Mar 8, 2026
A Miami Beach condo building is at the center of a fraud investigation that should catch the attention of condo owners everywhere: How closely are you watching the people who handle your building’s money?
Prosecutors say two men were jailed after allegedly diverting hundreds of thousands of dollars that were supposed to fund critical safety work, a reminder that when oversight breaks down, residents can end up paying the price.
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According to investigators, the case centers on the Euclid East Condos in Miami Beach, where property manager Francisco Obispo and maintenance worker Jose Hernandez Aguiar are accused of orchestrating a kickback scheme tied to the building’s required 40-year recertification (1), a process meant to ensure structural safety.
Alleged kickback scheme tied to condo safety funds
Authorities allege that the homeowners association paid roughly $370,000 to Hernandez’s company, JLB Repair LLC, for work connected to the recertification. Investigators say Hernandez was not a licensed contractor, and that after payments were issued, money allegedly flowed back to Obispo. Prosecutors claim Obispo received about $95,000 through multiple transactions.
“A property manager taking kickbacks ― it’s bad for condo owners because it secretly flips a manager’s role and his motives and incentives," Miami-Dade State Attorney Katherine Fernandez Rundle told Local 10 News in Miami (2).
The alleged scheme came to light after a board member noticed discrepancies in financial records and reported concerns to investigators. That board member was later removed after Obispo reportedly told others he posed a safety risk, according to investigators.
Both men have been arrested and face charges including an organized scheme to defraud, with Obispo also accused of receiving kickbacks.
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Why condo fraud can hit owners hard
For condo owners, stories like this land close to home because they rely heavily on property managers, boards and vendors to manage large sums of money. That money can include everything from maintenance budgets to special assessments.
In condo-heavy Florida, the stakes are especially high. Following stricter building safety laws enacted after high-profile structural failures, many condo associations are facing steep costs for inspections, repairs and reserve funding. Monthly fees and special assessments have climbed sharply in some communities.
When funds are misused, the consequences can ripple through the building. Residents may face delayed repairs, emergency assessments, legal fees or higher insurance costs. In worst-case scenarios, critical safety work can be postponed, increasing risks and financial exposure.
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Even rumors of financial problems can affect property values and make units harder to sell, since buyers and lenders often scrutinize an association’s financial health.
“No homeowner should have to worry about how their HOA is handling the association’s funds,” Rundle said in 2024 following a separate HOA fraud case (3).
What condo owners can do to protect themselves
While one would hope that associations operate responsibly, it’s smart to scrutinize that everything is running smoothly behind the scenes.
Reviewing annual budgets, reserve studies and financial statements can help spot unusual patterns, such as unexplained cost increases or frequent vendor changes. Attending board meetings offers insight into major decisions and upcoming expenses.
It’s also worth asking questions about who approves contracts, whether vendors are licensed and insured and how payments are tracked. Transparency, including independent audits, can deter misconduct and catch problems early.
Owners should pay attention to warning signs like resistance to sharing records, sudden leadership changes, or conflicts surrounding financial decisions. As this Miami Beach case suggests, when owners pay attention to the numbers, they may be the first line of defense against fraud.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CBS News (1); Local10.com (2); The Office of State Attorney Katherine Fernandez Rundle (3)
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
