DENVER — It was Christmastime in 2021, and Michael St. James didn’t feel much like celebrating.
From his top-floor condo overlooking Denver’s Capitol Hill neighborhood, St. James said he spent much of his time in the final weeks of December trying to recover nearly $30,000 that had disappeared from the bank account of his condo’s homeowners association.
“Half of the board has checked out for the year. ... The bankers are about to go on vacation, too,” said St. James, who volunteers as the HOA’s board president. “Meanwhile, every day, I’m looking at the bank account, like, ‘What’s going on?’”
More than eight months later, the London House HOA said it still has not recovered its funds. The HOA realized its money was missing, St. James said, when he asked its management company if he could use the association’s bank card to pay for building expenses.
The company, Mastino Management, replied he should not use the card because the community’s account was restricted by the bank over “some fraud activity.” St. James said he followed up with the bank, which told him that Mastino had reportedly paid $29,996 out of the HOA’s funds to a “fraudster” after receiving a “compromised email” with an invoice requesting immediate payment.
The HOA said the transaction was so large it exceeded the balance of the association’s operating account, funded by monthly dues and other fees paid by owners of the building’s 65 units. Records gathered by the HOA show the bank reached out to Mastino several days after it processed the payment because the community’s account was overdrawn, and Mastino authorized the bank to take $20,000 out of the community’s reserves to cover the transaction. It was a payment so large that, under the community’s rules, the board would need to sign off on the expenditure and transactions, but the board told Rocky Mountain PBS and ProPublica that Mastino never asked.
The board fired Mastino in February. St. James said the company has since refused to provide the HOA with its accounting records and has also yet to provide proof of the emailed invoice to the HOA. Mastino reported the incident to police in Aurora, where the company’s office is located, but an investigator closed the case after police said the company failed for months to provide bank statements for the transaction, despite repeated requests.
About two months after its funds disappeared, the board reached out to the office of Denver’s district attorney for advice. The office’s staff advised the board to file a complaint with the HOA office in the Colorado Department of Regulatory Agencies (DORA).
The board put together a detailed complaint, attaching the evidence it had gathered, and sent it to regulators. A few weeks later, it received an email reply it still struggles to understand: Like every other complaint received by the state HOA office this year, London House’s concerns could not be investigated. That’s because HOA managers, also known as “community association managers,” are no longer subject to any government oversight in Colorado.
“I feel like we have done every single thing we were supposed to do,” St. James said. “And yet we don’t seem to get any remedy for getting ripped off for $30,000.”