My Story

This situation that I describe below is under litigation, and currently winding its way through the courts. Once the litigation is complete, I shall reveal the names of the various parties involved: something that I cannot do at this time.  

I have a friend who is a member of a Homeowners Association (HOA) in Washington, D.C. and was Secretary of the board of directors when this all started.  Please bear in mind that this HOA is a private nonprofit corporation that had not broken any law, and whose directors' only error was to seemingly run afoul of a bank that had not only illegally bounced its checks, but also was connected to powerful friends in government.

I called him one day and I could not believe what he was telling me. I thought that his story was too far-fetched until I was able to observe the court proceedings in person. I was then struck by how vulnerable bank accounts were to bank fraud.  I also realized how vulnerable corporations in the District of Columbia were to government overreach and intrusion in their internal affairs. I had to share this story the best way I could.

Hopefully, you can learn from this story and from the information on this site to protect yourself or your organization from being completely at the mercy of one bank, and not having access to any of your funds should that bank decide to go rogue, or worse yet should the bank empty your account in order to deny you the funds needed to hire a lawyer.

Friend: "Big G, the landscaper for our HOA called to say that our check to him bounced, which in turn caused his payments to be returned by his bank.  I told him, that was impossible because the checking account balance was more than adequate to cover his check. So, he forwarded me the notice from his bank.  Sure enough, the HOA's check was dishonored and the reason given by our bank was that the signatures were missing."


Me: "Okay..."


Friend: "The signatures are not missing.  The signatures are clearly visible on the copy of the bounced check... Let me deal with this emergency, I'll personally take care of this contractor but I have to call the Treasurer, and the President.  I'll talk to you later."
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Later
Friend: "We had to get an attorney involved because other payments are being returned as well. This is a disaster. We have electricity, water, trash collection, landscaping etc. and we need to pay our bills.


Me: "What you really need to do is, you need to change your bank!"


Friend: "You're right, but right now, the HOA needs access to its accounts in order to pay its bills.  I can speak to the other directors about establishing accounts with another bank. Let me see what is possible right now."
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Later


Me: "Any good news?"


Friend: "No, it is worse.  We were able to setup accounts with another bank. However, we are totally locked out of the accounts in our main bank which controls virtually all of our deposits. Furthermore, we found out that our tax payments to the DC Treasurer were dishonored as well.

Me: "The bank bounced a tax check? How stupid is that?"


Friend: "I still cannot believe it. Why would anyone bounce a payment to the government?  I spoke to the attorney and he is trying to get an injunction against the bank so that our bills can be paid. We'll see how it goes".
.....

I later learned that the HOA was forced to file a lawsuit against the bank in an effort to have its bills paid. The bank had responded by filing a motion to dismiss the lawsuit. My friend and the HOA's attorney attended the first hearing. Even though The HOA did not succeed in getting an injunction against the bank, the bank was ordered to honor the checks that it admitted to not paying, and the bank did not succeed in having the lawsuit dismissed at that hearing. My friend described the events of the hearing and I did not believe him so he got the transcript and sent me a copy.
I had to apologize to him.  If I had not read the transcript, I would not have believed it. I decided to attend every hearing since then.  The experience has been surreal, and a real eye-opener.  I decided that I would create this site in order to warn others so that they could avoid a similar fate.

Ideally, the court should be impartial and have no friend. However, if the court has you as a friend, consider yourself as one of the luckiest people in the world. Left becomes right, up becomes down, white becomes black, and your lie becomes the truth. I have witnessed this!
While sitting in court, I have witnessed the following first-hand:

• A judge remove an elected Board of Directors.
• A judge appoint an interim Board of Directors and compel members to serve on said Board as unpaid volunteers.
• A judge coerce persons to initiate a lawsuit.
• Court dockets manipulated and falsified multiple times.
• A lawyer barred from representing a client in court because the judge did not know the lawyer.

My friend tells me that the HOA is still under court control and is likely to remain so until the bank is protected by the statute of limitations. The funds that were in the HOA's bank accounts are still sitting in the court registry. When I visit him, It is obvious that the HOA is in a degraded state. The homeowners' lawns have become overgrown with weeds, the exterior upkeep of the homes seems to have diminished and the neighborhood is not what it used to be. There is probably not much that the homeowners can do because the current board is appointed by the court, and it can only be removed by the court.  There are no elections.
Meanwhile, I am getting a good view of what state control looks like and it is not pretty. My friend tells me that he can experience what it feels like to live in Cuba just by being right here in the nation's capital.