Crime

Former HOA treasurer admits embezzling more than $100,000

The Charleston Harbor neighborhood at 71st Terrace and North Brighton Avenue in Kansas City, North, has about 200 single-family homes.
The Charleston Harbor neighborhood at 71st Terrace and North Brighton Avenue in Kansas City, North, has about 200 single-family homes. File photo

The former treasurer of a Kansas City homeowners association pleaded guilty Thursday to stealing more than $100,000 from her HOA over 2 1/2 years.

Loretta A. Lock, 78, was charged in Clay County Circuit Court in January with embezzling from the Charleston Harbor Homes Association. Lock, a real estate agent, served as treasurer of the HOA from August 2007 to August 2015. According to a grand jury indictment, she stole money from the homes association between February 2013 and July 2015.

Lock’s guilty plea comes three weeks after The Star published a series that explored the explosive growth of homeowners associations and found that HOAs wield far more power than homeowners realize, with some actually tormenting the residents they’re supposed to support. HOA boards are run by volunteers who often have little training, the series found, and a lack of oversight over the industry can foster an environment ripe for embezzlement.

The Charleston Harbor neighborhood at 71st Terrace and North Brighton Avenue in Kansas City, North, has about 200 single-family homes.

HOA president Chaz Wood told The Star that the original agreement was for Lock to plead guilty to a Class C felony and make full restitution to the HOA. But on Tuesday, Wood and the HOA’s attorney said, the Missouri Supreme Court issued a ruling in another case that effectively allowed Lock’s crime to be classified as a Class A misdemeanor.

Lock, who has been out on $100,000 bond, will be sentenced on Oct. 21. The maximum sentence she could receive is one year in prison and a $1,000 fine. The HOA is recommending probation, restitution of $109,045 within 30 days of her sentencing and an order prohibiting her from going to casinos while on probation.

The theft was discovered last summer after the nine-member HOA board was replaced at the association’s annual elections. Wood said when he and another newly elected board member went to the bank to add their signatures to the HOA’s account, they learned someone had just deposited $50,000.

“We got suspicious and filed a report with the police,” he said. “We think she was trying to repay the money for that year and lost track of what she’d actually taken.”

At her hearing, Lock admitted to writing 97 checks to herself on the HOA account, ranging in amounts from $250 to $3,200. She also wrote five checks to her husband — who was the HOA’s attorney at the time — for what she described as legal services, but some of those checks had been voided or stubs were missing. According to prosecutors, Lock also made numerous cash withdrawals from ATMs at area casinos.

Missouri Real Estate Commission records show Lock has a current license as a “broker salesperson” and is affiliated with Platinum Realty of Missouri.

Her license expires June 30, 2018.

Her bio on a Platinum Realty website says she has been involved in real estate since 1970.

“I have experience and knowledge of a wide variety of real estate including HUD homes, commercial, farms and ranches, short sales, residential etc.,” it says. “I also have experience as an auctioneer. ... I feel I stand out from other agents due to my vast knowledge and experience. Honesty is the best policy!”

Nearly 20 Charleston Harbor residents attended Lock’s hearing Thursday. Afterward, many were visibly angry at the plea deal. Lock still lives in Charleston Harbor.

“I know everybody would like to have seen the felony conviction stand,” Wood told them as they gathered outside the courtroom. “But that was beyond our control.”

He said he realized some were upset that the HOA recommended probation instead of jail time for Lock.

“But do we want blood or do we want restitution?” he said. “Our main goal was to get back the money that she stole and do what’s best for the community.”

Wood said that although the HOA’s governing documents require outside audits of the financial records, the previous boards hadn’t had any done in years in an effort to save money. That, he said, will change.

“We had our audits done this year and had our CPA go back and balance the books through 2009,” he said. “We’ve worked our tails off to build back the trust and turn things around.”

Nila Ridings, an HOA reform advocate from Overland Park who attended the hearing, said the outcome of Lock’s hearing was a huge disappointment.

“This case is further proof of what I’ve said for years,” Ridings said. “HOAs are a thieves’ paradise. Stealing over $100,000 from your neighbors carries such a minute penalty it’s almost as rewarding as hitting the jackpot at the casino.”

Judy L. Thomas: 816-234-4334, @judylthomas

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