HOA at Ocean Towers in Santa Monica stole $5.7M, prosecutors say

LA County grand jury hands down 119-count indictment against four board executives 

HOA at Ocean Towers in Santa Monica stole $5.7M from residents, AG says
201 Ocean Boulevard (Google Maps, Getty)

Views from the 19-story twin Ocean Towers above the beach in Santa Monica are stellar. But a look into management at the 317-unit luxury co-op is as dark as a Hollywood film noir.

A decade-long saga of alleged fraud and manipulation has unfolded at the Ocean Towers condo complex at 201 Ocean Boulevard, the Los Angeles Times reported in a 4,300-word expose.

A web of deceit involves former figures within its homeowners association, including John Spahi, his son Omar, former HOA President Joseph Orlando, and his late wife, Dorothy.

Residents of Ocean Towers, built in 1971, had long harbored suspicions about John Spahi’s abuse of power within the HOA board. 

Allegations included manipulating board elections, draining HOA accounts for personal legal battles and orchestrating inside deals with valuable real estate. 

The scale of the alleged grift came to light when a grand jury indicted the Spahis and Orlandos on 119 charges, including grand theft, identity theft and money laundering, totaling $5.7 million in stolen funds, according to Los Angeles County prosecutors and the state Attorney General’s office.

The fraud allegedly involved billing the HOA for construction projects that were never completed by a company named Progressive, in the name of an unwitting owner.

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Lawsuits and investigations revealed a complex scheme of financial maneuvering, including transferring units among relatives and partners and taking out massive loans without homeowner approval.

Ocean Towers residents faced intimidation tactics, lawsuits and eviction threats when challenging the Spahis and Orlandos. 

Despite initial resistance, some residents, led by Michael Reach and attorney Jeffrey Wittenberg, took legal action against the entrenched board. Eventually, a court-appointed receiver ousted the old guard, revealing the dire financial straits of Ocean Towers and the extent of the alleged embezzlement.

As the legal battles continue, the residents looks toward recovery under new management. 

However, the repercussions of the fraud may linger, with residents burdened by high HOA fees and debt incurred during the Spahi era. 

Meanwhile, John Spahi awaits trial at an unscheduled date, while facing scrutiny from residents who question how he has evaded accountability for years of alleged misconduct.

— Dana Bartholomew

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