Page 10 - New England Condominium August 2019

10 NEW ENGLAND CONDOMINIUM -AUGUST 2019 NEWENGLANDCONDO.COM Combatting Kickbacks Spotting and Stopping Fraud in Your Community BY MIKE ODENTHAL INSURANCE/BOARD TRAINING www.RiskStrategies.com Specializing in Insurance and Risk Management Services for: For more information Contact Thomas Shields | Producer E: TShields@risk-strategies.com P: 781-961-0314 A: 15 Pacella Park Drive, Suite 240, Randolph, MA 02368 Bernie Gitlin | Executive VP E: Bgitlin@risk-strategies.com P: 781-961-0330 C ondominiums C ommunity A ssoCiAtions HoA C ommunities C ooperAtives R unning a community association proached and asked for their ‘support’ can be – and often is – stressful when it comes time to vote for the selec- enough without the added issue of tion of a vendor at a board meeting. The people in a position of power in the com- munity using that position for personal asking, ‘What will it take to be awarded gain in the form of kickbacks. Whether a contract?’ The assumption being, of the offender is a superintendent, man- ager or board member, skirting the rules go with the vendor with the lowest price around bidding out projects, hiring ven- dors and service providers, or purchasing the vendor that provides ‘extras' – be that supplies in order to receive money or fa- vors is rarely, if ever, worth the risk for or another benefit in exchange for them the perpetrator. In the end, it can cause being selected. The frequency of provid- serious harm to a community and those ing these ‘extras’ may vary depending on who live there. Understanding what the size of the contract and whether or kickbacks are and knowing what to look not it's a recurring service.” for can help ethical board members and managers recognize and prevent them ager with Kaled Management, which has from infecting their building or HOA. Plotting and Scheming In order to snuff out a kickback racket, real and very serious. “I have had con- it’s important to know how it develops in tractors offer me kickbacks, and have im- the first place, and why. “Kickback or bribery schemes often my colleagues so that they too can steer arise when a contractor or other ser- vice provider wants to gain access to or comes to receiving kickbacks, the ones maintain a relationship with a building you need to look out for most are the or community association,” says attorney boards. The boards hold the power to Michael T. Reilly of Norris McLaughlin approve or reject proposals or quotes, P.A., in New York City. “Board members and because of this will sometimes send and/or managing agents are likely ap- illegal scheme may start with the vendor course, that the board or agent will not or the best qualifications, but rather with cash, tickets, travel, free restoration work, Sebastian Buttafucco, a property man- offices throughout New York, laments that kickbacks in the industry are both mediately turned them away and notified clear,” Buttafucco says. “To me, when it friends to bid on projects. I once mistak- ISTOCKPHOTO.COM