Property Manager Steals $1.1 Million From Multiple HOAs
Rose Kasande Bailey has been sentenced to two years in prison for stealing more than a million dollars from homeowner associations she managed.
Rose Kasande Bailey, 60, from Warrenton, Va., was sentenced on Nov. 26 to two years in prison for crimes related to a scheme to defraud homeowners, according to a DOJ press release. Bailey committed wire fraud, stealing $1 million from homeowner associations (HOAs) that she managed through her company.
Bailey pled guilty to one count of wire fraud, according to her plea agreement. She was sentenced to 24 months in prison and three years of supervised release, as stated in her judgment documents. Bailey must also pay restitution to return the money she stole from the associations.
Rosewood, LLC
Bailey created her limited liability company, Rosewood, on April 26, 2012, listing herself as the company’s manager, according to the indictment. Rosewood contracted with HOAs to manage their properties and perform duties such as collecting HOA dues from residents, arranging for property maintenance, repair and grounds upkeep, bookkeeping and contracting utility companies.
The Rosewood company provided management reports before each regulatory meeting, which included financial statements, according to the indictment. Bailey managed over 70 HOAs in Virginia, providing services to locations including Leesburg, Reston, Lorton and Falls Church in March 2023.
Embezzlement Through Unapproved Expenses
Bailey controlled two bank accounts, and each HOA had a bank account of its own, managed by Bailey’s Rosewood company, according to the indictment. Bailey held sole signing authority over the HOAs’ bank accounts but was required to get HOA Board approval to make unbudgeted purchases over $1000.
Starting May 22, 2018, until some time in February 2023, Bailey transferred about $1.1 million from various HOA bank accounts to her Rosewood account to pay for the business’ rental space and payroll expenses, according to the indictment.
Bailey also used the funds to pay her personal expenses, credit card payments and business loan payments she had acquired when starting a new HOA management firm. The HOA boards did not approve these expenses.
Altered Bank Statements
Bailey also took steps to cover up her misappropriation of HOA funds.
Bailey altered HOA bank statements in her meeting reports to cover up her usage of unauthorized HOA account funds, according to the indictment. Between May 2022 and September 2022, Bailey provided one HOA with a bank statement that suggested a balance of $200,000 more than what was actually in there.
During the timeframe of the scheme, but before the discovery of the fraud, one of Rosewood’s HOA clients decided to seek new management, according to the DOJ press release. Bailey transferred $600,000 from other HOA bank accounts to hide the evidence of her taking money and falsifying the financial statements of the exiting HOA.
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