Financial Crime - Illegal Disbursements

Is The Summit's HOA committing a financial crime every time it issues a check to Turner Padget for legal work done on the case filed by that law firm in the name of the HOA?

And could the law firm be committing a financial crime every time it receives an illegal disbursement from the HOA?

What is the crime?

Every dollar spent by the HOA must be for a valid, proper, business purpose. That's common sense; right? There is also a legal reason for paying out HOA money only for legitimate expenses.

A year ago, in August 2024, when Danny Trapp consulted the law firm about Gus Philpott (me), he directed them to send me a Cease and Desist Letter. He consulted them on behalf of the HOA and at HOA expense. It accused me of "false accusations and continual harassment". That letter was dated August 28, 2024.

When that Letter, which threatened legal action, was sent to me, did a judicial proceeding commence?

The first sentence in Art. XIII, §10 Litigation in the CC&Rs reads,

"No judicial or administrative proceeding shall be commenced or prosecuted by the Association unless approved by a vote of seventy-five (75%) percent of the Voting Members."

A judicial proceeding certainly did commence when that law firm filed a Summons and Complaint in the name of the HOA against me on December 30, 2024.

The legal problems for the HOA are
  • the Board of Directors never authorized the Cease and Desist Letter;
  • the Board of Directors never approved the lawsuit;
  • the Board of Directors never authorized Danny to tell the lawyers to file the lawsuit;
  • the Board of Directors never approved the filing of a Motion for a Temporary Restraining Order against me;
  • the Board of Directors never sought or obtained the approval of 75% of the Voting Members;
  • the Voting Members never sought or obtained the approval of 75% of their homeowners.
Has the full board been kept informed of the status and cost of the lawsuit? (Hint: the answer is No.)

The law firm has submitted invoices to the HOA for its legal services. The HOA has paid many of those invoices. There will be a large bill for July work, which included a Hearing on July 24, 2025 and preparation of demands sent to me.

The bills are for legal work done on a case that was never authorized or approved by the Board. In fact, the case is prohibited by Art. XIII, §10 of the CC&Rs, because the Voting Members never approved it.

Who is responsible for the payments being made by the HOA to the law firm for this unauthorized, unapproved, and prohibited case?
  • the Board Treasurer;
  • the Board President;
  • any other Board member who knows about the payments and who is not objecting to them on-the-record;
  • anyone approving the payments without objection;
  • the HOA's Property Manager;
  • CAMS;
  • Is the HOA itself responsible for any of those bills (payments)?
  • If Board Members were not duly-elected (legitimate), could the persons claiming to be directors and officers be held personally liable?
The Richland County Sheriff's Department and the South Carolina Attorney General have been asked to investigate. Contacts have also been made with SLED, the South Carolina Department of Consumer Affairs, and the Fifth Judicial Circuit Solicitor's Office.

What would the FBI have to say? 

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