A Board Follows Its Gut Instinct and It Pays Off Big Time
Exterior of Forest Hills South
Sept. 17, 2015 — When the cops finally came for Michael Richter, the board members of one Queens co-op knew they had done the right thing. Richter, owner of Charter Management, had acted as managing agent for Forest Hills South Owners, a 605-unit co-op spread across seven buildings. They fired him.
On July 13, 2010, police arrested Richter and charged him with five counts of second-degree grand larceny and five counts of first-degree falsification of business records. Richter was also charged with embezzling almost $1 million in tenant maintenance fees throughout a six-year period from five co-op buildings in Jamaica, Forest Hills, Rego Park, and Elmhurst.
In what the Queens district attorney compared to a "Ponzi scheme," Richter's alleged crimes included providing falsified business records to disguise the thefts. He initially denied wrongdoing before pleading guilty to third-degree grand larceny, a Class D felony, on January 25, 2011. Richter was sentenced to up to three years in prison on April 19, 2011 and signed five confessions concerning the money he stole.
What did this mean for Forest Hills South? With its significant financial resources, the Queens co-op could have been prime pickings for a thief like Richter. Another co-op caught up in Richter's scam had to sue to reclaim the $350,000 he plundered. Other buildings in similar traps had to take legal action to find more than $1 million in missing funds. For Forest Hills South, however, it was a different story: the board's diligence prevented the co-op from falling victim to white-collar crime.
"We double-check everything and take nothing for granted," explains George McGrath, the board president of the posh co-op, which includes manicured gardens, elegant fountains, and beautiful Georgian architecture. "There was a sense that we were missing some marks with Richter and needed to move to the next level. If you step back and see that you're doing all the work and you have to keep your hand in everything 24/7 to make sure everything is in check, then something is not right. We took precautions that enabled us to dodge a bullet."
Photograph by Lorenzo Ciniglio