Police detectives took 14 file cabinets containing legal documents, 55 boxes of files and computer memory from seven machines on Aug. 11 after searching the office of the management company that 11 homeowners associations claim stole their money, documents showed.
That number of complainants has since increased to 25 homeowners associations managed by Kornerstone Community Management, a Garner-based company, which has been the target of the investigation.
No one has been arrested yet and it still may take some time, police say. The investigation is ongoing.
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“We want to make sure we conduct a thorough investigation before we consider charges,” Lt. Lori Smith said.
Detectives executed a second search warrant, in which they seized three laptop computers, a computer storage device and 10 credit cards on the same day when they searched the Clayton home, a truck, a Jeep and two cars owned by Diana Ellis Kelly, the owner of Kornerstone.
A third search warrant let police go into two units at a Garner self-storage business, but they did not seize any evidence there, the documents show.
The warrants were issued a day after police went to Kornerstone’s offices in Suite 1300 at 102 Benson Road and found the doors locked.
Police got calls from 11 homeowners associations on Aug. 9 and 10 reporting that they were missing money from their bank accounts or could not get access to accounts. Later, more than a dozen others filed reports.
The first call came from Wellington Homeowners Association, located in Angier. The president of that HOA said all its money in their PNC Bank had been removed. Kornerstone Community Management was in charge of their HOA’s finances.
The second report came from the president of the HOA at the Village at Aversboro in Garner. They, too, had their finances managed by the company before deciding to switch companies. Board members had given Kornerstone a 60-day notice that they would be canceling their contract with the company. Kornerstone sent an acknowledgment email on April 4.
However, on July 14, an invoice was created by Kornerstone Management Company for $11,687 for management fees for the next 14 months.
Another check was written to the Village at Aversboro for $55,497 from the operating account to close it out. But that check bounced.
The HOA’s president, Jeff Swain, claimed the Village at Aversboro was supposed to have more than $82,700 in their reserve account, but there was no reserve account. In total, they claim they lost nearly $150,000.
With the first two reports, there was a total of $159,979 reported stolen.
Some of the HOAs that filed reports said they did not have access to a bank account number associated with their HOA. Those that did have access to an account number were not allowed access to the account through the bank.
“Homeowner Associations would receive documents from Kornerstone advising them of their assets and liabilities but these were documents created by Kornerstone and not the financial institution,” the warrant states.
Smith said the police still are not sure of the exact total taken from the HOAs. She said of the 29 HOAs Kornerstone managed, one HOA did not report any losses, and three have not been contacted yet.