OC Condo Bookkeeper Charged In Theft Scheme

OCEAN CITY — On the heels of one of the largest condo association theft schemes in recent memory, a Dagsboro, Del. woman last week was indicted on 15 counts of theft scheme and theft for allegedly bilking an Ocean City condominium association out of tens of thousands of dollars over a three-year period.

Carolyn H. Miller, 51, last week was indicted on 15 total counts including theft scheme over $10,000 and under $100,000 after the property management company hired to replace her by the Marlin Cove condominium and time-share complex in Ocean City discovered several “irregularities” in the association’s bookkeeping over a three-year period from 2008 to 2010, totaling as much as $75,000.

When Marlin Cove fired Miller and replaced her with Ocean Point Ltd., a reputable property management company in the resort area, the new management firm discovered several improprieties or irregularities in the books. Specifically, Ocean Point Ltd. discovered Miller had not paid the association’s Ocean City real estate taxes in 2009, nor any of the association’s local, state and federal taxes in 2010, despite the fact the unit owners had paid the requisite funds.

Upon closer inspection, Ocean Point discovered other improprieties at best, and thefts at worst, in the Marlin Cove’s finances, suggesting there was something larger afoot then the unpaid taxes. However, tracking the missing money was difficult, according to Ocean Point’s Connor Braniff because of the shaky condition of the documentation.

“We basically got very few documents turned over to us when we took over,” he said. “I think there were a couple of shoeboxes of unorganized documents and statements. It took a forensic auditor to go back and basically recreate the association’s books by pulling statements from the bank.”

Braniff said the first major clue something was amiss came in early 2010 when one or two of the Marlin Cove’s units went up for tax sale, essentially meaning they were being offered for sale for not paying state or federal property tax. The discovery of the units being offered for tax sale triggered the probe into why the taxes were not paid.

Once the unpaid taxes and other irregularities in the books had been discovered, the Marlin Cove association and its Board of Directors sought criminal charges against Miller. After a comprehensive forensic investigation confirmed the missing money, the Worcester County State’s Attorney’s Office indicted Miller on 15 total counts of theft and theft scheme on Nov. 29.

The first count alleges Miller, “pursuant to one scheme and continuing course of conduct did steal U.S. currency of Marlin Cove Owners Time Share Association, having a value of at least $10,000 but less than $100,000,” between Jan. 1, 2008 and Sept. 30, 2010. The felony theft scheme charge carries a maximum penalty of 15 years in jail and/or a $15,000 fine.

Miller faces six other felony theft scheme counts from $1,000 to $10,000 with a variety of date ranges over the same basic time period, each carrying a penalty of 10 years in jail and/or a $10,000 fine. There are also eight individual theft charges for specific dates with alleged totals ranging from $125 to $776. The misdemeanor theft charges carry penalties of 18 months in jail and/or $500 fines.

Braniff said there was no firm final number for the total amount allegedly swiped by Miller although the figure appears to be in the tens of thousands of dollars.

“We went back three years, which is the statute of limitations, and it looks like there was about $100,000 unaccounted for,” he said. “There were some receipts for things, but the books were a nightmare. I would say it’s definitely in the $30,000 to $75,000 range, but probably around $50,000.”

The owners of Marlin Cove, which includes seven time-share units and 32 regular units, must now hope for a positive outcome on Miller’s criminal case in order to recoup their losses. Braniff said the unit owners paid a special assessment in order to pay the 2009 Ocean City taxes and the local, state and federal taxes for fiscal years 2010 and 2011. In addition, there were numerous other outstanding bills to reconcile in the wake of the alleged theft scheme including funds owed the various vendors, which were paid from the special assessments charged to the unit owners.

“We had to special assess the owners in order to make everything whole again,” said Braniff. “Essentially, they had to pay their taxes and these other outstanding bills twice. It was definitely a big setback, but we’re getting them back on track.”

Although the scale of the alleged theft scheme is different, there are obvious similarities between the case against Miller and the case against another resort area property manager and accountant concluded earlier this year. Last April, a Worcester County grand jury indicted William Scott, president of Scott and Associates, a local accounting and property management firm, on six counts of theft and theft scheme for cleaning out the accounts of a handful of condominium associations over a two-year period.

Worcester County Deputy State’s Attorney Steve Rakow prosecuted the Scott case and is at the helm of the Miller case as well.

In August, Scott was found guilty of two counts of theft scheme over $100,000 and one count of theft scheme from $10,000 to $100,000. Scott was sentenced to a combined 50 years in jail, all but 10 years of which was suspended, and he was ordered to pay nearly $800,000 in restitution to the victims. While the scope of Scott’s theft schemes are clearly much larger then Miller’s alleged scheme, there are obvious parallels in the two cases.

“Hopefully, justice is served and the Marlin Cove owners will see all or at least some of this money returned,” said Braniff. “From a good news sense, Marlin Cove has a very active Board of Directors and a lot of the owners have stepped up in the wake of this situation. It took this issue to be a catalyst for that, but everybody is very involved and the association is very strong.”

The recent charges against Miller, and the Scott case, illustrate the importance condo associations hiring reputable and accredited property managers and accountants.

“We’re fully accredited, licensed, insured and bonded,” said Braniff of Ocean Point. “We go through a lot of training to maintain the professional accreditation and we go out of our way to make sure we do that. You have to have accountability and transparency and there has to be checks and balances in place to ensure you don’t end up in a situation like this.”