Friday, August 14, 2015

HOA's 19-Year-Old Bookkeeper Suspected Of Falsely Claiming $318K In Tax Breaks On Behalf Of Co-Op, Then Pocketing $109K; Innocent Unit Owners Face Possible Tax Foreclosure If Pay Back Not Forthcoming

In King County, Washington, KIRO-TV Channel 7 reports:
  • The King County Sheriff’s Office is re-launching an investigation after a KIRO 7 story found a major mistake by the Washington Department of Revenue led to $318,000 in taxpayer money being wrongly released.

    “Boil it all down and it really doesn’t pass the smell test,” Sgt. Stan Seo said.

    Now King County is trying to get back the money, which it handed over to a 19-year-old who was overseeing the books at an Auburn housing co-op, Homewood Terrace.

    Ruvim Savin filed an application with the DOR claiming the co-op has mostly low-income residents. The application included the alleged incomes of residents, many of who said they never reported their incomes and at least one of whom said she had not lived at Homewood Terrace for four years.

    The DOR made a mistake and granted Homewood tax exempt status even though it did not qualify, so King County refunded property taxes for 2011, 2012, 2013 and 2014 totaling $318,145. According to multiple sources and bank records obtained by KIRO 7, Savin then made out a check to himself for more than $109,000.

    “I would like to know where that money went,” resident Liz Cruz-Wallace said.

    On Monday, Seo told KIRO 7 the sheriff’s office was restarting its investigation, which had been put on hold after detectives and the prosecuting attorney's office decided the issue was likely a civil matter.

    ***

    King County Department of Executive Services spokesperson Cameron Satterfield said Homewood Terrace has until Aug. 28 to return the money, which pays for county programs like public health, courts and jails. “Even though this was just an error or an oversight by the Department of Revenue, it’s up to us to get that recovered and make taxpayers whole,” Satterfield said.

    If it's not paid back, at least in part, the co-op could go into property tax foreclosure by the end of 2016, a fact that worries Liz Cruz-Wallace.

     “Do we have enough to pay this back?” she asked. “I am very, very angry that I may be placed in a position where I’m going to lose my home.”

     KIRO 7 spoke to Savin by phone Monday. He said he didn’t have time for an on camera interview Monday and denied any wrongdoing.

    Two weeks ago, in response to questions about the $109,000 check, Savin said he paid out a tax consulting company from his own account, then paid himself back. But in searching business license records, KIRO 7 discovered that company was created after he had paid himself.

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