The Newport Patch newspaper (USA) have submitted an article revealing the details of a claim being made by the former manager of a timeshare board against the board directly.
“Last year the former manager of the Newport Bay Club timeshare association (Tim Roche), was accused of embezzlement and charges were filed against him accordingly. Roche who owns three timeshares himself, was fired in March of 2013 after 25 years of employment “for appraising the full Board of improper actions by a few directors,” he said. “Rather than help me stop the actions of these directors I was fired.”
The charges have been dismissed against Roche and he is subsequently fighting to reclaim his built reputation.
“With the backing of some of the timeshare association’s 1,500 homeowners, he has filed a civil battle against the association’s board that he alleges has been violating bylaws, not paying dues, negotiating sweetheart leases for themselves and paying themselves with no-bid contracts.
As the charges have been dismissed by the Court, Roche has taken to speaking publicly about what he described as “a punishing ordeal tantamount to bullying and intimidation by a reckless board angry he exposed their wrongdoings”.
Frustrated, Roche penned a letter a few days after his termination to the association’s 1,500 timeshare owners detailing what he described as a lucrative and secret arrangement several board members had cultivated over the years for their financial benefit.
He attached a detailed letter he gave the board detailing his concerns about mismanagement and financial malfeasance.
In the letter, Roche said that board members have exempted themselves from paying annual maintenance fees, skipping out on 10 years of payments between 2003 and 2013 and made no effort to inform timeshare owners.
He also said that in 2011, commercial merchants were billed a “fairly high amount” for legal fees incurred by lawyer and timeshare owner Richard Michael Fisher. A commercial assessment resulted, he said, “In which everyone had concern. Some merchants protested and others refused to pay.”
In the following year, Roche said that Fisher billed the association more than $32,000 for unit foreclosures performed by himself.
“I thought the amount we had to pay was absurd,” Roche said, who told the board he could have gotten the work done for about $5,000 if it went out to bid.
He wasn’t alone — numerous timeshare owners were aghast to learn that the fee was so high and that the board was paying a fellow board member to do the work with no effort to solicit competitive bids.
Roche said he told the board that Fisher should not be allowed to have complete control over the expense and questioned what he perceived was a lack of management oversight.
“I explained there was no management oversight on cost if the board was hiring the attorney and further that using a fellow director as the attorney made it hard on management to control the spending of his boss,” Roche wrote.
According to court documents, Fisher allegedly did not provide invoices for legal work and “would periodically instruct the Association’s Assistant Manager to write a check to his firm in whatever amount Mr. Fisher requested.”
Ironically, one of the jobs Fisher collected money for was for his firm, Macioci & Fisher, to collect past-due maintenance fees from unit owners that he exempted himself from paying in violation of the association’s bylaws, according to the counterclaim.
Roche said Fisher’s use of the association as a cash box started to unravel when he investigated the association’s high legal fees and resulting disappointing financial results for the association in 2012.
Roche was under pressure to identify cost savings leading up to the March 2013 board meeting, according to his counterclaim, and could not find invoices and accounting statements to justify the legal fees collected by Fisher. He then got quotes for similar work from other lawyers and found that the foreclosure work could be done for thousands less.
He also discovered that the board’s practice of immediately launching foreclosures without pursuing collections of delinquent timeshare accounts was racking up fees. Roche said “he could greatly reduce the frequency of foreclosures, slow the dwindling individual owner base, and maintain maintenance fee revenue for the Association over the long term.”
Roche also raised concerns about the lease for the former Rhino Bar, which was owned by board member James Holmes. Roche said that the lease was given to Holmes without any competition and despite repeated noise issues and complaints from homeowners about the nature of the business — a bar — the issues were never rectified.
In fact, Roche alleges, the board opted to award a lease renewal and expansion into a patio area, which Roche feared would increase noise problems and lead to more complaints.
Not only that, the lease proposed to be awarded to Holmes “did not mandate payment of any base rent, only rent in the form of percentage of sales, which would be hard to verify and not financially advantageous to the association.”
Roche said he was fired for raising these issues and the embezzlement charges were drummed up to punish him for alerting timeshare owners, who responded loudly and angrily about what Roche said the board had been doing with their money”.
Roche alleges that board members misled police into believing that Roche had written himself checks totalling $527,000 drawn on funds belonging to the association between 2008 and 2013.
Roche’s Lawyer, Stephen A. Rodio, refuted those allegations in an Oct. 28 2013 letter to Prentiss in response to the board mailing a letter to homeowners accusing Roche of stealing the funds.
Rodio said those funds were his salary and overtime benefits approved in a written agreement signed by the board president.
“It was only after the Mr. Roche went public with the information that individual board members have been awarded well over a million dollars of club funds without competitive bidding that the board made the accusation that Mr. Roche was ‘stealing’ his compensation,” Rodio wrote.
Some timeshare owners have been calling for the immediate resignation of sitting board members and reportedly have registered complaints to the state police and attorney general’s office. They also are listed as benefactors in Roche’s suit, which means they would get restitution if he prevails in Newport Superior Court.
“Ownership in the Bay Club is something I take very seriously,” said Kathleen Upchurch, a timeshare owner in a 2013 email to the board. “Not only for the pleasure I derive from my annual stay there, but also because I treasure its unique historical value and importance to the Newport community. It is imperative that this heritage be protected and preserved.”
Other residents are demanding the board pay the more than $40,000 in fees they did not pay themselves as well as late fees.
The suit and countersuit are expected to appear on the court calendar in the coming weeks.
For Roche, vindication isn’t what he’s after. And it’s not just about the money, either. He said he and others have been bullied by a corrupt board.
“I hope to put a stop to it, if possible,” he said.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk