New York's Cooperative and Condominium Community

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LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

A Board Follows Its Gut Instinct and It Pays Off Big Time

Matthew Hall in Legal/Financial on September 17, 2015

Queens, New York City

Photograph by Lorenzo Ciniglio
Exterior of Forest Hills South 
Sept. 17, 2015

In what the Queens district attorney compared to a "Ponzi scheme," Richter's alleged crimes included providing falsified business records to disguise the thefts. He initially denied wrongdoing before pleading guilty to third-degree grand larceny, a Class D felony, on January 25, 2011. Richter was sentenced to up to three years in prison on April 19, 2011 and signed five confessions concerning the money he stole.

What did this mean for Forest Hills South? With its significant financial resources, the Queens co-op could have been prime pickings for a thief like Richter. Another co-op caught up in Richter's scam had to sue to reclaim the $350,000 he plundered. Other buildings in similar traps had to take legal action to find more than $1 million in missing funds. For Forest Hills South, however, it was a different story: the board's diligence prevented the co-op from falling victim to white-collar crime.

"We double-check everything and take nothing for granted," explains George McGrath, the board president of the posh co-op, which includes manicured gardens, elegant fountains, and beautiful Georgian architecture. "There was a sense that we were missing some marks with Richter and needed to move to the next level. If you step back and see that you're doing all the work and you have to keep your hand in everything 24/7 to make sure everything is in check, then something is not right. We took precautions that enabled us to dodge a bullet."

Photograph by Lorenzo Ciniglio

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