Manzoor Khan—filling his pockets
It is very important to focus on the multiple ways that
Manzoor Khan and Channel Property Management stole money from the condo
corporations that he managed.
This is far more important than the $20 million loan bylaw scandal
because the $20 million scam was a once-ever con while Manzoor's
day-by-day stealing is far more common in condominiums than is
generally realized and is done by many property management companies,
individual managers and directors.
The majority of them have not been caught and when they have been,
criminal charges are rarely laid.
Manzoor's commitment
Manzoor
claimed that when he bid on contracts, he charged his actual expenses
plus 5% for his profit. Only 5%? That in itself should have set off
alarm
bells.
There are management companies that will bid unrealistic low
fees in order to win the contract as they plan to make their profits by
other means. Channel almost always came in with the lowest-cost bid.
Filling his
pockets
Here
are some of the ways that Khan made money and these scams are used by
other property management companies, directors and individual managers.
Energy re-sellers
Some of these companies offer commissions and fees for steering
business their way. These commissions/fees are not disclosed to the
condo corporation.
The price for the natural gas may be fixed but service and
administration costs are not fixed costs.
Smart meters
The board buys into smart meters because downloading the cost of
electricity onto the individual owners is the equivalent of a hike in
common element fees.
The owners are told that they will save money as they will not help pay
for the owners who are electrical hogs.
Smart meters has little to do with conservation and a more to do
with undisclosed commissions to whoever arranges the contract and there
are long term costs to the individual condo owners.
They will also find that their new electrical supplier is very quick to
levy fines for late payments and in turning off their power.
If a unit gets its electricity cut-off, you may see an electrical cord
running from a hallway receptacle into the affected unit
Kickbacks from
contractors
This is the most common scam in the industry. The bids are all close in
price but one company, the one that management recommends, is always
lower.
How real were the other bids? The directors and owners never check.
The kickbacks may not just be from the building trades but also from
the cleaning, garbage disposal and landscaping companies.
Overcharge for
supplies
Overcharging for materials and supplies was one of Khan's tricks. He
billed one condo double his actual cost for the ceramic tiles he bought.
Failing to
declare discounts
Suppliers give contractors discounts when they buy materials. The
contractor is given a receipt to show the customer but the contractor's
20% rebate is given to the contractor on a separate credit for future
purchases. That credit, the customer does not see.
In-house
suppliers
Khan owned dummy companies that would bid and win work from the condos
he managed. These dummy companies would then contract out the work to
legitimate companies who would do the job at far lower costs than what
Khan charged the condo corporation.
Paying for work
not done
Very
few directors have a clue about the mechanical systems so the
contractors can replace failing equipment with used replacements and
the
contractors can claim to have replaced parts when they just cleaned
the dirt and dust off of the existing ones.
Khan would submit invoices and the cheques would be signed.
Inferior
materials
The condo pays for quality supplies and materials but the purchased
goods wear out prematurely.
Negotiating loans
There are commissions available here too. Sometimes the broker will
offer the contact person a set amount and sometimes there is a 50/50
split on any savings. The broker and the person arranging the
loan split "their" share of the savings.
Then there is the additional kickbacks from the contractors who are
awarded the contracts that the loans made possible.
Manzoor was a self-styled expert in arranging condo loans; of that
there is
little doubt.
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