May 22, 2026
It’s hard to go a day without reading that another Homeowners Association has experienced fraud.
Earlier this month, a Cypress, Texas HOA manager was accused of embezzling $53,000 using HOA cards. Funds were reportedly spent on DoorDash, Amazon, and other personal expenses.
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It’s been a nationwide trend. In Denver, a former HOA manager was accused of stealing $55,000. In Florida, a former HOA president pleaded guilty to what authorities called the largest homeowners association fraud case in U.S. history.
Homeowners, take note: there are strategies to spot and prevent fraud, and doing so could stop fraudsters from spending your HOA fees on their own personal expenses.
HOA fraud is trending
Shiesha Laquette Sparrow, 50, was arrested on felony charges in early May. Real Estate News reported that the alleged crimes were uncovered as early as September 2025.
Tammie Smith, the general manager who replaced Sparrow, said she discovered a binder full of unopened HOA statements behind a desk in their office. Smith found dozens of transactions unrelated to HOA responsibilities, including cellphone bill payments. Sparrow allegedly transferred $42,000 to her personal account via CashApp.
The case mirrors two similar investigations. One, a Denver association accused its former manager, Brett Hardt, of using his access to the HOA’s funds via online banking to drain $55,012.88. Hardt transferred the money to an account he controlled.
In another case, former HOA bookkeeper Alexandra Delacaridad Gonzalez was charged with allegedly taking more than $200,000 from two HOAs by writing personal checks to herself. Gonzalez spent some of the money on shopping, plastic surgery, and vacations.
The Hammocks community of Miami-Dade County, Florida, also fell victim. Marglli Gallego and her husband were convicted of stealing more than $11 million by fabricating vendor expenses and inflating contract amounts. Roughly 18,000 residents were affected.
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Simple solutions to protect your HOA
Embezzlement is considered fraud, and homeowners should be aware of potential solutions.
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The root cause may simply be a lack of oversight. Forensic accounting company Hovland Forensic & Financial, which investigates fraud claims, says internal management for HOAs tends to be weak or nonexistent.
Especially important is the separation of duties. A standard business strategy that divvies up responsibilities among multiple members who can check each other is essential. Since HOAs are often managed by a few unpaid volunteers, this type of control is often unused. It’s easier to prove fraud when the numbers are scrutinized by multiple members.
It’s not just management. HOA members also play a role in catching fraud. It was thanks to attentive members that Gonzalez was caught embezzling hundreds of thousands of dollars. Two HOAs reported the potential fraud to the sheriff’s office, leading to Gonzalez’s prompt arrest.
Members who suspect fraud can request copies of the HOA’s financial statements. Hovland says it’s a red flag when board members or managers try to hide the financial statements or say the ledger is “too complicated” for ordinary homeowners.
Here are more options to help safeguard your HOA:
- Protect your association’s bank accounts through the Federal Deposit Insurance Corporation
- Require two signatures to transfer funds
- Never attach a debit card to the HOA account
- Separate duties between the treasurer and another board member
- Reconcile transactions promptly
- Know your vendors to eliminate the potential for fictitious companies
- Use electronic payments through property management software
- Keep financial authorizations up to date
- Get annual account audits
- Learn to recognize red flags
- Get accounting or financial training
Hovland suggests homeowners who suspect fraud document everything and hire an attorney. It may mean that the maintenance of shared spaces and the quality of life in the community deteriorate.
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Cole Tretheway has been covering money for four years. He started as an intern at The Motley Fool Money, covering best-of credit cards, savings accounts, and financial products. He's since expanded into wholistic personal finances, including the psychology of money.
