How the Hammocks Hosted the Biggest Known HOA Fraud

Marglli Gallego was supposed to be a savior for South Florida’s largest homeowners association.

She rode to power at the Hammocks, first elected to the board of directors as treasurer in 2015 and then rising to president in 2017. Some homeowners say at first, they saw her as their way out from previous HOA leadership they disliked, setting a hopeful tone for better days for the Hammocks.

The nightmare scenario that ensued brought the West Kendall community to its knees, costing residents millions and resulting in years behind bars for the grifter who fleeced them.

Gallego was the ringleader of the scheme that siphoned $11 million from HOA coffers, diverting funds to herself and her husband, Jose Antonio Gonzalez, along with other family members and associates, prosecutors said.

The Gallego-led board of directors bullied homeowners who spoke out or signed the recall petition seeking to oust the board, residents said.

Retaliatory tactics included having an accomplice park a truck outside of homes and hitting the owners with unjust allegations of overdue assessments and bogus fines, homeowners said. Some, facing what they said were unjust fines over alleged HOA rules violations — over the color of their driveway or unpruned trees — sold their homes and moved.

The scheme wasn’t just a crime of opportunity, prosecutors said.

Gallego “targeted” the Hammocks, buying a 1 percent stake in a condo unit at the HOA, qualifying her to run for the board, Miami-Dade State Attorney Katherine Fernandez Rundle said in a news conference after Gallego’s guilty plea. Once in office, Gallego turned the HOA into a “cash cow in her diabolical scheme,” Fernandez Rundle added.

Gallego’s accomplices on the board invalidated 1,900 out of 2,900 signatures for a 2022 recall election, and that same year increased annual assessments on the Hammocks’ 6,527 homes to more than $10 million, a 167 percent hike, according to charging documents.

Eight people –– Gallego and three other board members, as well as Gonzalez and three others who weren’t on the board –– have been arrested and charged for their roles in the fraud since late 2022.

The scheme at West Kendall’s Hammocks –– which at 3,800 acres and home to about 18,000 residents is South Florida’s biggest HOA and the state’s second biggest –– struck a chord with communities across the state governed by associations.

Mismanagement including neglected upkeep, opaque records for hefty assessments, election tampering and retaliation against those who pushed back on board members’ authority has been alleged at HOAs across the state for years.

More than half of Florida residents live in communities governed by either homeowners or condominium associations, including 9.4 million people who reside across 50,000 HOAs, according to the Miami-Dade State Attorney’s Office, which investigated the Hammocks.

Gallego stepped down from the board following her first arrest in 2021 on grand theft and organized fraud charges over misappropriating $60,000 from the HOA.

Last month, Gallego, 44, and Gonzalez, 49, who had maintained their innocence for nearly four years and were awaiting their trial date, pleaded guilty. “I am guilty,” each separately said in court. Gallego was the only defendant in the scheme denied bond and held in jail for over two years awaiting trial, and she wore an orange inmate uniform during her guilty plea.

Gallego was sentenced to seven years in prison –– the longest known prison sentence for an HOA president nationwide –– with credit for time served, and seven years of probation. She is banned from ever setting foot at the Hammocks and from seeking work at an HOA. Her husband was sentenced to seven years of probation and tendered a $50,000 check to the HOA. The couple deeded to the HOA a 5-acre south Miami-Dade County property valued at $1.2 million, which they purchased with funds stolen from the Hammocks.

Gallego pleaded guilty to one count each of racketeering and grand theft, and Gonzalez pleaded guilty to one count of money laundering under a separate plea deal. Other counts against them were dismissed.

Two other former board members pleaded guilty in 2024 and cooperated with investigators. Charges are pending against the fourth ex-board member and three others alleged to have played a role in the scheme.

Stonewalling, a storefront and a hidden bunker

It took nearly a decade to unravel the scope of the fraud. When investigators filed sweeping charges in 2022, after starting to poke around the case five years prior, they pegged the misappropriated funds at under $2 million.

The amount of the theft was revealed as $11 million after the recent guilty pleas.

Investigators were stonewalled by the Gallego-led board, which sued over records subpoenas, defied court orders to provide records and never provided any documents unless the court was involved, according to prosecutors’ filings.

Gallego sued the state attorney’s office to block enforcement of its subpoenas and separately filed state and federal court complaints against Miami-Dade police officers who had been poking into the HOA’s dealings, alleging defamation and separately deprivation of civil rights over an incident during the 2018 board election.

After the HOA finally turned over some records in 2019, the board tried to charge the police $11,500 for document production.

A former attorney for the Hammocks argued the document requests were overly broad and burdensome, adding that the HOA kept paper records.

Court-appointed receiver David Gersten took over the Hammocks’ dealings in 2022 and pried open the door behind which records were kept –– literally.

Paperwork was found hidden in a “bunker” beneath a hatch in the HOA’s ballroom, as well as many more documents in an off-site storefront labeled a “spa,” Fernandez Rundle said.

Civil suits

At its core, the mechanics of the alleged scheme were straightforward: The former board hired vendors that did no work at the Hammocks and then diverted the HOA’s payments to the bogus contractors, including to the pockets of Gallego and Gonzalez. They spent the funds on travel, wire transfers to Colombia and personal expenses such as veterinary bills, medical bills and household goods, according to prosecutors.

Some of the fake vendors were tied to family and friends of arrested former board members, including Gallego. Some contractors did work at the HOA but were overpaid in order to give kickbacks to the corrupt board members, according to an attorney who worked with the receiver.

Nearly $6 million of the stolen funds were HOA overpayments, payments for services that weren’t provided or for redundant services in 2021 and 2022, the forensic accountant’s report found. At the same time, $1.2 million was overpaid to HOA employees.

During his receivership tenure, Gersten, who has stayed on in a limited basis as Hammocks’ monitor, including for elections, filed civil suits against former board members who weren’t arrested, as well as against ex-HOA attorneys, Gallego’s criminal defense attorney and “insider” vendors for their alleged roles in the scheme.

Most of those cases settled, with defendants admitting to no wrongdoing and they or their insurers tendering millions of dollars to the HOA as part of their settlement agreements.

Alleged conspirators and legacy

Charges are pending against former Hammocks board member Yoleidis Lopez Garcia, who pleaded guilty to one count of grand theft in the second degree. From 2016 to 2021, she served in various board posts, including director, treasurer, secretary and vice president of the board.

Kevin Leonardo Alzate, Gallego’s cousin, pleaded not guilty to charges of perjury by contradictory statements, fabricating physical evidence and resisting an officer without violence. He’s accused of playing a role in the HOA’s dogged fight against releasing records to investigators, including first signing sworn affidavits that he was the Hammocks’ records custodian and then denying he served in the role during his court testimony.

Others charged are Ivan Dario Diez, described as a relative of Gallego, who is accused of posing as a contractor. Jesus Cue, a former Hammocks controller, is accused of creating one of the bogus limited liability companies through which HOA funds were funneled.

Diez pleaded not guilty to charges of grand theft, organized scheme to defraud, fabricating physical evidence, perjury and false entries in books of a business entity. Cue pleaded not guilty to charges including racketeering, money laundering, grand theft and organized scheme to defraud.

The Hammocks case highlighted Florida’s lack of legal oversight over HOAs and prompted legislators to strengthen laws. In 2024, they approved legislation that, among other things, criminalized accepting or seeking kickbacks by board members at HOAs and destroying or refusing to turn over records.