Police have charged the owner of a now-defunct company with 25 counts of embezzlement in connection to money that went missing from the checking accounts of several homeowners associations.
Diana Kelly, 54, of Clayton, was arrested Tuesday afternoon and charged with taking more than $800,000 from 25 HOAs. Kelly was the owner and manager of Kornerstone Management Company, which operated the business operations of several homeowners associations in and around Garner and as far away as Wilmington.
Two of the charges against Kelly are considered Class C felonies, which means the amount of money taken from the victim was greater than $100,000. Those HOAs were the Village of Aversoro and Southern Trace. In the other 23 incidents, Garner Police Lt. Lorie Smith said the amounts taken were less than $100,000. In all, 27 HOAs were the victims of embezzlement, but Smith said, in two cases, the money taken from the HOA was returned before it was discovered missing.
Investigators determined that a 28th HOA that had filed a complaint did not have any money taken from it. Two of the HOAs were from New Hanover County. The other 23 involved were from Wake and Johnston counties.
Smith declined to say exactly how the money was taken from the HOAs that paid Kornerstone. “All we can say is that the funds were misappopriated,” Smith said.
Although charges have now been brought against Kelly, Smith said the investigation will remain open. She said investigators do not believe anyone else who worked for Kornerstone had any involvement in the case.
Police began investigating the management company Aug. 9 after receiving complaints from an officer of one Garner HOA who was having trouble getting access to banking records that were supposed to be managed by Kornerstone. Two days later, police executed search warrants at the company’s office on Benson Road in Garner and at Kelly’s home in Clayton.
In early September, Garner police took the unusual step of inviting officers from all the HOAs managed by the company to a public meeting with police and Wake County District Attorney Lorrin Freeman.
Freeman said at the meeting that investigators were combing through a lot of financial records and that it would take some time to determine what had happened to the homeowners associations’ money. She also said Kelly had been cooperating in the investigation.
Investigators worked with the Wake DA’s office and the State Bureau of Investigation’s financial crimes unit to gather evidence in the case. Kelly was arrested after a Wake County grand jury issued an indictment.
Jeff Swain, whose term as president of the Village of Aversboro’s HOA ended last week, said he was happy to know the case has been progressing. “We’re pleased to see the prosecution going forward. Generally we were very pleased,” Swain said.
He also praised the investigators who have been working on the case. “I think that Sept. 8 meeting was very helpful. I took note of the fact that while the Garner police department was at the front end of all this, there was clearly good cooperation between them and the State Bureau of Investigation as well,” Swain said.
Kelly was released from the Wake County Detention Center under $500,000 bond. Her next court appearance is set for Jan. 17, 2017.