Condo Associations Detail Alleged Theft Schemes

SNOW HILL — The trial of a Berlin businessman indicted in April for allegedly bilking several resort area condo associations out of hundreds of thousands of dollars got underway this week with victims lined up to outline his alleged schemes and a videotaped confession highlighting proceedings.

In April, a Worcester County grand jury indicted Bill Scott, president of Scott and Company, a public accounting and property management firm, on six counts of theft and theft scheme for allegedly clearing out the accounts of a handful of condominium associations over a two-year period ending earlier this year. His alleged victims included the Sunset Village, Assateague House and San Remo condo associations, from which Scott allegedly absconded with over $800,000 from various operating and reserve accounts.

The trial began on Wednesday and victim testimony was heard through much of the day. Also on Wednesday, a videotaped confession taken last February when Scott’s alleged theft scheme began to unravel was shown. When the various victims began to learn the extent of the alleged theft scheme, Scott voluntarily went to the Worcester County Bureau of Investigation (WCBI) and essentially admitted the crimes in videotaped confession.

On the videotape, Scott alleged a single client, Robert Hammond of Atlantic Physical Therapy, had threatened him over unpaid taxes Scott had been hired to prepare and file, and that the embezzlement scheme he pursued on the various condo associations had spiraled out of control. In essence, Scott admitted to carrying out the theft scheme against the condo association in order to avoid the alleged threats by Hammond.

For his part, Hammond said yesterday he had hired Scott to handle his personal and corporate taxes and later learned his accountant had not made any payments to the state or the IRS for a period of four years.

“The bottom line is, he got me for around $400,000, and I’m still paying penalties and interest,” he said. “He didn’t file my taxes for four years and I was paying the whole time.”

Hammond said yesterday he was under the impression Scott was preparing and filing his taxes all along until he started receiving notices from the IRS and the state.

“I kept getting tax notices and he kept telling me everything was okay,” he said. “I have faith in humanity, and I guess that cost me this time.”

As for the allegations spelled out in Scott’s videotaped confession, Hammond denied ever threatening the accountant although he did go to his office to pick up a check.

“He gave me the check and I left and ran straight to the bank,” he said. “I never went there to threaten him and I never would. The two guys that went me were visiting from Italy and they are probably the least threatening guys I know. They are two of the nicest guys I’ve ever met and both of them go about 5’6” each. They are not the least bit threatening.”

Before the videotaped confession was shown, prosecutor Steve Rakow spent much of the morning establishing Scott’s alleged theft and deceit.

“This is not an ordinary theft case,” he said during his opening statement. “This is a theft case carried out with ruthless cunning and carried out over a period of a number of years. It finally unraveled to the point the only way out was to go to the police.”

Reese Cropper, president of the Insurance Management Group, which handled the insurance needs of several of the condo associations victimized in Scott’s theft scheme, testified early on he began to suspect something when one of the association’s insurance premiums had not been paid.

“The insurance carrier was not going to renew their policy,” he said. “Through negotiation, I got them to take them back. When I learned the premiums weren’t being paid, I developed concerns.”

Cropper testified he immediately contacted Sunset Village Condominium Association President Steve Davis to alert him.

“When I realized there were some money issues, I called the condo president and told him I had reason to believe they needed to look into their funds,” he said. “I didn’t have any real evidence at that point, just a gut feeling.”

Davis said his association immediately contacted the bank to check on the various accounts and learned they had been cleared out.

“Things started to unravel in February 2011,” he said. “That was when I got that feeling in my stomach you get where you’re like ‘we’re in really big trouble now.’ I called the bank and his aunt, who is the manager incidentally, informed me we had about $8,000 to $9,000 in our accounts. Now typically, we would have had between $240,000 and $250,000 in those accounts.”

Davis said the association had little warning Scott had allegedly depleted the various accounts.

“We thought everything was being managed properly and everything was being paid on time,” he said.

San Remo Vice President Eric Rohl said his association began to look into their own accounts when alerted about the potential scheme.

“We were concerned, but we thought maybe our concerns weren’t valid,” he said. “When we checked our accounts, we found out all of our money had been taken but about $1,500.”

Like Davis, Rohl said the San Remo association did not see Scott’s alleged theft scheme coming.

“He handled all of our financials,” he said. “He had our absolute trust.”

Assateague House Condominium Association Treasurer Larry Perkins testified about forged checks, unauthorized payments to Scott’s company from association coffers and even payments to other associations from Assateague House’s account. By the time, Assateague House was alerted of the ongoing scheme, its coffers had also been cleared out to the tune of over $400,000.

“We called PNC Bank to check on the status of our accounts and we were floored by what we found out,” he said. “We had $1,779 in our operating account, $54 in our construction account and $21 in our money market account. I expected to see hundreds of thousands of dollars in those accounts.”

After hours of testimony on Wednesday, the trial was continued when Judge Richard Bloxom said he wanted more time to review the weighty documents associated with the case. It is scheduled to resume next Tuesday.

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