Co-op & Condo Fraud: The Management Report
Habitat Magazine – 2010
Cracking down on misconduct by managing agents – March 2010
…“We saw a lot of people starting businesses who have now fallen by the wayside,” Greenbaum said. “It’s a very difficult, niche market.”
When times got even harder after the Lehman Brothers collapse, these new companies — and other managing agents — faced even greater temptation to abuse their positions, said Stark.
“We’re seeing an uptick in fraud in general,” Stark said.
Inexperienced firms are also more likely to engage in a frowned-upon practice called “commingling,” which involves putting funds belonging to multiple buildings into the same bank account. The practice isn’t illegal, but is shunned by accountants and most managing agents because it makes it harder for buildings to keep track of their money…