Real Estate News

Property Administrators closure: Where's the money?

A note announcing the office is closed is taped across the mail slot at the Property Administrators Inc. office in Shelter Cove on March 27, 2015. The regime management company shut down without warning earlier in the week.
A note announcing the office is closed is taped across the mail slot at the Property Administrators Inc. office in Shelter Cove on March 27, 2015. The regime management company shut down without warning earlier in the week. Staff photo

At least $1.2 million is missing from three former clients of Hilton Head Island's now-shuttered Property Administrators Inc.

That figure is up from less than $100,000 just four weeks ago. Community leaders fear the number is likely to grow as more former clients of the property management company regain control of and properly audit all of their financial records.

More questions than answers in Property Administrators Inc. scandal

What we know

The FBI is investigating: FBI agents seized paper records, computers and more as part of a federal investigation that began just days after Property Administrators Inc.'s abrupt closing last month. The company oversaw property for 21 Hilton Head Island communities. The investigation was launched after leaders at Centre Court villas claimed Property Administrators took at least $94,000 and possibly as much as $132,000 from its accounts without authorization.

Company owner is still here: Don Christy, Property Administrator's owner, has been ordered not to leave Hilton Head Island, according to his attorney.

Communities sign new managers: Nearly all of the 21 communities left hamstrung by the company's closure have signed on with new property management companies and have access to their operating accounts. But they don't have access to larger accounts -- similar to savings accounts -- that were managed by Property Administrators and used to pay for pricey repairs and improvement projects.

What we don't know

Why? Neither Christy nor his attorney have offered any explanation for why he abruptly closed his company.

Is anyone else missing money? Until federal investigators turn over all financial data to the former clients, regime leaders and their attorneys say it is impossible to determine if all of their money is accounted for.

Will criminal charges be filed? Investigators have refused to comment on the probe or even confirm its existence.

What's next?

Ball in FBI's court: The FBI forensics team will finish its examination of Property Administrators records at some point. Only then can investigators present a report to the U.S. Attorney's office, which would then decide how to proceed legally, if at all.

Insurance should cover any losses: If money is missing, regime leaders say their boards' insurance policies should cover the loss. Claims must be filed within the next three months.

Civil lawsuits possible

Only after scouring financial records and insurance company responses to any submitted claims can the regimes and owners associations consider lawsuits against Christy or his company.

Some say it's a scandal that's been brewing for years. Former clients have begun stepping forward to say Property Administrators Inc. and its owner, Don Christy of Hilton Head Island, have quietly been showing signs of troubled accounting and reporting practices for a decade.

Federal investigators are on the case, working to locate the banks accounts that the company set up for its clients, determine how much money is in each account and whether any has been stolen. The FBI has seized the company's computers and financial records to help with the process.

More than 20 island regimes and property owners' associations, whose members trusted Property Administrators Inc. to make sure the grass was cut, the pools cleaned and that other maintenance work was performed at their properties, have been locked out of their financial histories since the company closed suddenly and without explanation last month.

Christy has been ordered not to leave the island, say attorneys involved with the case. While he has not been charged with a crime, a court order has turned over control of his company's mid-island office and archives to his largest competitor, IMC Resort Services.

Publicly, Christy has only addressed the situation in a statement issued through his attorney earlier this month to say Christy is cooperating with federal investigators.


At least $1.2 million is believed to be missing from Centre Court villas, St. Andrews Commons and Inverness Village condominium communities in Palmetto Dunes Oceanfront Resort, according to regime leaders.

Comparing available bank statements to the monthly financial reports prepared for the regimes by Property Administrators staff, leaders at Centre Court villas say it now appears the company took at least $94,000 and possibly as much as $132,000 from its accounts without the regime's authorization.

Centre Court leaders were the first to claim money had been taken from their accounts in the immediate aftermath of Property Administrators' closing last month. After discovering line items that indicated the company had made unauthorized withdrawals, regime president and New Jersey attorney Vince Marino confronted Christy about the missing money just days before the company closed.

Marino now believes it was Centre Court's suspicion about their accounts that ultimately led to the company's surprise end -- suspicions shared by many of the regime leaders left hanging now.

At St. Andrews Commons and Inverness, regime leaders say they cannot even locate all of the accounts Property Administrators kept for them, let alone know for certain if any of those funds were taken by the company.

Both communities have regained access to their operating funds, kept with all of the clients' now-returned operating accounts at Mutual of Omaha, but have not recovered their capital project and reserve bank accounts -- large savings set aside for expensive renovations and upgrades.

Those accounts could be spread throughout any number of local or regional banks that the regimes were never provided account numbers for, said board presidents Ray Pfeiffer, of Inverness, and Roger Jones, of St. Andrews Commons, during a court hearing on the matter earlier this month.

"We don't know where are our money is -- nobody knows their bank account numbers and nobody knows where the money is," Jones said after the hearing. "Our financial statement might say X-number of dollars, and that 'x' might be in our bank account, exactly to the penny. But you can't find the account."

Pfeiffer and Jones have declined to specify how much money each group had in those accounts, but did say it was "substantially more" than the funds allegedly taken from Centre Court. One regime leader suggested the total amount missing could end up between $200,000 to $400,000 at Inverness. A letter to St. Andrews Commons owners two weeks ago suggests the community's capital savings alone account contained nearly $900,000, almost $600,000 of which had been set aside for planned improvement projects this year.

"I'd like to be able to say to you we lost 'x' and we're going to pursue it, but at this point it's a real toss-up," Pfeiffer said.

Shorewood condominiums on South Forest Beach Drive, pictured March 27, 2015, is one of the complexes affected by the sudden closure of Property Administrators Inc. (Jay Karr/Staff photo)

Affected properties

Twenty-one condo, apartment and community regimes are affected by Property Administrators' abrupt closure, according to McNair Law Firm attorney Bob Deeb, who is representing six of the regimes.

In Leamington

  • Barrington Arms
  • Barrington Court
  • Barrington Park
  • Huntington Villas

In Palmetto Dunes Oceanfront Resort

  • Centre Court
  • Hickory Cove
  • Inverness
  • Palmetto Beach Villas
  • Turnberry

In Port Royal Plantation

  • Crown Reef

In Sea Pines

  • Lighthouse Road Villas 1
  • Lighthouse Road Villas 2

In Shelter Cove

  • Watersedge

In South Forest Beach

  • Shorewood I
  • Shorewood II
  • Shorewood III
  • Shorewood IV
  • Shorewood Commons

In Windmill Harbor

  • Spindle Lane

Spanish Wells

Five weeks after the closing left the regimes locked out of their accounts, it is still not clear if any other communities are missing any money, leaders told The Island Packet this month. Some leaders hesitate to even discuss the possibility until they can regain control of all of their accounting data, which is still in the custody of an FBI forensics team.

That team swooped into Property Administrators' Shelter Cove Towne Centre office on Feb. 26, just three days after the company closed, according to court records. Agents took two dozen boxes of paper records, at least seven or eight computers, and discs and flash drives to examine, according to regime leaders, IMC Resort Services officials and attorneys involved with the case.

The FBI and U.S. Attorney General's offices in Columbia have refused to comment on the investigation or even confirm its existence.

However, the FBI agents have told IMC Resort Services and the attorneys representing the regimes and Christy that the FBI will need at least one more week to pour over the records to determine if any criminal charges should be pursued, say IMC staff and the attorneys.

Only then will IMC Resort Services and all of the regimes have full access to all of the communities' financial data and be able to locate every account, according to IMC president Ron Fenstermaker and Bluffton attorney Dean Haskell, who is representing the regimes with state Rep. Weston Newton, R-Beaufort.

Full account audits will follow, which will reveal what -- if any -- funds are gone, regime leaders have said.

Insurance polices held by each community should cover any losses, but claims can't be made until the financial data is available to pass along to insurance companies and that clock is ticking, leaders and attorneys said.

Policy rules give the community's only about 150 more days to file such claims, they added.


In the aftermath of Property Administrators' abrupt closure, whistleblowers living in communities previously managed by the company are shedding new light on what they say is a history of troubled accounting and reporting practices.

Last year, three former clients terminated their contracts with the company over concerns about financial record keeping.

Now leaders from the Wendover Dunes condominiums in Palmetto Dunes are suing the company, claiming it has not been forthright about how it handled the community's finances.

In a lawsuit filed earlier this month, the community claims Property Administrators' staff never provided the Wendover Dunes board of directors with financial reports for the six months the board contracted with the company -- from June to December last year.

Troubled by the lack of those reports, the board terminated its contract with the company on Dec. 1. It has since contracted with Associated Services Inc., according to court documents.

However, neither the board nor Associated Services has received any of those financial reports. Those records are tied up in the ongoing FBI investigation of the company's computer system.

Last summer, Westbury Park Residential Association in Bluffton also split with the company after several years of battles seeking proper financial records, according to homeowner Michelle Mancini.

Mancini served on the neighborhood's board of directors for almost a year, including the first three months as treasurer — a position she relinquished amid Property Administrators' unwillingness to provide her specific financial documents. She would stay on the board for another eight months before resigning in August after further frustrations with what she perceived as the community developer's influence on the association.

Mancini, who also had previously served on the association's finance committee, pushed the neighborhood to drop Property Administrators for what she called shoddy accounting practices that she outlined in a late 2013 document.

Some of the problems included the company's improper use of credit cards for Westbury Park purchases, failure to account for certain fee collections, slow or no responses to the board's records requests and regularly contracting with companies that had no recorded business licenses, Mancini wrote.

In at least one instance, the finance committee found Property Administrators had used Westbury Park funds to pay the bill of another development it managed, Mancini's document claims.

After several unsuccessful attempts to replace Property Administrators in 2012 and 2013, Mancini and the Westbury Park board ended their contract with Property Administrators last summer. The community now contracts with Coastal Community Association Management.

At the same time Mancini's fight was underway in Bluffton, another whistleblower waged a similar battle for proper financial records at The Preserve at Indigo Run, then managed by Property Administrators.

In late 2013, accountant and owner Lee Norbeck uncovered items in the company's financial statements prepared for the community's board of directors that suggested the company had misappropriated more than $66,000 over three years, Norbeck said.

That money included more than $6,500 for an erroneous payment for parking lot repairs at another community and nearly $61,000 in "prepaid management fees," company owner Christy explained in a January 2014 letter to Norbeck about the errors. Those funds were paid back, Christy added.

"We regret these incidents occurred," Christy wrote. "The money has been repaid and it will not happen again. In fact, we intend to transfer this account to a senior book keeper to get a fresh start. We expect this will help insure nothing like this re-occurs."

Just four months later, in May 2014, The Preserve also split with the company, Norbeck said. The community now contracts with IMC Resort Services, according to Preserve documents.

"Whether there was an accounting error or a cash misappropriation, there was a problem (at The Preserve)," Norbeck said. "When I read about (Property Administrators) shutting down in the paper, I knew these weren't just accounting problems ... .Somebody had to know."

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