Jackson Jambalaya

More embezzlement (alleged) has been discovered in the Ridgway Lane scandal.  The Dinsmor Homeowners Association's Board of Directors said $217,782 was missing from funds managed by Ridgway Lane.  Ridgway Lane is a homeowners association management company in Flowood.  It stands accused of embezzling nearly $2 million from various homeowners associations in the Jackson metro area.  Dinsmor also sued the company as well as David L. Lane  in Rankin County Circuit Court this morning.

The Dinsmor HOA Board of Directors sent the notice posted below to its members yesterday:

First the good news:  Dinsmor is neither broke nor facing bankruptcy.  There won’t be an increase in fees nor a special assessment as a result what has occurred.  As someone has already commented, the Dinsmor Board is continuing to pay bills, keep the lights on, maintain the grounds, have the clubhouse ready for holiday parties, and decorate the community for Christmas.  As of today, we have $29,433.84 in our operating account, which is $13, 262.37 more than we had in our September financial reports.  We believe there are 4 invoices outstanding and issued checks have cleared; but there may be small invoices and expenses like utilities to cover till the end of the year. Tuesday, four Board members provided Community Bank with the proper forms used to remove Ridgway Lane (RL) from control of our accounts, allowing Community Bank to release both information and remaining funds to Dinsmor.  Community Bank is providing a disk with 8 years of bank records regarding our accounts and the most recent year in hard copy.  The process at the bank took about an hour (provided one’s paperwork is in order). Ours was, as we had been putting it together since last Friday.  During this time Community Bank agreed to monitor our accounts for any unusual transfers.  While we were there, a parade of individuals was going through Community Bank making similar requests and changes; so many in fact that a procedural team was set up to facilitate the process for returning control of HOA accounts to their Boards.  What has happened didn’t just happen to Dinsmor, and in all probability we will continue to see many more victims come forward.

Now for the bad news:   As I mentioned yesterday, our operating funds were pretty much correct for the end of the year.  However, our reserve fund and our CD, which were believed to be safe and secure, were targeted just as other HOA’s reserve funds and CD’s were (gated HOA’s who reserved funds for repairing their streets suffered higher losses, and one HOA representative mentioned they only had $320 in their operating fund).  As of September 30^th, we should have had $125,683.90 in our reserve fund, but instead had $2,482.58.  Our CD of $94,581.55 is not there at all.  All totaled, $217,782.87 was taken from our reserve fund and our CD.  Despite this the Board will continue services provided for Dinsmor residents and maintain our neighborhood.  As we normally do, we will send out annual fee notices and begin collecting fees for 2020 at the end of this year.  It is critical that residents submit their fees as early as possible after receiving their notices.  Our projected income for 2020 based on our membership is $367,500 ($183,750 every six months).  Our expenses have run between 82%-85% giving the Board $55,125 to $66,150 for special projects and improvements.  As we did before our reserve was fully funded, we will use these 2020 fees to continue with improvements and to begin building up our reserves - while we wait to see what restitution may come from civil and criminal actions.  We have been advised that restitution in these types of white-collar cases often takes a while. 

As for criminal and civil actions, we have consulted with professionals and have been referred to legal representatives who are working with other HOA’s.  Late this afternoon a legal complaint was drafted by Watson Heidelberg PLLC against Ridgway, Lane & Associates based on the information learned so far, and tomorrow morning that complaint will be filed in the Circuit Court of Rankin County in order to protect our claim and our rights.  The FBI and the District Attorney have also been notified.  Ultimately this may end up in the hands of the U.S. Attorney’s Office, who could take up the investigation and pursue restitution (as well as incarceration) dividing that restitution among the HOA’s.  But this will take time, and the Board plans to continue looking after Dinsmor’s needs and rebuilding our reserves.

Our legal representatives will also examine our insurance policies (which are paid up and valid until February 2020) to determine what coverage we have relating to our loss and what improvements may need to be made when the policies are renewed.

This morning Board members went to the Ridgway Lane offices and removed six boxes of documents pertaining to Dinsmor.  They also obtained access to electronic files that were placed on a thumb drive and removed.

   

Starting tomorrow, the Board will begin interviewing five candidates who have offered proposals to become Dinsmor’s new property manager.  Whoever is selected will not have their name on Dinsmor accounts and will not be allowed to sign checks.  Invoices will continue to be reviewed by the onsite property manager who works closely with our vendors, but checks will be signed by two members of the Board for distribution.  The bank will be supplying all Board members with electronic access to Dinsmor statements to monitor transactions and confirm that these transactions are being properly reported by the new management company.  A new management company will be in place in time to prepare for the collection of fees at the end of December.

This is very important, and I’ll send out a message addressing only this item.  ANYONE WITH A DRAFT TO PAY THEIR DINSMOR HOA FEES TO RIDGWAY LANE MUST CONTACT THEIR BANK IMMEDIATELY AND CANCEL THAT DRAFT.  ONE RESIDENT HAS BEEN TOLD BY THEIR BANK THAT SINCE THE DRAFT IS MADE OUT TO RL, ONLY RL CAN CANCEL THE DRAFT.  THAT IS INCORRECT.  YOU ARE NOT REQUIRED TO CONTINUE PAYING DRAFTS IF THE RECIPIENT IS INVOLVED IN THESE TYPES OF LEGAL CLAIMS.  YOUR BANK NEEDS TO CAREFULLY CONSIDER SUCH A REFUSAL.  EVEN IF YOU HEAR THAT THE RECIPIENT’S ACCOUNTS ARE FROZEN, DO NOT RELY ON THAT, CONTACT YOUR BANK, CANCEL YOUR DRAFT, AND DON’T TAKE NO FOR AN ANSWER.     

We recognize that some members have been frustrated and seeking more information since the Board’s first notice.  We understand firsthand the frustration of only receiving sporadic information, but the Board couldn’t provide what it didn’t have.  A few have asked why we didn’t call an emergency meeting.  The Board had the choice of dealing with the emergency, or calling a meeting to talk about dealing with the emergency, with very little information to offer.  We chose to deal with the emergency first.  There will be time for a meeting after we get through these first critical days of taking possession of our accounts, protecting our claim, replacing the management company and rebuilding Dinsmor’s financial support structure.

There is a lot left to learn in this situation.  As we find out details, we will provide them to you. 

Dinsmor began investigating Ridgway Lane's management of its accounts after the Bridgewater HOA sued the company as well as two of its officers, David L. Lane and David W. Lane in Rankin County Circuit Court last week.  The company managed over 20 HOA's in the Jackson metro area alone.  A multitude of Ridgeway Lane HOA clients have discovered funds missing from their bank accounts.

Dinsmor sued the Lane and Ridgway Lane in Rankin County Circuit Court today.  The case is assigned to Judge Steve Ratcliffe, III.  Attorney Masion Heidelberg represents Dinsmor as well as other HOA's pursuing claims against the Lanes.