Local News

Clayton woman pleads guilty, apologizes for embezzling from HOAs

Posted April 10

— The former ​owner of a homeowners association management company pleaded guilty Monday to stealing as much as $800,000 from dozens of area HOAs.

Twenty-five HOAs from across the Triangle filed complaints last year with the Garner Police Department or the Consumer Protection Division of the state Attorney General’s Office after accounts were found drained and checks started bouncing. Accounts for all of the HOAs were, at some point, maintained by Kornerstone Community Management in Garner, which Diana Ellis Kelly owned and operated.

Board members of one community Kelly managed said they discovered their $150,000 bank account had dwindled to $46.

"It's very difficult to explain to 147 homeowners who entrusted you with looking out for their interests that the money has been taken. We've been lied to," said Diane Turner with the Village of Aversboro.

"To do that to fellow people you know, and we respected her, it's disgusting in my opinion,” said Vincent Roesti, with the Rowland Meadows community.

Kelly pleaded guilty to 25 counts of embezzlement. She apologized in court, but never said why she did it.

"I just want to say how deeply sorry I am to my homeowners, vendors, family and friends," she said aloud in court.

Leah Campbell, who owns a townhome in a community Kelly managed, said the apology came too late for her and her son, who has cognitive disabilities.

"My son has grown to love this little community," she said. "We're trying to come up with the money for future repairs in order for him to stay."

Judge Donald Stephens called Kelly a thief.

"She's just a thief. She stole your money. She's just a thief," he said.

Kelly was sentenced to 10 to 14 years in prison.


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  • Wesley Wilder Apr 11, 7:09 a.m.
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    Just another reason not to live where there are HOA's that infringe on your property and the way you maintain, or use it. Personally I would never buy in a community where random property owners, many with a God complex, have the ability and the right, to dictate to me how I can and use my property. I have friends who own in developments and they are constantly complaining about their hoa's. I already pay a mortgage why pay an hoa for something I will never recoup? Makes no common sense to me.

  • Stacie Hagwood Apr 11, 6:15 a.m.
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    @Henry Cooper: I seem to recall (but my memory is suspect. :) ), that she produced fraudulent documents showing that their money was still there. She kept the bank records.

  • Chad Stinner Apr 10, 9:57 p.m.
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    There is oversight, if you actually go to the meetings. Every meeting has requirements and generally that is establishing the balance in the trust account. It takes seconds to view the balance online, and if you don't use someone who provides online visibility at this point, you are derelict in duty.

  • Dona Hill Apr 10, 9:08 p.m.
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    I believe that there should be some entity of government that acts as a mediator between the HOA board and the owners which insures that an HOA board is not overstepping their boundaries and are following their unique By-Laws and Covenants. I sometimes cannot figure out if people on the board really do not understand their responsibilities and do not have sufficient knowledge to understand the financials or there really is a covert operation to make their lives more pleasurable? At present the only option is to get an attorney and sue the management company and the HOA which is an expensive operation. I have even heard the statement from the HOA attorneys that they work for the Board. This I have also heard from the representative from the Management Company. It really takes a lot of effort with proxy votes in the mix to turn around an HOA; however, I have been involved in one successful turnaround that has given me so much faith that it can be done.

  • Henry Cooper Apr 10, 8:40 p.m.
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    This women is a crook but if your HOA board let and account get drained of 147K then they were not doing their job and should have some liability there also. These positions are not social positions in a neighborhood or an excuse for a busy body to tattle on a shed door left open. They are there to protect the interest of the members beyond being yard police. Many just don't get that.

    Do the math in your neighborhood. How many houses? Dues per house? check that back to the revenue figures on the financials all member should get a copy of.

    Quit counting on someone else to do it!!!!

  • Henry Cooper Apr 10, 8:35 p.m.
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    View quoted thread

    I had this experience with Somerset Farm in Holly Springs in the early 2000's. I requested to audit the books as a resident and paying HOA member and they refused Fought me every step of the way when I explained it was my privilege to do so as a current member. Once everything had gotten lined up the girl at the HOA mgt company quit. Finally and thankfully we we able to move from there and away from an HOA all together.

    I see ten bad stories about HOA's to every good one. It is like cell phone customer service... I guess they figure if they are all terrible we will finally give up and bend over.

  • Dona Hill Apr 10, 7:45 p.m.
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    Maybe now after this has been brought into the public eye that HOA Boards, Management Companies, and HOA Attorneys will look at things differently when a HOA member asks to review the financials and other documents of the HOA as prescribed by law. A HOA and Management Company should welcome transparency instead of treating homeowners as if they were less than privileged to review how their money is being spent. Our government has got to start helping owners with writing laws that really put teeth into holding HOA Boards and Management companies responsible for violation of the Covenants and By-Laws of their associations as well as the laws pertaining to HOA's. People should think long and hard about who they elect to their boards and management companies that they hire.

  • Kiara Babel Apr 10, 7:10 p.m.
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    Sounds like any other HOA. They are just better at it.

  • Nathan Brewer Apr 10, 6:38 p.m.
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    *for embezzling

  • Kevin O'Donnell Apr 10, 6:08 p.m.
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    If the $$ is not recovered and she "finds" it after being released, she will receive a windfall. If that is the case, crime does pay.

    I hope there is more to this story.