A local property management company is shuttered after the person in charge admitted to embezzling money from a trust account.
Margaret “Peg” Shandera told investigators that she took $137,000 from Shadow Mountain Property Management, according to the Arizona Department of Real Estate.
The company had been managing numerous properties around the Verde Valley.
Both renters and owners reported that they suddenly were having difficulty reaching the company in order to either pay rent or collect the money they were owed.
One property owner, Larry Fulton, posted about his difficulties online.
“When we did not get our month’s rent in the mail, we emailed and called them,” Fulton said. “No response and voice mailboxes were all full.”
The real estate department issued a cease and desist order against Shadow Mountain Thursday, Dec. 3.
Louis Detorre, assistant commissioner for operations and legislative affairs with the department, said investigators had been looking at the business for more
than a month.
The order went into some detail about how the embezzlement was discovered.
Shandera was originally issued a real estate license in 2005.
In 2012, Shandera filed with the Arizona Corporation Commission for Shadow Mountain Real Estate and Property Management, PLLC, a corporation where Shandera was the only manager and member.
The department carried out an on site audit of Shadow Mountain on Nov. 2; the business was visited by an auditor and an investigator.
When the team arrived, they noticed that the office was closed and empty, including furniture and equipment.
Shandera was on the premises, according to the order and directly told the investigators that, “I have embezzled $137,000 of trust money and had just closed the business.”
Shandera said she knew she had embezzled that much thanks to software she used to track money in the trust account.
The money had been drained from the account over 10 years, Shandera told investigators. The embezzlement targeted both client funds and security deposits put down by tenants.
The investigators then asked to see financial records.
They weren’t able to.
“Shandera told him that those records had been on her computer and that computer was not available as she had thrown it in the trash,” the department’s order stated.
Shandera told investigators that she had used the money to help her friends and family and also spent some of it on herself.
The department issued Shandera a subpoena to appear before the department in Phoenix Nov. 12 with an order to produce her bank records.
Shandera was a no-show, according to the order.
The next day, the department received an email from Cottonwood attorney David Gordon saying that he had told Shandera not to talk to the Department of Real Estate.
The order finds that Shandera is “guilty of conduct that constitutes fraud or dishonest dealings” and that “she is not a person of honesty, truthfulness or good character.”
The order states that there’s enough to revoke Shandera’s real estate license.
That is not be the end of the legal case.
“It’s now been referred to the Arizona Attorney General’s office for possible criminal proceedings,” Dettorre said.
