said it's unlikely that the homeowners group will get its money back.

"It would be like finding a pot of gold at the end of the rainbow," he said.

At best, insurance will pay between $25,000 and $50,000, he said, adding that the association will meet soon with an insurance adjustor.

The loss of money, which was discovered Sept. 21, has meant the association has had to suspend much of its lawn care and other maintenance. But the group has applied for a short-term, $30,000 loan to help it resume normal maintenance operations.

"There have been a whole bunch of people -- many anonymous -- who just up and brought their lawn mowers and mowed the grass," Brooks said. "They didn't ask for anything."

Next year's budget will be bare-bones, he said, "because we're starting from zero. But we won't be skipping the essential things."

Two events that Parkwood traditionally sponsors -- an Easter egg hunt and a Fourth of July bicycle ride for children, might have to be canceled next year.

But this year's holiday parade is still on. It's slated for 2 p.m.Dec. 4, and will cost Parkwood almost nothing.

"Everyone who usually gets reimbursed has stepped forward and said: 'We'll do it for free,' " Brooks said. "It's the most amazing thing I think I've ever seen. There have been no refusals. Everybody has stepped forward and many have donated money to help."

He said the parade is free and open to anyone, not just Parkwood residents.

"This year, above all, has made us realize that the parade is a source of pride," he said. "The gremlin is not going to take our holiday away."

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