Co-op Treasurer Charged with Embezzling $181K; Residents Outraged

Prosecutors, led by Assistant D.A. ToniAnn Gagliardi of the Economic Crimes Bureau, said she used the money for such personal expenses as an $80,000 landscaping bill for her home. Released on her own recognizance, she is next scheduled to appear in court May 26. The theft was not reported until after a new property manager, Gramatan Management, was hired, leading to an investigation that began in June 2009.

Why the delay, and why did the treasurer not live at the co-op complex? Neither Gramatan nor the office of Westchester D.A. Janet DiFiore would comment. Residents and neighbors, however are not so reticent....

Warning Signs

"The board was warned about her," one wrote on the website of the Lower Hudson Valley newspaper, The Journal News . "She was not even a resident in the complex, her father was. She did not belong on the board but the board members at the time fought for her to be there.," claimed the commenter, who signed his post GWFOGRE. "They should all be investigated... Let this be a lesson to all who live in co-ops [to] make sure you know what your board is doing!"

Resident manager Aymara de Cárdenas of the New Rochelle-based Gramatan declined to comment, but passed along an interview request to the board.

The nine-building, 353-unit Vernon Green is a mix of three-story garden apartments and six-story elevator buildings on approximately 10 acres of land. A source who requested anonymity said that in advance of the annual meeting, to be held next week, shareholders were given general outlines of the alleged embezzlement and promised more complete information at the meeting.

That delay, however, may be fueling outrage among residents and others. Commenters have posted pointed questions and claims. "No bail?" wrote one. "Grand theft and no bail, sounds very odd to me." Responded another, "From what I understand, her father who actually lives here is a former attorney - probably has quite a bit to do with why she didn't have to pay bail!" The latter also wrote, "This is our money — the residents of Vernon Woods. There had to have been other people aware of this situation when it was occurring. $180K doesn't disappear into thin air. While I do appreciate that action is now being taken against her, I'd like the board members involved at that time interviewed and investigated as well."

In Westchester County, wrote yet another, "Many condo and coop owners are being victimized by dishonest managing agents and entrenched and self-serving board members. Transparency is of paramount importance...." And another declared bluntly, "I think all the board members are a bunch of crooks."

What Happens when this Happens to You?

What can other boards take from this? First, do damage control quickly. That means getting pertinent information to shareholders and the public as soon as possible. Some information is obviously off-limits, in that it might compromise a prosecutor's case. But answering questions that have no bearing on guilt or innocence, such as how a non-resident could hold a sensitive board position, can fill the vacuum that no information or too little information inevitably leaves — a vacuum that, as clearly seen by this smattering of public postings, will generally not reflect well on a board.

When answers are not forthcoming, the public believes a source has something to hide. Damage-control experts talk of "getting ahead of the story," advising clients that the earliest sources to go public are the ones that largely shape the course of public opinion.

And heading off trouble in the first place, of course, is always the best way to go. "Review your financials," says the source. "Every month."