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Home / Capitol Insiders / Casa Grande HOA stripped of powers over accusations of theft and fraud

Casa Grande HOA stripped of powers over accusations of theft and fraud

This photo of property in the Desert Carmel residential community was taken in March. Since then, the HOA board was ordered into receivership by a court due to alleged theft and mismanagement by board members. (File photo by Bill Coates)

This photo of property in the Desert Carmel residential community was taken in March. Since then, the HOA board was ordered into receivership by a court due to alleged theft and mismanagement by board members. (File photo by Bill Coates)

A Casa Grande homeowners association was placed in receivership, following allegations that board members drained funds for their own benefit – including what was described as the “theft” of more than $600,000.

Pinal County Superior Court Judge Robert Olson’s Sept. 30 order placed a receiver in charge of the Desert Carmel Lot Owners Association.

Along with other reasons, Olson cited a board member’s unauthorized withdrawal of $665,000 from association’s account.

“The court finds that the parties controlling the DC Lot Owners Association were grossly negligent in failing to protect to, protect, preserve or detect these withdrawals, which constituted the bulk of the liquid assets of the association,” Olson said in his order. “This alone justifies the appointment of a receiver.”

The defendants include Las Vegas developer Shawn Lampman and Denver real-estate consultant Robert Bealmear. Together they own most of the 3,500 lots in the Carmel subdivision. They also continue to sit on the three-member DC Lot Owners board.

A third board member, also a defendant, Thomas Lozzi, recently resigned. Other defendants include companies in which 44-year-old Lampman and 65-year-old Bealmear had an interest.

Desert Carmel’s original developer established the community in the 1980s. But it went bankrupt and only 100 or so homes have been built since. The thousand of unsold lots changed hands several times since. Most ended up with Lampman and Bealmer, known in the suit as “majority owners.”

Fifty-seven Desert Carmel residents and “minority” lot owners sued Lampman, Bealmear and others in November 2007, claiming they had used their board memberships to enrich themselves at the expense of the community. They claimed the board members – the majority owners – had conspired to drive down property values to acquire more lots at a discount. They planned to re-subdivide and redevelop Desert Carmel, according to claims in the lawsuit.

Plaintiffs said the association made it all but impossible for minority owners to build on their own lots. On top of that, the association neglected maintenance and upkeep of common areas, closing two clubhouses and filling a swimming pool with dirt, according to documents filed by the plaintiffs.

Lampman denied that he or other board members sought to drive down property values. He and his partners invested $13 million in buying some 2,500 lots in a 2005 bankruptcy sale, he said.

Bealmear first bought into Desert Carmel in 2001. His investments include some 150 lots, he said.

“Why the hell would we want to hurt something we put so much money into,” Lampman said in an interview.

In a Sept. 8 motion, however, plaintiffs’ attorneys said board members bled the association’s account by some $345,000 – leaving a balance of only $44,000. The complaint added: “They have spent nothing on maintenance or improvements for the community.”

One of the more serious complaints accuses Lampman himself of stealing association funds. The Sept. 8 motion said he made 19 separate withdrawals totaling $665,000 beginning in September 2007.

In February 2008, the court appointed a special master to audit the association’s financial records. The DC board made the books available in May of that year – just after Lampman returned all the money.

Plaintiffs’ attorneys noted, “It certainly cannot be described as a coincidence.”

In a Sept. 21 response, Lampman’s defense team said the withdrawals were made in error. It was mixup as Lampman kept his personal account at the same bank as the association, attorneys said.

“As such the removal of the funds was purely accidental,” they wrote. In addition, Lampman returned the money when the error was discovered.

“We have trouble accepting that it was purely accidental,” Melanie McKeddie, plaintiffs’ attorney, said in an interview.

In the plaintiffs’ motion, she told the court: “Theft is theft, regardless of whether the thief returns what he wrongfully took.”

Lampman, however, stood by the assertions made by his attorneys.

“It’s a bank error,” he said. “Whatever they want to say, it’s a bank error.”

As for Bealmear, plaintiffs said from January until July of 2008 he was paid a salary of $5,000 a month. State law bars members from getting paid for serving on the board. In addition, Bealmear billed the association for trips to Las Vegas, where meals and alcohol were put on the association tab.

By then, the DC Lot Owners Association office had been moved to Las Vegas. Rent was paid to a company owned by Lampman.

Bealmear’s attorneys, however, said the payments were legal. The board members, attorneys said, voted in open session to hire Bealmear as an independent contractor for the association. He was not paid for his board work, they said.

Bealmear said his work included making phone calls on behalf of the association and arranging contracts with vendors, among other things.

“At the time, we didn’t have a management company,” he said in an interview. “Somebody, in my view, needed to do the work.”

Desert Carmel now contracts with PMG Services of Mesa.

While defendants spent money they shouldn’t have, they failed to pay money they owed, plaintiffs said. They didn’t pay association dues on their own property.

“In fact, from January 2008 through July 2009, defendants have not made a single assessment payment,” the Sept. 8 filing said. “Defendants, collectively, are indebted to the association for approximately $900,000, just for 2008 and 2009 assessments.”

On the other hand, the association – under Lampman and Bealmear’s control – threatened foreclosure on minority lot owners for back dues, plaintiffs said. It was part of a scheme to acquire more property, they alleged.

Shortly after receiving demand letters, lot owners would receive offers to have the property taken off their hands. Buyers said they would pay off the assessments owed the association, in some cases totaling nearly $4,000. The offers came from companies in which Lampman or Bealmear had an interest, according to the court documents filed by plaintiffs, though that information wasn’t revealed to lot owners.

After the companies acquired the property, however, the association wrote off the debt – routinely backdating the write-offs to make it appear as if they had been cleared off the books prior to the sale, according to the plaintiffs’ claims.

In their response, attorneys for Lampman and Bealmear said the management company sent collection notices to all lot owners, majority owners included. Litigation, however, prompted the association to put all collection efforts on hold, their attorneys said.

Lampman said the association board played no role in the foreclosures.

“We had no control on how the foreclosures were handled,” Lampman said. “That was handled by Charlie Maxwell. He’s a lawyer for the association.”

Maxwell didn’t return a phone call to his Mesa office. His firm did not handle the Sept. 21 filing on behalf of association defendants. They were filed by a separate Phoenix law firm, with Tim Thomason as lead attorney.

Thomason told the court that Lampman, Bealmear and other defendants had agreed to repay the assessments. But the plaintiffs questioned the repayment plan, which would be stretched out over 10 years. The plan was worked out between the association board and the majority lot owners, both controlled by Lampman and Bealmear.

Peggy Neisent, a Desert Carmel resident and one of the plaintiffs, attended a Sept. 29 hearing on the motion for receivership.

She said Judge Olson asked defendants’ attorneys if anybody beside majority owners had been offered a chance to work out a payment plan.

“They really couldn’t come up with an answer,” Neisent said.

Lampman said the association has begun work to improve Desert Carmel. That included clearing weeds and adding landscaping to the Desert Carmel entrance. Plans were afoot to reopen one of the clubhouses, along with the swimming pool. The receivership order put that on hold, he said.

“Once we determine we can move forward, this stuff can be done,” he said.

Plaintiffs’ attorneys, however, said the board voted to spend just $35,000, after years of neglect.
“Whatever the case, nobody has repaired or improved anything,” they argued. “The director defendants cannot be trusted to meet their obligations … as they have demonstrated for nearly four years.”
Neisent said some improvements have been made to the entry.

“Nothing was happening until about a month ago,” she said. “They started making an effort to clean up the place. They did some landscaping, cut down some palm trees that were dead.”

On a road that had been washed out, they put in piles of dirt so motorists wouldn’t accidentally drive into a canal, she added. Near the Desert Carmel entry, trees were planted as part of the landscaping.
Neisent said landscaping crews took the trees from elsewhere in community.

“There were actually taking trees from anywhere in the development that they thought they wanted,” she said. “For sure, they took one tree that was off somebody’s lot that was not theirs.”

Lampman dismissed the idea trees had been taken from others’ property. He said the association bought the trees.

“Nobody took any trees from anywhere, and if anything was mistakenly moved, it was put back,” he said. “I wasn’t personally down there, so I don’t know.”

Read the Capitol Times original report on troubles with the DC Homeowners Association published in March

12 comments

  1. From “HOAGOV” –

    This is one serious example of what happens when private organizations are permitted to take other people’s money, the homeowners, in trust to provide services for the money payers, without accountablility. State escrow agents, title companies, banks, real estate brokerage firms, etc. are subject to strict money accountability and random audits by state agencies. What is so sancrosanct about HOAs? A strong lobbying group in front of the Legislature seems to be why not!

    If it takes licensing of HOA boards, and their management firms to protect the homeowners, as occurs in the numerous other industries mentioned above, then let’s get licensing with strict accountability for HOAs this next legislative session. No more “sacred cows”! No more buying the special interest claims of harm to the HOA, that the HOA, that nonprofit corporation, must be protected before the individual rights and freedoms of the people.

    Learn more at http://pvtgov.org and http://pvtgov.wordpress.com

  2. That is really a difficult situation, look for help, look for information.

  3. So now that all legislators have this in front of them and cannot ignore the horrendeous problems with HOAs and those who are feeding from the assessment trough what are you going to do about this…..how can you ignore your constituents. You ignored it when HOA Attorney Scott Carpenter succeeded in getting a Judge to do away with the OAH, you have ignored all the horror stories (that are true).

    How much longer do all homeowners and especially the elderly who are really taken advantage of for legislators to protect their constituents??

    There is no good reason for this not to happen unless it is because the legislature is simply more interested in CORPORATIONS than PEOPLE!

    Give us an agency….we are being treated differently than than others and it is governments fault that we have to buy in an HOA.

    Pat Haruff
    CHORE, Coalition of HomeOwners for Rights and Education
    480-641-3250

  4. Desert Carmel is an area of which I have personal familiarity, having lived NE of Casa Grande since 1977. It has been a mostly unsightly area – weeds and dead palm trees (not native of course), since the mid80s as I recall, except where a property was currently inhabited (and there were/are few of them). The idea of land in common, whether it be declared so by a government entity or a home owners association is fraught with problems arising from that land *not* being private property.

    The cry from some to create *another* government agency to solve the “tragedy of the commons” is an unstated desire to continue to be ruled – in conjunction with the belief that an orderly society requires that there be rulers and the ruled. A self-ordering society of individuals interacting to mutual benefit, each with the goal of maximizing hir lifetime happiness (the purpose of each whether or not s/he recognizes that fact), is possible. Individual self-order without rule by others is the social system whose members are humans, who have become fully adult. Just as people can become physical adults, so can they become social adults – if only they are allowed (and even required in the sense that they will not achieve their desires unless they do) to socially mature sufficiently. Understanding the social interaction methodology by which more individuals would progress to become fully socially mature adults requires a paradigm shift in thinking about human interactions.

  5. Who would have thought this kind of corruption and skimming could happen in an organization, with no real oversight, collecting hundreds of dollars a month from each resident?

    http://hoahell.com

  6. I own land here that I inherited. It has been one lie after another. I was particularly amused to learn that if I plan to build a house on my property that I OWN and pay TAXES on, I am forbidden to poop in Desert Carmel. Is there some “special” ability to not poop that affects the other lot owners in Desert Carmel?

  7. I have received a bill from DC Lot Owner Association c/o AAM, LLC dated 10/30/2012 for the following annual assessments ( 2010,2011, and 2012). Is this HOA legitimate?

  8. One thing that nobody seems to put out in the open is that the “Assessment Fees” were $160.00 a year. Plus a $22 monthly sewer & Trash fee. That is an extremely small fee for an association. And to consider there was 57 occupied lots which calculates to $9,120 per year of assessments, barely enough to continuously keep a severely neglected community up to standard. And if Lampman & Bealmear are the majority owners then they are responsible the paying their dues in order to acquire the property and so forth. Therefore; they have put most of their own money into the DC LOT OWNERS ASSOCIATION. This community was suffering and in bad shape long before Lampman & Bealmear became involved, considering it was represented by Pat Boone in the 1950′s and being sold to people as a scam. It all stems from decades of neglect and false representation, not just a recent development of 2 investors.

  9. “Pat Boones Desert Carmel” What a guy.

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