The Diablo Grande Residential Association caused a stir two weeks ago when it claimed $200,000 had been embezzled by a management company, but Stanislaus County Sheriff Adam Christianson says nobody told him or his office about it. An unnamed M&C Association Management Services employee "committed a series of improper and perhaps illegal actions," wrote Guillermo Marrero of the homeowners' association in a letter to residents dated June 20. The company returned more than $200,000 in "misappropriated funds" to the association, whose officers lean toward finding new management, Marrero wrote. Marrero said Thursday morning he would return a telephone call, but did not by Friday evening. Christianson, whose office has jurisdiction in the resort community in western Stanislaus County, said: "We have not received any official complaint or request to investigate anything related to an alleged embezzlement." The association has come under fire by some residents, who formed a nonprofit called Homeowners for the Betterment of Diablo Grande. The nonprofit sued the association's board members, challenging an August election that resulted in one member being seated and the appointment of two other members. Critics claim the new board members are puppets of those who operate Diablo Grande's acclaimed golf courses. Marrero's letter says board members hope to "work with" the plaintiffs "to see if the scope of the issues can be narrowed," sparing resources for "more productive endeavors." Meanwhile, "we will vigorously defend ourselves" and seek to have those suing pay attorneys' fees, Marrero wrote. A court-ordered conference is scheduled for Sept. 19. Two board members also hold board positions with Western Hills Water District, whose intent to increase water fees raised the ire of many residents last year and prompted a state Fair Political Practices Commission probe in December. The board controls water, sewer and storm drain issues for Diablo Grande's 368 homes. At the time, no board member owned a home in Diablo Grande and all worked for the community developer, World International LLC, which bought the golf courses and building rights in 2008. The current board, with a newly seated member living in Diablo Grande, approved fee increases days before Marrero's letter went out to address $8 million in debt discovered after World acquired the project. As of Aug. 1, homeowner rates will go from a $35 monthly base rate to $51.67, with automatic jumps to $68.34 in a year and to $85 a year after. People also pay an additional $1.25 for every 750 gallons used. Commercial rates will rise from $1.25 per 750 gallons to $1.65 next year, $3.30 the year after and $4.95 in 2013. Untreated water used at golf courses will take yearly hops per acre-foot from $875 to $1,075, $1,275 and $1,475. A contentious June homeowners meeting revealed a divided community, Marrero said in his letter. He pledged to hold new elections in August for all board members except himself; to post financial reports on the association's Web page; to draft a new bid policy; to set up ethics rules for board members and committee members; to upgrade the association's Web site; and to establish an advisory committee. Richard Mowery, an attorney who filed the corruption complaint with state officers last year, said new elections would be useless if World continues to control elections by virtue of lot ownership.
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Thursday, October 13, 2011
Diablo Grande embezzlement is news to sheriff
