Palo Alto Weekly

News - March 25, 2011

Manager embezzles $70K from neighborhood group

Former Greenmeadow Community Association administrative manager admits and apologizes for crime

by Gennady Sheyner and Sue Dremann

The former administrative manager of the Greenmeadow Community Association in south Palo Alto has admitted to embezzling as much as $70,000 from the neighborhood association.

Kimball Allen, who was hired by the association in 2008, sent the association an apology letter through the Palo Alto police department on March 17 for the theft, which took place throughout 2010, according to association President Sean Giffen.

Details of Allen's expenditures on the association's credit card emerged at a March 22 community meeting regarding the theft. The charges included a $5,000 air-conditioning system for a rental home he owns in Kansas City, Mo.; a hair-replacement surgery; membership to a high-end fitness club; trips; and paying off his credit cards, Giffen said Wednesday (March 23).

In his letter to the association, Allen acknowledged, "The crimes that I have committed are pathetic and hurtful" and asked members to keep an "open mind."

"I got caught up in a vicious cycle of greed, selfishness and deceit," Allen wrote in the letter, which was obtained by the Weekly. "My actions cannot be justified and the worst punishment is my own guilt."

Allen resigned his position on Dec. 30, 2010, to start a new gym, but he stayed on through January 2011 to train his replacement, Donna Rhoan. It was she who quickly discovered that something was amiss.

Rhoan told the Weekly that Allen held on to his administrative access until Jan. 31, his final day at the association, and spent much of that day cleaning up the data on the association's computer.

She said Allen told her just before leaving that he had ordered checks and equipment. When the items didn't arrive, Rhoan said she e-mailed Allen on Feb. 3 to ask about them. He responded about a week later with a brief e-mail that she described as "snappy" and that didn't provide the information she was seeking.

In another case, Rhoan said she asked Allen about two payments that he signed off on to a new bank. Allen said he made an error.

Rhoan said she also noticed that many of his reported expenses were based on estimates rather than invoices. This included estimates for fitness equipment and for a sand-filtration system meant for a giant swimming pool.

Another red flag was raised when the association received a letter from a bank acknowledging the association's change of address for mailed statements. The fact that the association never requested an address change made her suspicious, Rhoan said.

Rhoan said she alerted the association's board of directors about the financial irregularities just after she noticed them. Association officials initially thought the damage was limited to $5,000 or $7,500, she said, but they soon found other examples of inaccurate accounting.

"Once we found one error, we began looking through everything," Rhoan said.

In 2009, the association's credit card spending totaled about $20,000, but in 2010, that sum ballooned to $90,000, Giffen said.

The discovery began with "a few items of a questionable nature," including a $500 charge to Walgreens, he said.

"There were no records or details of the credit-card bills. Once we were able to get the credit-card statements, the majority of the expenditures were of a personal nature, and we contacted the police," he said.

Allen voluntarily came to the police department for questioning, but he was not arrested, Giffen said. The association provided police with "an enormous amount of detail" regarding the embezzlement, he said. No charges have yet been filed.

Residents expressed shock and disappointment regarding the theft, but most were supportive of the association's efforts, he said.

"We are all sad and disappointed about this turn of events, but Greenmeadow has always pulled together to solve problems. I have no doubt we'll get through this just fine," Penny Ellson said.

"There was a consensus that he is responsible and shouldn't walk away from this. We're looking at options to recoup the money. We hope to recover the loss. We'll see what the District Attorney has to say about potential restitution," Giffen said. It is also possible that restitution could be made through the credit-card company, he said.

Giffen said he attempted to contact Allen a number of times and was never successful.

"His behavior after leaving Greenmeadow indicated that he had almost no concept that he had done anything wrong," he said.

Allen expressed remorse in his letter to the association and pledged to take "full responsibility."

"Words cannot express to you how remorseful I am," he wrote. "I plan on taking the appropriate legal and emotional steps in resolving the damage that I have done."

Meanwhile, the association's finance committee is looking at available technology to provide transparency in bookkeeping. Other members at Tuesday's meeting offered ideas on policy and practices that could help prevent future thefts, Giffen said.

"The community really came together. ... It's moments like this that define a community. Does it tear you apart or bring you together?" Giffen said.

Staff Writers Gennady Sheyner and Sue Dremann can be e-mailed at gsheyner@paweekly.com and sdremann@paweekly.com.

Comments

Posted by Hulkamania, a resident of Duveneck/St. Francis
on Mar 21, 2011 at 6:14 pm

Another great example of why two signatures are required on any check over $400.


Posted by Member, a resident of Greenmeadow
on Mar 21, 2011 at 7:27 pm

I think that use of the new Greenmeadow Administrative Manager as a source for the article is poor reporting, and puts the new manager is an awkward position of having to answer to the wrong doings of her predesessor. If your article is to report about a crime, the Greenmeadow Community Board presisent has already announced that to its members. It seems like you are creating a circus exhibit here.


Posted by Oh Please, a resident of Another Palo Alto neighborhood
on Mar 21, 2011 at 8:00 pm

Sociopathic behavior like this needs to be brought to light. Thank you for reporting it. [Portion removed by Palo Alto Online staff.]


Posted by who is he, a resident of Adobe-Meadows
on Mar 22, 2011 at 8:37 am

How about a photo of the perp?


Posted by kellyxf, a resident of University South
on Mar 22, 2011 at 11:28 am

"ACRO Gymnastics Academy", the name alone sounds like a perfect setup for his new scam, a new gym with an old world name such as "Academy".
Personally I don't believe he should be aloud to have a business dealing with an unsuspecting public ever!!

Person note: "Gwp-ch", a major rudeness peeve, calling out that "typo", that is something you should private message directly to the writer, did you spend the hours on research and investigation on this article?? Apologize in a private message maybe?? "Gwp-ch"


Posted by Steve C, a resident of Menlo Park
on Mar 22, 2011 at 12:42 pm

This happens more often than people realize, especially in businesses and organizations where the bookkeeper or business manager has sole control over the books. I have a close friend whose design/build business was ruined by a crooked manager. My friend was very good and too busy doing what he did best, designing and building. That's why he hired a manger to handle the other stuff. Once these crooks realize they can get away with the small stuff, they can't resist going after the big money.
Part of how this was done was by pulling checks out of the back of the check book, out of sequence, then fudging the books to look like legitimate bills were being paid. It only came to light when the crook resigned and his wife had to take over the books at tax time. They were always running low on funds in spite of a booming business, and couldn't figure out why. Because he had a solid reputation and track record, this went on for some time. But once one creditor called in an account that had not been paid, like dominoes, all suppliers jumped on the bandwagon, and my friend could no longer operate. It put him out of business, and even though they got some of the funds back, there was not enough to cover the losses. Twenty or more skilled workers lost their jobs, a high-end cabinet shop had to be sold. It's tragic. This was a well known builder in Maine. The homes he designed and built are second to none, each unique. He now works for his former primary competitor.
This creep manager was paying his mortgage, renting cars for his wife, you name it. He died not too long after he was charged. Left a trail of wreck and ruin.
NEVER trust anyone to manage your financial affairs, without another qualified person reviewing the books, and the accounts that are supposedly being paid.


Posted by Jason, a resident of Barron Park
on Mar 22, 2011 at 1:18 pm

Greenmeadow is a horribly managed community. The fact that this could go on for so long without anyone noticing is ridiculous. [Portion removed by Palo Alto Online staff.]


Posted by Resident, a resident of Greenmeadow
on Mar 22, 2011 at 1:31 pm

Kimall had most of the residents in Greenmeadow thinking that he was doing an exemplary job. He was charming, friendly, intelligent, and supposedly hard-working. Little did we know that he was embezzling from the community. Obviously, there is some work that needs to be done to make sure this never happens again. I know that the residents of Greenmeadow will pull together, make the necessary changes that need to be made, and move on.


Posted by GM Associate Member, a resident of Greenmeadow
on Mar 22, 2011 at 1:36 pm

To Jason,

You comment is not appropriate. The borad and presidency rotate and our current president just started recently (one or two months) and was one of those that found it. Kimball had been working since Aug. 2008 under several presidents and boards. He apparently only started stealing in the past 9 - 12 months. As Steve C. said it started small. The bulk only happened recently.

GM Associate Member.


Posted by Palo Alto native, a resident of Charleston Meadows
on Mar 22, 2011 at 2:43 pm

This behavior is unacceptable and it's unfortunate that this happened.


Posted by Derrick, a resident of Evergreen Park
on Mar 22, 2011 at 3:54 pm

Wasn't this guy ever audited? This neighborhood assn. must have gobs of money to be missing that much and no one ever noticed until he left.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Mar 22, 2011 at 4:24 pm

How did he stockpile the money? Why were people paying him? Our neighborhood has an annual party and asks for money to participate and I've noticed that the kitty has depleted considerable from thousands to hundreds in a short time. This should be a warning to neighborhoods to not engage. Neighborhood parties should be potluck.


Posted by Larry the cable guy, a resident of Esther Clark Park
on Mar 22, 2011 at 6:36 pm

"Manager steals $70K from neighborhood group" ? Really? No trial. Not even an arrest. But the Weakly says he's guilty based on emails. Wow! We don't need a legal system with judges, lawyers, juries and all of that stuff when the Weakly can declare who is guilty or innocent.


Posted by come on Larry, a resident of College Terrace
on Mar 22, 2011 at 7:02 pm

The guy confessed to embezzlement. He deserves to be treated like he is telling the truth.


Posted by changeup, a resident of Another Palo Alto neighborhood
on Mar 22, 2011 at 9:50 pm

Many good points which I hope the GMCA and other community organizations learn from; they must be set up like business' with Employee Handbook and Job Descriptions. Two signatures at the minimum by the President and VP of the Board; plus another Board Member to reconcile the Transaction Journal and Bank Statements monthly.

As far as the embezzler; his actions should be investigated while he is under a court ordered arrest, just like anyone else would be, except for the Bankers, Investment Company Execs on the East Coast and the crooks in Corporations, Insurance and Real Estate who created the world's financial disaster of 2008. It doesn't matter if he wrote a "nice" email trying to exonerate himself. Who is he kidding? The least he could do is return all the equipment he bought, sell what he can't return; give the proceeds to the GMCA and then wear an ankle bracelet with a tagging system, get a job and pay back the GMCA every single dime plus 7% interest for as long as it takes. Sounds far to me; otherwise he is put into jail where we have to pay for his time and the GMCA gets nothing!


Posted by will the punishment fit the crime?, a resident of Palo Verde
on Mar 22, 2011 at 11:00 pm

While he may well be sorry and has written that "the worst punishment is my own guilt", what he is admitting to is a serious crime and was a pattern, not an impulsive, one-time act.

I cannot help but think that whatever his sentence, it will be easier than that for an inner city kid caught stealing a $70k car.

Hey, white collar crime seems to work for Wall Street!


Posted by Stunned, a resident of Greenmeadow
on Mar 23, 2011 at 8:45 am

A previous poster described Mr. Allen's behavior as sociopathic, and after last night's Greenmeadow neighborhood briefing, I have to agree. As if the numerous counts of felony embezzlement weren't enough, he weaseled his way into many people's lives and homes, tossing off lie after lie – making it clear that he has zero regard (possibly even contempt) for those around him. [Portion removed by Palo Alto Online staff.]


Posted by bea, a resident of Leland Manor/Garland Drive
on Mar 23, 2011 at 11:15 am

[Post removed by Palo Alto Online staff.]


Posted by Barron Parker, a resident of Barron Park
on Mar 23, 2011 at 11:46 am

A long-term pattern of embezzlement, carefully structured to avoid detection, is typical of psychopaths.

They are usually charming, friendly, verbally clever, masters at lying, manipulative, and they invariably leave a trail of ruin and pain behind them.

[Portion removed by Palo Alto Online staff.]


Posted by member, a resident of Greenmeadow
on Mar 23, 2011 at 5:15 pm

[Post removed by Palo Alto Online staff.]


Posted by Resident, a resident of Greenmeadow
on Mar 23, 2011 at 6:26 pm

Dear Member, Kimball's actions speak loudly and clearly. They are not the actions of someone who genuinely cares about the members of this community. On the contrary, his actions have blind-sided and hurt many community members. While the financial hurt is there, the deeper wound is the fact that this community trusted and valued him as an employee, and as a friend. Greenmeadow is an amazing place, and we will get through this as we work together and move forward.


Posted by Anonymous, a resident of Another Palo Alto neighborhood
on Mar 23, 2011 at 10:15 pm

With such a weak accounting system and the lack of audits, the Greenmeadow Community Association got the administrator they deserved. Hopefully, the board will insist on better accountability and safeguards.


Posted by Inside Job, a resident of Crescent Park
on Mar 24, 2011 at 10:28 am

Financial work in the US these days seems like a license to steal. I doubt he will get a "long enough" jail sentence or learn from the experience. He'll just get "promoted" into something bigger.

How is it that we produce so many dishonest people lacking any care of bond to their communities?


Posted by Palo Parent, a resident of Greenmeadow
on Mar 24, 2011 at 10:32 am

It is important to note that in part, due to websites like this one, he's pretty much screwed if future employers ever Google his name before hiring him.


Posted by Observer, a resident of South of Midtown
on Mar 24, 2011 at 1:13 pm

Anonymous, No, the Community Association does not deserve this. Green Meadow is run by volunteers, who work very hard to make it the wonderful organization it is. Yes, this has uncovered a weakness in the accounting practice, which is being addressed. What would be tragic would be for the community to become less open and welcoming, and for the members to be reduced to blaming, name calling, finger pointing - well, your post is a good example.


Posted by Resident, a resident of Greenmeadow
on Mar 24, 2011 at 3:43 pm

Thank you Observer! Your post is much appreciated!


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