LA Mirabelle HOA Board’s crime during the preparation and execution of “Rehabilitation Project”
1) Breach of Fiduciary Duties by the Board
a) The elaboration of the main contract for the execution “Rehabilitation Project” with the General
Contractor was made without the approval of a majority of the members of the Association.
Board used their right stipulated for CC&R’s Article III Management and Operation Section D as
a cover for signing off (ratification) the contract with the terms of execution less than 1 year
The terms of execution of the contract evidently (deliberately) put too low, in order to get the
right to sign the contract without the approval of a majority of the members of the Association.
The fact of understating of the terms of the contract execution under 245 calendar days from the
date of the commencement had the premeditated, planned nature, because the contract did not
provision the measure of the responsibility by the General Contractor for the derangement
(wrecking/failure) of the terms and quality of the execution of the contract from 245 days to
516 days (the actual terms of the contract execution). In reality “construction” is still going on
Actually, CC&R’s is compiled the way that it creates unlimited legal ground (sphere of action) for
causing material (pecuniary) damage to the ordinary owner and creates Board’s privileges
without placing any boundaries (limitations) in the Board’s activity.
The situation is being formed so, that the owner can lodge a complaint or protest against
these juridical infringements only in one year, since the moment of signing the contract by the
In spite of all this, the Judge replies that he does not discover it as the violation, because the Board
could not foresee everything, and General Contractor according to the contract does not bear the
. responsibility for the terms of execution contract either.
It came full circle. How come, on what grounds in the capacity of criterion for the recognition
as a fact of special significance of Rehabilitation Project was taken the terms of project execution,
and was not taken the cost of Special Assessment per 1 owner.
It was only made with one purpose to create juridical conditions for the Board for abusing their authority.
b) Board willingly engaged in the action of Non-Judicial Foreclosure initially for twelve families (owners) and had no mercy for Senior Citizens who lived in our Building since (long before) construction. Board utilized the tactics of threatening and intimidation with Foreclosure towards the Senior, ordinary owners who did not want to waste their hard earned money without having financial calculation and technical proof(s).
Board of Directors administered tyranny towards the other owners; and in case of the individual protest Board raised your Special Assessment share by implementing additional fees and costs.
Board’s organized the Action of Non-Judicial Foreclosure without participating in Alternative Dispute Resolution with a neutral third party up to the procedure of “Notice of Default and Election to Sell under a Notice of Delinquent Assessment and Claim of Lien.”
Selection of the General Contractor by the Board
It is very important moment in accomplishing Rehabilitation Project in Condominium.
Using the legitimate right in signing any contract with the terms of execution less than 1 year, the
Board has the right to choose the General Contractor without introducing/presenting him in front of all owners and without execution of the procedure of the competition of executors (selection of executors) on Open meeting of all owners.
The terms of execution of the contract in less than 245 days (less than 1 year) released Board from the necessity of the contract’s approval by all owners. Therefore, Board signed the contract privately, covertly without any discussion and approval of all owners and without the right to choose General Contractor by all owners.
The owners gave their money and were deprived of their rights to choose the executor- General Contractor.
General Contractor usually nominated (appointed) by the recommendation either by President of the Board or Vice-President of the Board.
President of the Board and Vice-President of the Board are playing the main part (role) in making very important decisions by the Board.
General Contractor is confidential person/agent of the President and Vice President of the Board and
all financial activity carries out through General Contractor. General Contractor is the first link (main link) in the process of the distribution and circulation of currency (money), although personally he (General Contractor) might not be the specialist for repair and rehabilitation of the condominium. He plays role of the first recipient of the money and then (subsequently) he fulfills the role of the distributor of the money to all executors of repair jobs.
The ordinary owner does not know General Contractor and thus the ordinary owner cannot influence anyhow on effectiveness of repair jobs.
Financial and Economic Crime by the Board
1) The main methods of obtaining of superprofits:
Exorbitant payment for the architect and engineer services “allegedly” necessary for execution repair jobs without real necessity (useless expenditure).
a) Architectural Firm PAO paid $87, 170
b) Architect/Engineer Specifications submitted to city for permits is $42, 000
c) Balconies: Structural Engineer “required” changes cost $47, 870
Total waste is $177, 040
These expenditure would be excluded if the Board for the execution of each repair job used the principle (method) of direct agreement without mediators in General Contractor, using the principle of bidding process and openly informing the all owners about it.
But this won’t do for Board members. The Board members need secrecy, mystery and confidentiality. Board needs it for their own interests.
2) Utilization of the method of exorbitant surplus payment in the most expensive type of Project.
Special attention deserves the problem of Additional job, which was included in Repair project as
an addition according to the initiative of the members of the Board of Directors of LA Mirabelle HOA that made up $668, 866.10: 41 =$16, 313.81 per 1 unit for Plumbing (Copper Water Pipes and Cast Iron Drain Pipes).
Whereas the replacement of old galvanized water-pipes by new copper ones was necessary, then the replacement of durable modern reliable combined quality sewerage system with the usage of Plastic Pipes as well as Cast-Iron Drain Pipes by the new sewerage system did not have neither technical necessity nor economical expediency. Especially as the main standpipes in toilets remained old, and was not replaced by the new ones.
The labor for the replacement of vertical Plastic Drain Pipes was not foreseen by the scope of work of the Architectural firm PAO as a result of executed technical inspection (Phase A) in 2006.
The main argument that the Board refers to is the result of homeowners voting on Special membership meeting that was held on June 2008 (There will be a vote of the membership on the following issues: ”Whether to approve including the additional fixes and upgrades to the building’s plumbing and drainage systems, without a need for further assessment”).
It was the planned trick (ruse) and misinformation in this formulation.
HOA Management Professionals, Inc (Vice President-CEO Mr. Bob Berthold) uses this verbiage (formula) for the voting when Board wants to get the approval of their idea.
The whole truth is that the Board and Management Company planned to spend on this inexpedient, non-effective job the enormous total of $668, 866 and obtain for all that the superprofit in the amount of $400, 000.
This superprofit obtained by General Contractor (Mr. Laurent Simon) was secured not only by the method of usage of unreasonable prices but also at the expense of using unskilled workers for the execution of plumbing work including gas-welding labor.
In witness of the fact that Board used unreasonable price is the proposal of the Professional Plumbing, Inc:
1) Proposal from John’s Plumbing, Inc (Copper Repipe Specialist) dated on 11-04-2009
Bid for work to be performed:
Copper Repipe and Drain Estimate
This is the cost for 41 Units ($300, 000)
This is the cost for 1 unit ($7, 317.00). It includes: Labor $4, 317 + Materials $3, 000
The above mentioned total includes all types of expenditure for this order including Permits (please see the attached Proposal of John’s Plumbing, Inc)
So, the overcharge for 1 unit is $16, 313.81- $7, 317.00 =$8, 996.81
Note: There are three proposals from several Professional Plumbing Firms that neither one of them matches this exorbitant price tag of $668, 866 that Board spent on this labor. I named the highest price of $300, 000 in this example that was obtained among three Professional Plumbing Firms bids.
I took this overcharge fact into Small Claims Court –North Central Glendale (Case # 09S01738). The court denied me by the motivation of incorrectness of the method of the price comparison.
That is to say, the Court approved the principle of arbitrary payment (cost) of usual standard repair jobs, which allows increasing the expenditure of more than 3-5 times. Such treatment (attitude) from the Court to the Board’s exorbitant overcharge (surplus payment), justifies the Board’s activity in their crime and it is directed to do damage to ordinary owners, who cannot really oppose the system of continuous overcharges and undisguised fraud conducted by the Board during “Rehabilitation Project”.
There is an illustration in point of the Board’s undisguised fraud.
1) According to LA Mirabelle HOA Building Repair Project 2008-2009 Payment Tracking Record, Board paid $45, 000 for the repair of old (the terms of exploitation is 34 years) gutters and downspouts made of galvanized steel.
According to the proposal of the Professional Firm “Gutter Masters” the cost of the replacement of all old gutters and downspouts by the new aluminum ones type 3” x 4” is $8, 087.
According to the proposal of the “Total Roofing, Inc, The Right Choice” the cost of installation bonderized metal gutters to replace the existing leader boxes and down spouts is $19, 600.
The decision that was made by the Board regarding gutters and downspouts repair after 34 years of exploitation with payment of $45, 000 is sheer embezzlement. It is simple waste of ordinary owners money.
2) According to the same contract (Scope of Work LA Mirabelle HOA Repair Project of 2008/2009) it was executed the labor of carpet replacement “Carpeting in hallways, east and west stairs, lobby stairs, gallery, and billiards room”.
The total surface area of the new carpet was made up of 1, 258sq.yard.
The brand (style) of the carpet is “Inspired”, color is brown and the method of the installation is glue down carpet installation in condominium.
The actual payment for this labor according to the Payment Tracking Record was made up of $62, 435 plus there was an additional payment according to the Change Orders ($14, 012.50 + $3, 703), see Change Orders 009 1st Floor hallway and Change Order 010 2nd and 3rd Floor.
Board paid for this labor the total amount of $80, 150. It was executed only 85% of the job. There is no new carpet installation in gallery, lobby, billiards room, east and west stairs and storage room.
According to the proposal of the “Capitol Carpet Co” the total cost of the same type of labor including the same material, labor, tax and removal of all carpet is $24, 802
a) 1258 yards x $19.00 = $23, 902
b) Top set base color to be selected 600ft x $1.50 = $900
The Total is $24, 802
According to the proposal of the “ART’s Flooring, Inc, NWFA Certified Professionals” it was offered to furnish and install 1, 258sq.yard of commercial carpet including the labor and materials for the sum of $25, 000.
Thereby, the amount (magnitude) of the Board’s overcharge (surplus payment) in execution of given labor was made up of $80, 150 -$25, 000 = $55, 150.
Note: The vendor (Adan’s Carpet) who actually installed this cheapest carpet without padding in our Building provided the estimate for the same labor in the amount of $17, 000
3) Pool and SPA
According to LA Mirabelle HOA Building Repair Project 2008-2009 (Payment Tracking Record), the total cost of repair jobs for Pool and SPA –new surface, plumbing, tiles, automatic filler made up $75, 849
Comparative analysis (data)
1. Sherman Villas HOA in April 2009 performed the similar type of repair of their Pool/SPA. The cost of the analogous Pool/SPA repair job in Sherman Villas HOA made up of $16, 375 (Jacuzzi even bigger in Sherman Villas HOA, Address: 14144 Dickens Street, Sherman Oaks, CA) (see the proposal and contract date April 21, 2009, the firm CRUZ Pool Plastering).
“Resurface Pool and SPA, it includes plumbing SPA, new tile, new break line tile, trim tile, split existing drains per County Codes, leak defect SPA, new wall steps, 2 coats of white plaster, 10 year guarantee.
And finally on this topic, according to the information received from the firm “Aquarius –USA Line, Inc”, the cost of the construction of the new Pool & SPA (size 32’x17’) makes up between $40, 000 - $45, 000. No explanation is needed.
The Jobs for Destroying and Making Worse Comfort of our Building
(Destruction of the Infrastructure of our Building)
With the purpose of providing the maximum comfort during the replacement of old windows and sliding doors by the new ones and also with the aim to decrease the expenditure (prime cost) for the purpose of obtaining superprofit the Board along with General Contractor made the decision to remove all Trees. General Contractor destroyed all perennial trees around the building; the total cost of this destruction made up $19, 522.
The green zone surround the building at (14569 Benefit Street, Sherman Oaks, CA) was planned and executed according to the general plan of the building construction in 1974. It had been presented for a long period of time as a clean ecological zone that was being given the constant cool and oxygen to the people. The Board’s action is the Ecological Vandalism.
The analysis of LA Mirabelle HOA Building Repair Project for 2008-2009 demonstrates, that HOA Directors (President Mr. Wesley Warner) and HOA Management (Vice President Mr. Bob Berthold) ransacked, wasted, squandered to the tune of $1, 817, 000 (note the embezzlement would be the worse if the remaining 4 foreclosed without court units gave Board of LA Mirabelle HOA their share of Special Assessment that makes up $195, 000)
Our HOA Management (Vice President/CEO –Mr. Bob Berthold) stated in their website that they have 165 client associations. If you multiply the amount of ransacked funds (stolen money from ordinary owners) in one association such as our LA Mirabelle HOA by even half of these 165 client associations you will get the economical crime of epic proportions.
Regarding the scale of crime (felony) committed by the Board during Rehabilitation Project testifies the following fact - each owner spent $48, 050, that is 30% of full cost price (at par) of 1 new two-bedroom unit, and each owner received as a result of it - the new windows and sliding doors, repaired balconies, paint exterior of the building, carpeting, pool-spa repair, copper water-pipes. The real price (nominal cost) of useful stated jobs does not exceed $17, 000 per 1 unit.
Consider the following facts that the prime cost to build brand new unit is $150, 000, and the Board spent $50, 000 (30%) on repair of old unit.
It was thought out, large-scale action with the increase of real price of the Project by three times with the whole purpose to create the conditions of misappropriation of super profits.
Board would use inflated estimates for repair work to pocket the enormous excess money for themselves. Our Association has suffered embezzlement, gross mismanagement and outright harassment of ordinary homeowners. We lost hundreds of thousands of dollars (I personally lost $56, 872 in 2009) from those “poor volunteers” on the Board and HOA Management “Professionals”, Inc.
The building (at 14569 Benefit Street, Sherman Oaks, CA 91403) that was built with 41 units now has only 33 owners (units).
P.S. It was made numerous failed attempts to get the details of Special Assessment Worksheet (LA Mirabelle HOA Special Assessment Received information as a Report for the year 2008-2009) by ordinary owners of condominium.
This information (The Sum of the balances of the creditor's accounts (for each charge customer) in the accounts Payable ledger LA Mirabelle HOA -Special Assessment for fiscal period beginning on November 1, 2006 and ends December 31, 2009) should indicate where, what and to whom the money ($1, 817, 000) for Special Assessment was transferred. We are interested in Financial Information about each executor of Repair Jobs.
P.S. After the completion of repair jobs for the replacement of Windows and Sliding Doors, starting on January 20, 2010 as a result of raining, the water has been penetrated from the top part of Sliding Doors and poured (flooded) over the floor into several units in our Building.
Thus, the executed and paid by the Board labor for the replacement of Windows and Sliding Doors does not provide the technical demands of hermetically waterproof protection (tightness) of all space, where the Sliding Doors are located. We also now have the issues with the Plumbing.
And this is only 1 month has been passed after the completion of “Rehabilitation Project” and no one among Board members wants to investigate the leak and make appropriate repairs.
On March 12, 2010, after two months of “completion” Rehabilitation Project I received the letter from LA Mirabelle HOA Board of Directors with the NEW additional Special Assessment for $17, 500.
Since March 20, 2010 there is Mechanics Lien recorded (Document #20100396381) in our property at 14569 Benefit Street, Sherman Oaks, CA 91403
There are the names of the people who involved in this exorbitant Fraud (Scam, Ransack, Embezzlement, Gross Mismanagement, Misappropriation of Funds, Money Laundering, Corruption)
Bob Berthold (mastermind of all this Fraud, etc) –CEO/Vice President of HOA Management Professionals, Inc (818)240-6515
Wesley (Wes) Warner –President of the Board of LA Mirabelle HOA (818)905 -5640
Tamara Gasparian –Board member for many years (Again Board member in 2010) -а Friend of Laurent Simon (General Contractor)
Inna Patlis –Board member for many years (New Treasurer started in 2010)
Alla Berelovich –Board member (Treasurer) for many years
Laurent Simon –General Contractor (Lic No CSLB 891544 B California, Lic. No 930608)
Jaleh. Berset – Board member (Again Board member in 2010)
Derek Gerrman –Board member (New President of the Board of LA Mirabelle HOA in 2010)
Vladimir Shakov –Former Board member (many times was in Board) and Current Technical committee member
Anatoly Boz –Technical Committee member
Herbert Horowitz - Former Board member (many times was in Board) and Current Technical committee member
Lee Aronsohn – Former Board member (many times was in Board)
Margaret Pope - Former Board member (many times was in Board). Again Board Member in 2010
Gary Mann –Former President of the Board
Adams Kessler LLC (Mr. Adrian Jay Adams, Esq, Mr. Matthew Gardner, Esq, Mrs. Karen Nagad, Esq) ----а many years cover up Board and HOA Management Professionals, Inc