Jose Lazaro Hoyos and Lilliam Martin on the Path to Federal Prison?

You live in a homeowner's association (HOA) community. You know that monthly, quarterly or annual dues are required as part of the costs of living there. Yours might be a condominium or a common-wall town-home; in either case you know that you share the costs of common area maintenance and accept that without a second thought.

At least, until something comes up, like a huge assessment for a special project like a new roof over several acres above your unit. It happens. Some are told to pay that extra $10,000 in ninety days or forfeit their investment. 

 

If you own a unit in Devon-Aire Villas Number 3, you get a bill twice a year from someone in a management company whom you've never met. It's unlikely that you ever will meet this person who bills you, takes your money and disappears. The bills are anonymous; just a corporate name appears, and that comes under cover of an “LLC,” Limited Liability Corporation. 

 

As long as you've owned property in an HOA community you've understood that there are consequences to skipping a payment of dues. It's understood that legal fees, perhaps even loss of the property could be a consequence of challenging an invoice. To be safe, you're conditioned to pay.

It would never occur to you that the company sending you that invoice has no legal right to do so.

Contrary to what the president of your HOA, Jose Lazaro Hoyos, has led you to believe, that company collecting your HOA dues twice a year has no legal contract to touch your money. It gets worse.

South Florida Property Management and Consulting, LLC, (SFPM&C) operating under a Community Association Management (CAM) license issued by the State of Florida to Ms. Lilliam Martin is the corporation taking your money without a valid contract, and unfortunately not accounting for how the money is spent.

This is what the State of Florida requires of Lilliam Martin to keep her CAM license:

468.4334 Professional practice standards; liability.—

(1)  A community association manager or a community association management firm is deemed to act as agent on behalf of a community association as principal within the scope of authority authorized by a written contract or under this chapter. A community association manager and a community association management firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.

One glaring problem with this requirement is that the governing laws of the Devon-Aire Villas Number 3 HOA require a public meeting of the board of directors in order to enter into a contract. No such meeting was ever held. In fact, as long as Hoyos has been president of the HOA, there have been NO board meetings of record. This is to say, Florida statutes are very specific as to what is required to conduct business as an HOA board, including meetings with written agendas and advance notice to homeowners. Minutes of each meeting must be taken. The problem is, this has never happened under Hoyos. No board meetings have met the requirements of this law, no minutes of board meetings set down, and no records of board meetings are retained for seven years. The management company operated by Lilliam Martin has been in existence less than two years (actually barely one year). Without a single legal board meeting at which a contract could be discussed and approved by the board, it is impossible to have a legal, valid contract with this HOA. Hence there is no “dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.”

In fact, it gets worse; SFPM&C merely continues a long-standing practice of zero accounting for all HOA funds. As long has Hoyos has been president not a single financial statement has been made available to the HOA membership. Every attempt to see and obtain records has been denied by Martin, going back years while working under a different corporate name yet retaining absolute control over financial records. More accurately, there are no records meeting the requirements of state laws in existence. 

Under present conditions and past performance as a CAM, Martin should have had her license revoked long ago.

Hoyos claims that Martin's company has a long-standing contract with another three years to go. This is impossible without a valid contract for a single day. Hoyos lies to board members whenever he makes that claim. Of course, he has never shown anyone that contract, after frequent and repeated requests to see it, and expects everyone to accept its terms at his word.

Because of the fact that Martin, as SFPM&C, has no valid claim to the HOA funds, she commits mail fraud every time they send you a bill. Hoyos knows that, or should. It's his fiduciary responsibility to know it. 

 

To accuse a CAM licensee of mail fraud is quite a serious charge. I am aware of that. So I refer to the laws, as they are written.

It's very simple, actually. Under 817.034 Florida Communications Fraud Act.—

(d) “Scheme to defraud” means a systematic, ongoing course of conduct with intent to defraud one or more persons, or with intent to obtain property from one or more persons by false or fraudulent pretenses, representations, or promises or willful misrepresentations of a future act.

a) Any person who engages in a scheme to defraud and obtains property thereby is guilty of organized fraud, punishable as follows:

1. If the amount of property obtained has an aggregate value of $50,000 or more, the violator is guilty of a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(b) Any person who engages in a scheme to defraud and, in furtherance of that scheme, communicates with any person with intent to obtain property from that person is guilty, for each such act of communication, of communications fraud, punishable as follows:

1. If the value of property obtained or endeavored to be obtained by the communication is valued at $300 or more, the violator is guilty of a third degree felony, punishable as set forth in s. 775.082, s. 775.083, or s. 775.084.

Not only does Martin, with Hoyos approval, engage in the scheme to defraud on a consistent basis, year after year, she does so hundreds of times. There are 274 units in the Devon-Aire Villas 3 HOA. Each one is sent an invoice twice a year. Money is collected and spent by Hoyos and Martin, without accountability for a single dime.

And Martin charges $14 per unit per month, with Hoyos's knowledge and approval, while the going rate for far better service and 100% accountability and compliance with state and federal laws is $8 per unit. Neither Hoyos nor Martin can claim to be acting in good faith, or providing the accountability required by state laws. 

 

There are further problems to consider when referring to state laws.

817.155 Matters within jurisdiction of Department of State; false, fictitious, or fraudulent acts, statements, and representations prohibited; penalty; statute of limitations.—A person may not, in any matter within the jurisdiction of the Department of State, knowingly and willfully falsify or conceal a material fact, make any false, fictitious, or fraudulent statement or representation, or make or use any false document, knowing the same to contain any false, fictitious, or fraudulent statement or entry. A person who violates this section is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. The statute of limitations for prosecution of an act committed in violation of this section is 5 years from the date the act was committed.

The federal government has successfully prosecuted a number of cases under a definition of “honest services fraud.” The legal jargon can be intimidating, but the simple understanding is that when a provider of a service engages in a scheme to defraud one or more people or companies out of a fair deal, using false statements or pretenses, then “honest services fraud” takes place. It is quite common for honest services fraud investigations to evolve into racketeering charges.

Prosecutions under the 1970 Racketeer Influenced and Corrupt Organizations Act (RICO) frequently use violations of the honest services statute,[1] as mail and wire fraud are predicate acts of racketeering; therefore, two mailings or wire transmissions in the execution of honest services fraud can form "a pattern of racketeering activity."[6]

There is no doubt that a systematic process has been set up to take absolute control of the funds of the HOA, and that Hoyos and Martin engaged in this process hundreds of times. Anyone who looks closely into the systematic fleecing of the owners of the HOA and the laws that apply will come to the same conclusion: that Martin and Hoyos are engaged in criminal racketeering.

It gets worse, yet again.

Because it is believed by just about every owner in an HOA that one must pay invoices when received or suffer even greater loss as a consequence of not paying dues, risking high legal fees and even loss of property, each time an invoice was sent by SFPM&C there was fear of dire consequences falling on the owners implied. In short, there was pressure to pay or else. But this meets the definition of extortion, and it further complicates the seriousness of the crimes.

Extortion, which is not limited to the taking of property, involves the verbal or written instillation of fear that something will happen to the victim if they do not comply with the extortionist's will. Another key distinction is that extortion always involves a verbal or written threat, whereas robbery does not. In United States federal law, extortion can be committed with or without the use of force and with or without the use of a weapon.

By barely scratching the surface of the problems with Devon-Aire Villas Number 3 HOA, we can clearly see that Jose Lazaro Hoyos and Lillium Martin have been confiscating owners' funds under false pretenses of a multi-year contract; they have engaged in hundreds of acts of fraudulent billing and receipt of homeowner's funds; they have used extortion to obtain hundreds of thousands of dollars of their victims' money; and they have repeatedly over the past two years refused to provide a single financial statement to account for any of the money taken. It doesn't really matter that much that the whole amount taken, over the previous seven years for which records are required to be kept, adds up to well over $800,000. The amount doesn't matter as much as the fact of its continuous theft and the ongoing commission of serious felonies. 

 

To be continued …