BERLIN — While criminal proceedings against Berlin businessman Bill Scott, indicted in April on theft and theft scheme charges after allegedly bilking several resort area condo associations out of hundreds of thousands of dollars, proceeds on a parallel course, a Circuit Court ruling in the civil case this week will force the defendant to pay over $437,000 sought by one of his victims.
Earlier this year, the Worcester County Bureau of Investigation (WCBI) began an investigation into alleged “account improprieties” carried out by Scott and his company, an accounting firm based in Berlin that also handled property management for several condo associations in the resort area.
The investigation began when it came to light Scott had allegedly absconded with hundreds of thousands of dollars in operating and reserve account funds through a two-year pattern of misappropriation and fraud.
In advance of any criminal charges against Scott, one of his alleged victims, the Assateague House Condominium Council of Unit Owners, in early April filed a civil suit against Scott in Worcester County Circuit Court seeking over $1 million in compensatory and punitive damages. About three weeks later, a Worcester County grand jury indicted Scott on six counts of theft and theft scheme.
On Tuesday, a Worcester County Circuit Court judge made two significant rulings in Assateague House’s civil suit against Scott. The first ruling granted a motion for summary judgment to the plaintiff, essentially forcing Scott to pay $437,416 in compensatory damages to the Assateague House Council of Unit Owners. In a nutshell, the ruling is a legal judgment holding Scott liable for the claims against him filed by the condo association.
The second ruling was an order of default, which, in simplest terms, means Scott did not make an effort to contest the civil suit against him. The default order could hold Scott liable for the remainder of Assateague House’s claims against him. The ruling basically asserts the claims against Scott are undisputed because he defaulted, or did not contest the charges.
The $437,417 judgment against Scott represents the figure he misappropriated from the association through various schemes, but does not include an additional $100,000 in “special consequential damages.” In addition, Assateague House is seeking $500,000 in punitive damages against Scott.
According to the complaint filed in April, Assateague House hired Scott in June 2008 to do the accounting for the condo association and perform certain other management functions including collecting fees and assessments, making bank deposits, paying bills, keeping financial records and other fiscal duties. However, the association soon began to notice irregularities with its accounting and financial records.
According to the complaint, three separate Assateague House accounts were targeted during the scheme including the association’s operating account, a construction account and a money market reserve account. At first, it appeared the misappropriations came in the form of direct payments to Scott and Co., but later forensic accountants allege Scott began to shuffle funds from Assateague House to another client he handled, the San Remo condominium association.
The largest of Scott’s alleged improprieties came from Assateague House’s money market reserve account, from which $325,791 in direct checks to the company were drawn. In addition, the complaint alleges Scott misappropriated $73,600 from Assateague House’s construction account. According to the complaint, Scott and Co. also caused unauthorized advances to be made upon Assateague House’s open line of credit with PNC Bank totaling $125,000.