MS WV

Concord, NH

#106 Oct 25, 2012
WV Res reply wrote:
<quoted text>I am no lawyer but here is my best guess. Case now extends out side of state of NH. Someone is missing.
When I hear 'federal' in a case like this, the first thing that I think of are RICO laws. There are so many things that can cause a case to go federal: sending funds through the mail, crossing state lines or transferring money to a different party across state lines, ordering people underneath you to do the criminal acts, fraud surrounding a bankruptcy or securities, embezzlement with special circumstances, etc. Sadly, I believe that these are all very real possibilities in this situation.
WV Res

Waterville Valley, NH

#107 Oct 25, 2012
Another WV...sounds like the untouchables are touchable, right Eliot Ness? From what I have gathered, the dollar amount did it. Not that it really matters the trigger, the damage is done. I would be surprised if individuals are not charged tomorrow.
Waterville Weekender

Santa Clara, CA

#108 Oct 25, 2012
Fred wrote:
Does anyone know whether individual condo owner's home owner's insurance covers losses from theft like this? If so we could all submit claims for the our payments that are missing.
That is a great question Fred. Hope someone shares an answer.
WV RESIDENT MacLeish

Chicago, IL

#109 Oct 25, 2012
I previously wrote a longish post under the name "Waterville Valley resident." I think it is a mistake to post anonymously and I regret I did that. There are serious allegations being made here and I feel there is a necessity for transparency at all levels.
I am curious for the source of the report that the FBI is involved. It does not surprise me but I don't know if it is true. Federal criminal law prohibits mail fraud under Title 18 of the United States criminal code and sending phony bank statements through the postal service, if true, would be only one of many bases for federal jurisdiction. There are parallel provisions under New Hampshire law as well as laws in all states where statements could have been sent. It is possible that the person or persons responsible could be prosecuted in several state courts, but that is unlikely. Generally, decisions about which agency would prosecute are made after discussion among the agencies that could prosecute -- the NH AG's office, US Attorney Office and even the Grafton County attorney (we have a great one, Lara Saffo). Yes, in some cases there can be ugly fights between federal and state law enforcement agencies about who is going to take the lead (Oklahoma city attack) but most of these decisions are based on legitimate criteria, such as available resources and a comparison of potential penalties (the jurisdiction that has laws with tougher sentences for the predicate acts usually has advantages). Then there are other considerations; Waterville is not without some connected homeowners and they are might angry ..... But let's not assume that this is going to be a federal prosecution and if it is, it won't necessarily involve other acts that occurred "out of state" or other things we don't know.
While we are at it, let's not let this site become a witch hunt about individuals like Bill Stone whose name has been bandied about cavalierly here. I don't know what happened except that it had to involve at least one human being. And it may be just one. I am not a prosecutor, but I have spent a large part of my career doing in house financial fraud investigations for non-profits and businesses. Contrary to what many seem to assume, a great deal of small business fraud involves only one person, even in a closely held family business. Family businesses tend to have lax controls and the family members, almost always overwhelmed, tend to parce out the bookkeeping,, financial management piece to one person -- particularly with a business the size of Stone Management. In short, it is entirely possible that only member "of the family" was involved.
I have been away for most of the last two weeks; ironically doing an in house investigation for a health care agency (not involving financial fraud). We have a terrific group of people who live in the Valley and a great group of vacation homeowners. This crime was a betrayal that affected a large number of innocent people who are going to miss paychecks and probably mortgage payments as a result of this crisis. There is a huge amount of suffering. I hope that the prison sentence in this case will be measured in years and not months. "Property crimes" don't involve violence but they involve huge amounts of human suffering; you tend not realize that until it affects you or your friends and neighbors. And the prospect of long prison sentences in this area is actually a proven deterrent -- unlike many crimes of violence. I plan to be right there at the sentencing hearing and to give my impact statement. You can too.
One of the reasons that I don't mind driving 50,000 miles a year is because of the people who live here and the natural beauty that surrounds us. I am already feeling a little different about Waterville; but I know we will rebound. But let's not engage in the business of character destruction until we know the facts. Someone is responsible but no knows who. Let's remember the values that caused us to call this place home.
Also local

Wilbraham, MA

#110 Oct 25, 2012
Can anyone confirm that Sean filed for divorce 4 weeks ago? This would lead me to believe he was aware of the illegal activities and started the damage control. As for the employees, most can find another mower to follow.
Also Local

New York, NY

#111 Oct 25, 2012
That was alot of talk...I'm sure you mean well...but really...anyone that lives around here and can see thru the bullsh**t knows that this act was most definitely well planned out and had more to do with lack of morals and personal gain than caring about ones neighbor.
WV Res

Waterville Valley, NH

#112 Oct 25, 2012
Great post Eric. Trust me it's true. I will only post the facts, the FBI is taking over for whatever reasons. Sean has not filed for divorce. Until I am certain I will will refrain from all accusations.
I care wv

Wilbraham, MA

#113 Oct 25, 2012
Everyone has lost focus. Right now there is a squirrel having his way on the inner workings of what used to be a nice vacation condo. What has occurred is wrong, but it seems like paying your electric bill only to have someone steal your payment after check was cashed. Tough to see how this causes much damage other than postponing a new roof or more mulch around a tree stump. I think Waterville will survive, it survived the Tom C . era.
Sherlock Holmes

Lowell, MA

#114 Oct 25, 2012
Well, here is my theory..

No names mentioned but the company was owned by two people up until a couple years ago. The second owner left the company. She was bought out by the first owner. Obviously that entailed a large amount of cash. If that cash was taken out of operations, that could have started a huge cash shortage. She was also the brains of the business and kept the business clean and profitable with great record keeping.

The new person/office manager/daughter in law did get some training on keeping accurate records. Once that oversight stopped and the cash flow problem started, she saw an opportunity to take massive short cuts and ultimately realized she could take large amounts of cash and forge bank documents without notice, at least in the short term. By the time the owner realized what was going on, cash was missing, creditors not paid, and association accounts were wiped out.

Rather than replace the missing funds from personal savings or whatever, the owner decided to sell the company to an out state business. He would basically take the money and run, while the new owner would assume all liabilities. The plan backfired when they were exposed days before the completion of the sale.

I would like to think he was going to use the money to refund all that was taken but it now does not appear that was his intentions.

Sounds like a Lifetime Movie of the Week...
Just Passing Thru

Red Hook, NY

#115 Oct 26, 2012
Sherlock Holmes wrote:
Well, here is my theory..

Rather than replace the missing funds from personal savings or whatever, the owner decided to sell the company to an out state business. He would basically take the money and run, while the new owner would assume all liabilities. The plan backfired when they were exposed days before the completion of the sale.
Nobody buys closely held small businesses like this and assumes liabilities. Buying the corporation and its baggage woul be foolish. Even when the known liabilities are minimal a buyer will typically purchase the assets only and leave the selling corporation to settle up its own liabilities, perhaps out of the proceeds. Buyers don't want to buy liabilities or surprises. They want land, buildings, and equipment. Even if they were interested in buying the corporation, it wouldn't take a whole lot of due diligence to reveal the liabilities that would kill the deal.
Friend of WV

Sharon, MA

#116 Oct 26, 2012
Just Passing Thru wrote:
<quoted text>
Nobody buys closely held small businesses like this and assumes liabilities. Buying the corporation and its baggage woul be foolish. Even when the known liabilities are minimal a buyer will typically purchase the assets only and leave the selling corporation to settle up its own liabilities, perhaps out of the proceeds. Buyers don't want to buy liabilities or surprises. They want land, buildings, and equipment. Even if they were interested in buying the corporation, it wouldn't take a whole lot of due diligence to reveal the liabilities that would kill the deal.
This is correct..no one is going to make a purchase like this and assume unknown liabilities. There would be language that would prevent that. I am stunned by what has happened. I would like to comment on the accusations I have read about assoc. board members being accountable and even part of the scam. This is absurd. These people dedicate their time without compensation and are not deserving of accusations w/out facts. No one will ever want to be a board member again if these type of factless accusations continue. These people must be going through hell right now.

Also, for everyone discounting the effects it will have on owners and asociations..you are wrong! Your board members have a huge task in front of them to make things right.
Offer your help..they will need it!
Robd

East Windsor, CT

#117 Oct 26, 2012
I've been involved in several acquisitions of privately owned businesses and my experience tells me that you are 100% correct Just Passing Thru. I've read every post on this in regards to SPM and it amazes me how bizarre some of them are. Let's wait for all the facts and not rush to judgement. Lot of whining haters. Waterville will survive- as I care WV stated.
Just Passing Thru

Red Hook, NY

#118 Oct 26, 2012
Friend of WV wrote:
<quoted text>
This is correct..no one is going to make a purchase like this and assume unknown liabilities. There would be language that would prevent that. I am stunned by what has happened. I would like to comment on the accusations I have read about assoc. board members being accountable and even part of the scam. This is absurd. These people dedicate their time without compensation and are not deserving of accusations w/out facts. No one will ever want to be a board member again if these type of factless accusations continue. These people must be going through hell right now.
Also, for everyone discounting the effects it will have on owners and asociations..you are wrong! Your board members have a huge task in front of them to make things right.
Offer your help..they will need it!
2 words: "Fidelity Bond" aka "lying, stealing employee insurance." I haven't heard any mention at all that this type of coverage was in place. Maybe it is. If not, the boards shoul look into covering themselves and their members AND they should require proof from their management companies that they have fidelity bonds with coverage exceeding the maximum amount that could be in a reserve fund and potentially be stolen.

Perhaps there was a time when coverage like this was unnecessary or even insulting in the context of a long standing good faith business relationship. Not anymore.

Since: Oct 12

Norway, ME

#119 Oct 26, 2012
Waterville Skier wrote:
<quoted text>
With all due respect, Mr. Sullivan, you appear to be somewhat of an ambulance chaser here. My association's loss is well over six figures - our reserve fund is GONE, something we worked so hard to build in anticipation of PLANNED large ticket items. So not only do we need to accelerate our condo fees to meet our day-to-day operations, but now we need to replace our much needed reserve fund which will be a heavy financial burden. Yet you and Mr. Roper see us, the victims, benefiting from this and follow up with some free advertising - sorry, gentlemen - I just do not see it.
There is no respect involved when you call someone an ambulance chaser. In a free and open community of communication I have stated very clearly what my thoughts are and what I've learned from having terrible things happen to associations I've personally owned in before. People want to know what to do and where to turn. I have not contacted a single association directly for your information. Several have been referred to me or called me directly to request help. I own and run one of the most reputable and award winning remodeling and maintenance firms in the United States. I am a recipient of the US Chamber of Commerce Blue Chip Enterprise Award. I have over forty regional and national awards for excellent workmanship and business practices. So to see your comment today is disheartening especially since you posted anonymously. Let me know which association you are in and if I am speaking with your trustees, I will suggest you go with an out of town firm where the principal is not a resident, does not have a town square office and is not visible everyday in Waterville Valley.
Sherlock Holmes

Lowell, MA

#120 Oct 26, 2012
We were told last week by Stone's insurance carrier that Stone carried no bonding insurance whatsoever. For years, he reported to us in our meeting minutes that we had a "Directors and Officers" liability coverage of $1,000,000. We delegated the treasurer's day to day responsibilities (payable and receivables) to Stone. The actual coverage was way less and will not cover losses. Our bad for trusting him and not reading the policy ourselves.
Whateverville Valley

Albany, NY

#121 Oct 26, 2012
Any truth to the rumor that Courtney and Sean are having a benefit concert to bring awareness to "Stupid".
Just Passing Thru

Red Hook, NY

#122 Oct 26, 2012
Sherlock Holmes wrote:
We were told last week by Stone's insurance carrier that Stone carried no bonding insurance whatsoever. For years, he reported to us in our meeting minutes that we had a "Directors and Officers" liability coverage of $1,000,000. We delegated the treasurer's day to day responsibilities (payable and receivables) to Stone. The actual coverage was way less and will not cover losses. Our bad for trusting him and not reading the policy ourselves.
Typically, D&O policies cover the board or its individual officers/directors against claims by third parties (members, stockholders, employees, customers) arising from the official actions of the board. It also protects individuals directors and officers from personal liability for such losses. You probably wouldn't serve if you we're personally on the hook for such losses.

D&O is more "ordinary course of business" coverage that makes it possible to pay claims to others, via the insurance policy, for actions by the board or its members that result in losses to others. Fidelity bonds cover losses suffered directly by the association as a result of either a dishonest board member or property manager stealing the association's assets.

Even if Stone was correct regarding the amount if D&O coverage in place, it would not typically cover this type of loss.
Former condo director

Boston, MA

#123 Oct 26, 2012
Whether the D&O insurance kicks in or not, there are directors who outright refused to insist that a particular condo's accounts required at least one director's signature on checks. They also refused to insist to Bill Stone that duplicate bank statements be mailed to the board directly from the bank. I sold my unit and quit the board in disgust. These directors should be ashamed of themselves and should quit not only the condo board on which they still incredibly sit but also every board on which they sit. R and A: you know who you are! I have offered to testify as to what went down in the past. Also, a good source reported that all three Stones including the two who are said to have separated were seen at a posh Boston restaurant a couple of weeks ago drinking Dom Perignon and whooping it up. People, it is all still a scam!!! The young mother is being claimed to be the only involved party i'll bet since she would be able to negotiate the best plea agreement. How stupid can anyone still be to believe in any of the three's innocence? I just wish Tyler Springs had shared information. Supposedly they got all their money out last March but kept it quiet. One good thing: Stone's lawyer, Peter McGrath, has a 1.2 out of 5 peer rating on Martindale Hubbell, the major resource site to check out lawyers. Jeff Bartholomew is rated 4.4 out of 5. Get smart and get together and sue the bastards as one with an outside lawyer who is a shark! I wish lynchings were still the fashion. Good luck!
WVFan

Waterville Valley, NH

#124 Oct 26, 2012
Former condo director wrote:
Whether the D&O insurance kicks in or not, there are directors who outright refused to insist that a particular condo's accounts required at least one director's signature on checks. They also refused to insist to Bill Stone that duplicate bank statements be mailed to the board directly from the bank. I sold my unit and quit the board in disgust. These directors should be ashamed of themselves and should quit not only the condo board on which they still incredibly sit but also every board on which they sit. R and A: you know who you are! I have offered to testify as to what went down in the past. Also, a good source reported that all three Stones including the two who are said to have separated were seen at a posh Boston restaurant a couple of weeks ago drinking Dom Perignon and whooping it up. People, it is all still a scam!!! The young mother is being claimed to be the only involved party i'll bet since she would be able to negotiate the best plea agreement. How stupid can anyone still be to believe in any of the three's innocence? I just wish Tyler Springs had shared information. Supposedly they got all their money out last March but kept it quiet. One good thing: Stone's lawyer, Peter McGrath, has a 1.2 out of 5 peer rating on Martindale Hubbell, the major resource site to check out lawyers. Jeff Bartholomew is rated 4.4 out of 5. Get smart and get together and sue the bastards as one with an outside lawyer who is a shark! I wish lynchings were still the fashion. Good luck!
Lynchings? Really? Nice job at inciting people. Facts have not even come close to coming to light. Maybe you should go to Salem for Halloween and learn how mass hysteria played out.
WVFan

Waterville Valley, NH

#125 Oct 26, 2012
Chip Roper Roper RE wrote:
Thought everyone should know, Meredith Village Savings Bank is going to finance property in Waterville Valley with portfolio loans. They are going to look at each development on a case by case basis. They are looking for a plan to recoup funds and agreements with management companies to move forward. I checked their rates today and a 30 year fixed portfolio mortgage is a little over 4% which is pretty good. They are 60-90 days out from time of application to closing because of current refinance boom. Way to step up MVSB!(This is not an advertisement for either agency or bank, just wanted to share)
Chip,
Thanks for the heads up on this. And your posts (knowing you) have been nothing BUT helpful and informative to the group.

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