Dozens of Lowcountry homeowners associations sue property manager
ABCNews 4
By Andy Paras and Stacy Jacobson
09 March 2016

CHARLESTON, S.C. (WCIV) — More than 50 homeowners associations from Seabrook to Summerville filed a lawsuit this week alleging that a property manager billed at least some of them for services that weren't provided.

The nearly five dozen plaintiffs filed the lawsuit Monday in Charleston County Circuit Court alleging that Marshland Communities and its owner, Karen Colie, misappropriated funds from at least some of them.

Colie did not return calls seeking comment Wednesday and Thursday. The Marshland Communities office did not return calls for comment Thursday.

The lawsuit includes affidavits from both current and former employees of Marshland who allege properties were charged for services that weren't rendered.

Meredith Millender, an employee since 2016, filed an affidavit said Colie admitted to her that she billed some of the properties for services that weren't provided. "She stated, "I made some terrible mistakes in an effort to stay afloat and it has caught up with me. I tried hard to fix everything but it was too much,'" Millender wrote in the affidavit. "She further stated, 'I can't even begin to describe the sorry, regret, shame and fear ... I'm very aware of what my actions have done to people's lives."

Adam Kraemer, a Marshland employee since July 2015, said in an affidavit that he confronted Colie about suspicious transactions on March 4 and she also admitted it to him. According to Kraemer's affidavit, Colie told him, "I only took money from the ones I could get away with."

Lauren Fox, association manager at Pelican Cove on James Island, also stated she found Colie had spent thousands of dollars on services never rendered to fix flooding damage.

Pelican Cove homeowner Rob Davis said he became aware of the allegations Monday.

"We don't know much at this point other than some money was taken, approximately $5,000," Davis said. "Upon finding out, we began looking for another company to represent us and that process. We had our lawyer look into it further."

Jamie MacGeorge, a homeowner in Majestic Oaks, said he had no prior knowledge of the lawsuit until ABC News 4's Stacy Jacobson asked him about it. He lives in his home with his wife and two children and said he paid about $500 a year in HOA fees.

"It sucks. You don't know if it's one person or the whole thing. But it sucks to have people to take money from you," MacGeorge said.

At the plaintiffs' request, a judge on Monday appointed a receiver, IMC Resort Services, to take over the accounts. The judge also ordered the Charleston County Sheriff's Office to secure the company's office at 3730 Bohicket Road on Johns Island, as well as its records and bank accounts.

A representative from the Federal Bureau of Investigations said agents were aware of the lawsuit but wouldn't comment on whether they had opened a criminal investigation.

Another hearing on the lawsuit is scheduled for March 14.

The lawsuit listed Derek Dean as the plaintiffs' attorney but he did not return calls made by ABC News 4.

Among the plaintiffs listed in the lawsuit are the homeowners associations for
• Affirmation Oaks,
• Bridgewater at Carolina Bay,
• Courtyards at Wescott,
• Dune Crest,
• Folly Oaks,
• Golf Club at Briars Creek,
• Gulf Shore Villas,
• Homes of Hidden Oaks,
• Ibis Glade,
• Island Bluff Villas,
• Legend Oaks Plantation,
• Liberty Hall,
• Majestic Oaks,
• Oak Park,
• Ocean Neighbors,
• Ocean Winds,
• Pelican Cove,
• Sealoft Villas,
• Shadowmoss Plantation,
• Wescott Plantation and
• Wexford Sound.

"I only took money from the ones I could get away with."
—Karen Colie

That statement says it all. If the condo or HOA boards do not have proper controls in place, then they are very vulnerable to fraud. What's more, as the owner of the property management company, she would know which boards were on top of things and which ones were not.

Dozens of Charleston-area homeowners’ groups sue property manager over billings
The Post and Courier
Warren L. Wise
10 March 2016

Nearly four dozen homeowners’ associations throughout the Charleston area filed a lawsuit this week alleging a Johns Island-based property manager billed at least some of them for services they didn’t receive.

The complaint, filed Monday in Charleston County Circuit Court, alleges Marshland Communities and owner Karen Colie “misappropriated funds” from at least some of the groups. Colie and a representative from Marshland Communities did not immediately return a call for comment Thursday.

Marshland employees alleged in court affidavits that charges were made by Marshland on several accounts that could not be substantiated.

Adam Kraemer, an attorney employed by Marshland as an association manager for about two dozen communities, said in an affidavit he confronted Colie on March 4 and she admitted to him she billed associations for services the company didn’t provide.

“‘I only took money from the ones that I could get away with,’” Colie told him, according to court documents.

The company’s chief operating officer, Meredith Millender, also said in an affidavit she asked Colie March 3 about some suspicious transactions. Colie told her she had billed associations for services never rendered.

Colie selected seven associations to take money from

Millender said Colie told her Colie selected seven associations to take money from.

“‘I made some terrible mistakes in an effort to stay afloat, and it has caught up with me,’” Millender said Colie told her. “ ‘I tried so hard to fix everything, but it was too much.’ ”

Lauren Ellison Fox, another attorney employed by Marshland as an association manager, said she reviewed accounts for some homeowner group in February and found charges to Pelican Cove Property Owners Association on James Island for services never rendered.

January payroll checks bounced

In court documents, Kraemer said the issue first surfaced earlier this year when January payroll checks bounced. He began reviewing financial records of several homeowners’ associations in February and could not find justification for legal charges for some of them. For example, two billings to Shadowmoss Plantation in West Ashley show more than $6,700 for “court” fees that could not be accounted for, he said.

He also noticed other discrepancies in a few other accounts, including homeowners’ associations at Shellring near Daniel Island, Liberty Hall Plantation in Goose Creek and Harbor Creek on James Island.

Not knowing the extent of the alleged improprieties, the suit was brought by 47 homeowners’ groups and others and “all others” managed by Marshland. The company represents nearly 60 properties, according to its website.

The associations are being represented by Charleston attorney Derek Dean, who asked the court this week to appoint an outside company to take over Marshland’s books.

IMC Resort Services Inc. of Hilton Head was named the receiver to oversee Marshland accounts for all of the plaintiffs. A temporary restraining order prohibits Marshland from removing any records or funds associated with the homeowners’ associations.

A hearing on the temporary injunction is set for 9:30 a.m. Monday.

Colie and Marshland defaulted on a $14,000 debt to American Express in 2014

In a separate case, Charleston court records show Colie and Marshland defaulted on a $14,000 debt to American Express in 2014 and were ordered in March 2015 to pay it.


Property manager admits to defrauding Charleston communities of $700K
The Post and Courier
By Andrew Knapp
21 October 2018

A Charleston-area property manager accused by dozens of homeowner associations of pocketing more than $700,000 of their money now faces prison time on a federal criminal charge.

Karen Colie, who owned Marshland Communities on Johns Island, was charged Wednesday with wire fraud. She promptly pleaded guilty to the felony that carries up to 20 years behind bars and a $250,000 fine. She was not immediately sentenced.

Filed in U.S. District Court in Charleston, Colie’s plea agreement called for her to pay back every “identifiable victim” that fell under her scheme.

Colie had already been the target of a lawsuit in which 47 homeowner groups accused her of overbilling or charging for services that her company never performed. All told, she had boasted being hired by nearly 60 neighborhoods, including Shadowmoss Plantation in West Ashley and Liberty Hall Plantation in Goose Creek.

The criminal charge came through an “information,” which in federal court allows for a quick guilty plea without a grand jury indictment.

Her attorney, Cameron Blazer of Mount Pleasant, said the housing crisis that contributed to the recession a decade ago had created many difficult years for property managers.

“Marshland became completely overwhelmed financially,” Blazer said in statement. “As Marshland’s leader, Karen made choices she deeply regrets.”

For five years until 2016, Colie billed clients for services never performed or for items that the homeowner associations never received, the court document said. She also overcharged for the collection of delinquent dues and inflated the amount of time that employees spent representing their clients in court, the paperwork alleged.

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