Homeowner Groups' Funds Missing in N.Va.

On Jan. 5, in a letter to the boards of the homeowner associations that used the company, Robert A. Koger said that the firm "experienced some accounting irregularities" identified by homeowner association auditors and independent auditors hired by the company. "Be patient and understand that resolving these matters takes time," he wrote.

The next day, according to court records, Koger wrote to Kenneth Ingram, an attorney for several community associations, denying suggestions of a coverup. "Rumors have circulated that Koger Management was trying to brush these claims under the rug. However, this is the furthest from the truth."

Glen Maravetz, president of the Ashburn Farm board of trustees, which represents about 4,600 homes, said his association had used Koger Management for several years and was "quite satisfied" with its service until about a year ago, when auditors discovered discrepancies.

"We thought this was just a mistake, but the deeper we dug into it, our radar was going off," Maravetz said, adding that the association recovered its money "with a little help from outside counsel."

In their complaint, state officials asked that the company be placed under a court-appointed receiver who would control the company's assets and payments while examining its records.

The Feb. 26 court order, signed by Fairfax Circuit Court Judge R. Terrence Ney, stopped somewhat short of receivership. He approved an agreement requiring the company to hire forensic accountant Jeffrey D. Barsky to investigate missing money. Barsky's work is being supervised by attorney Richard S. Mendelson, selected as a monitor by the Virginia Real Estate Board, which regulates businesses and professionals who represent others in real estate transactions.

Under the court-approved plan, Barsky and Mendelson will present a plan to the Real Estate Board, possibly as early as next week, for preventing future losses and making whole any associations that have lost money.

State officials said the Real Estate Board has begun disciplinary proceedings against Robert Koger that could result in the suspension or revocation of his real estate license.