A Matter of Trust Detecting and Preventing Financial Fraud

 Few things can be as upsetting as discovering that the dollars and cents that fuel a community association have  been mishandled or worse yet, stolen.  

 For residents, fraud undermines their sense of trust in the men and women who  oversee and manage the place they call home. For managers and board members, it  can breach the trust that exists between each other, wreaking havoc not only on  the bottom line but on the very fiber of the community itself.  

 In these days of Bernie Madoff pyramid schemes and the tumult on Wall Street, knowing how to detect andprevent fraud has become even more important to unit owners, managers and  boards.  

 Looking over the variations on fraud and malfeasance, accountants practicing in the community association field seetwo types of shenanigans, one mostly confined to newer condos and the second  with older, more established condos.  

 New Condos at Risk

 New condos that are still under a developer’s control are vulnerable to a variety of schemes, most of them orchestrated by the developer himself, says  Anthony “Tony” Carideo Jr., CPA, with Wolf & Company, PC, in Boston. “I think more of the frauds happen in the early years, when the condo isn’t established,” he says.  


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