Complaint Review: Villages on Preston - Dallas Texas

The list of fraudulent activities continues to grow even as a local news investigation is underway. The following list is not exhaustive and we will add more fraudulent activities as the are discovered.

- deception included sending out proxy ballots with a separate letter that stated the amount of the rehab was the same.  However, even though many owners sent in Yes votes based upon the same price, the Board had actually added more than $100,000 to the total!  Therefore, votes were cast without having adequate or correct information.

- Special Assessment sales presentation was given by the President of the Preston Village HOA Board.  Within one month of deceiving the owners, it was discovered that the President Richard Fuchs had transferred ownership of his condo to his son 3 days after taking office as President of the board.

- Rather than telling the truth to homeowners, the Board and their management company, Excel Association Management in Plano, TX, sent a letter to homeowners stating Richard Fuchs had transferred ownership to his son for "estate planning" purposes.  What they neglected to say was that Richard Fuch's son is a well-known Wealth Manager in Austin, TX that would never recommend "transferring ownership" as a way to plan an estate. 

Furthermore, the letter stated:

"Although the Associations Bylaws state that non-owners may serve on the Board of Directors, the Articles of Incorporation state that Board Members must be owners of record. Effective April 2, 2012, Richard Fuchs resigned from the Board of Directors. Richards resignation was occasioned by the need to avoid any conflict between the Bylaws and the Articles of Incorporation of the Association with regard to eligibility for the Board of Directors."

This is simply a blatant lie to the homeowners the Board is supposed to serve.  Anyone with any knowledge of HOAs understands that the Articles of Incorporation mandate the initial Board of Directors must be members (owners) of the corporation.  The Preston Village HOA bylaws, contrary to the letter sent to owners above, also state that candidates for the Board must be owners of record.  Did the Board ever read the Bylaws?  This letter to homeowners makes it clear that this Board of Directors either has not knowledge of the corporation they are in charge of or they are purposely deceiving the homeowners.

- After Richard Fuchs resigned before being recalled, two Garden condo residents were denied access to the ballots by Excel Management, who stated the vote was by "secret ballot".

Only after being threatened with legal action did Excel determine the vote was not, in fact, by secret ballot.

- Two Garden condos owners then recounted the ballots for this Special Assessment and discovered that the cote did not actually pass.  This evidence was presented to the Board and the Board ignored the evidence.

- To add insult to injury, the Board neglected to tell homeowners that they planned on using a large portion of this Special Assessment to pad the Reserve account in order to apply for recertification by FHA!  

- Once their deceitful application was rejected by the FHA due to inadequate reserves, they failed to notify homeowners that the development was rejected!  Now owners cannot refinance and their buyers cannot use FHA financing!

- Since being rejected for FHA financing and programs, the core group of owners, including those that own multiple units through securitized mortgage-backed securities, developed and launched a scheme to buy and sell units within the community at inflated values in order to raise values within the community as the tax values continued to fall. 

Sure, keeping home values is a great idea. Unfortunately, artificially raising home values through a buy and sell scheme through 6-month cash notes is illegal in all 50 states.

In an effort to cover up this "complicated" fraud, former HOA directors developed a condo community within a few miles of Preston Village and named it "Preston Villages". They were convinced nobody would noticed this new development in the adjacent county, however several owners were not so easily fooled. When Excel Association Management was asked why the Management Certificate for this new HOA, filed with the state of Texas, suddenly listed several of the sub-HOAs of the original Preston Village as being managed by a different management company, they claimed that "the other management company mistakingly listed a few of your HOAs on their certificate".  Oh, OK. That makes TOTAL sense.

What are the board members trying to hide?

Perhaps the tip of the iceberg is the fact that a local Certified Fraud Examiner found more than $100,000 in missing funds from the master associations financials......PER YEAR.....for MULTIPLE YEARS.

More to come.