More than $11 million were diverted from the Hammocks homeowners associations, more than five times the amount prosecutors originally tracked as misappropriated funds when they filed charges almost four years ago, authorities revealed.
The money was taken from about 18,000 residents who live in the Hammocks and pay assessments to the HOA, which is South Florida’s largest association and the second biggest in the state.
The newly revealed depth of the theft was announced on Thursday shortly after the ringleader of the scheme, former board President Marglli Gallego, and her husband, Jose Antonio Gonzalez, pleaded guilty to charges for their role in the fraud.
“The now-convicted thieves ran the Hammocks HOA like an organized crime syndicate only to benefit themselves, their family and their friends,” Miami-Dade State Attorney Katherine Fernandez Rundle said at a news conference held shortly after the guilty pleas. “Their victims were each of the homeowners.”
Prosecutors first charged the couple, as well as three other ex-board members, in late 2022, and in subsequent years charged three more people, two of whom are Gallego relatives, for their roles in the scheme.
Gallego, who served as Hammocks president from 2017-21, pleaded guilty to a count of racketeering and a count of grand theft. She was sentenced to seven years in prison, which the state attorney said is the longest prison sentence for a board president.
Gallego, the only defendant in the Hammocks case who was denied bond, has been in jail for nearly four years awaiting trial as she previously maintained her innocence. She will receive credit for time served.
Gonzalez, who also previously maintained his innocence, pleaded guilty to one count of money laundering and was sentenced to seven years of probation.
The full scale of the fraud was unclear at first, with prosecutors originally outlining nearly $2 million as misappropriated in a 2022 arrest affidavit. At the time, it was difficult to pinpoint the breadth of the scheme because the Gallego-led board stood in the way of investigators trying to obtain HOA records, including defying court orders to produce the documents, Fernandez Rundle said. Gallego also sued the Miami-Dade County police officers assigned to investigate and monitor the HOA.
“She never wanted us to have access to those records,” Fernandez Rundle said.
After the 2022 charges, court-appointed Hammocks receiver David Gersten stepped into the shoes of the HOA and was able to access the clubhouse and off-site locations where paper records were stored.
The clubhouse had a hatch in the floor where documents were stored. Fernandez Rundle showed a video of one of the off-site facilities, labeled as a “spa” on the storefront, where seemingly thousands more papers were kept.
These records, though vast, only revealed part of the money flow, with bank records also helping fill in the holes.
Forensic accountants hired under the receivership case did a complete rebuild of the bank records in order to determine who was paid what, according to Melanie Damian, an attorney part of the receiver’s team.
Prosecutors originally outlined a scheme in which former board members hired fake vendors that did little to no work at the Hammocks and then the HOA’s payments to these vendors were diverted, including to Gallego and Gonzalez.
While that was one of the ways funds were misappropriated, there were two other mechanics the forensic accounting revealed: Hammocks employees were on the payroll but did no work for the HOA, and some vendors were “partially legitimate” because they did some work at the Hammocks but were then overpaid in order to give kickbacks to Gallego and others, Damian said.
In some instances, the bogus vendors were run by family or friends of former board members.
Gallego, who was first elected to the board in 2015, in some ways “targeted” the Hammocks by purchasing a 1 percent share in a condominium at the HOA in order to qualify to run for the board, Fernandez Rundle said.
The Hammocks essentially became a “cash cow in her [Gallego’s] diabolical scheme,” Fernandez Rundle said.
Aside from her prison sentence, she is to serve seven years of probation and is banned from stepping foot at the Hammocks and from working in any HOA in the U.S. Gonzalez, who allegedly led some of the fake vendors, also tendered a $50,000 check and a 5-acre south Miami-Dade property to the HAO as restitution. The property was purchased with funds misappropriated from the Hammocks, Fernandez Rundle said.
Two of the four other board members originally charged, Myriam Rodgers and Monica Ghilardi, switched their pleas to guilty in 2024 and have cooperated with the investigation. A case is pending against the fourth former board member, Yoleidis Lopez Garcia, and three others charged in more recent years, all of whom have pleaded not guilty.