A Maryland lady who oversaw house owners associations and embezzled just about $600,000 from citizens to fund her lavish way of life has been sentenced to jail.
Sarah Chester, 44, of Nottingham, MD, won a 20-year sentence, with all however 5 years suspended, after pleading responsible to more than one counts of robbery scheme, forgery, and embezzlement.
Prosecutors say Chester spent the stolen HOA budget on holidays to Europe, nation membership memberships, and different non-public bills.
From 2021 to 2025, a number of HOAs in each Harford and Baltimore counties employed Chester and her corporate, Magnolia Houses, to control the HOAs and their budget, consistent with the Harford County’s Administrative center of the State’s Legal professional.
Chester ran a five-year Ponzi scheme, siphoning cash from each and every HOA into her non-public accounts to finance her lavish way of life, prosecutors say. She created faux financial institution statements to cover her robbery and transferred cash between HOA accounts to refill stolen budget in others.
State’s Legal professional Alison M. Healey stated in a observation shared with Realtor.com®: “To be positioned ready of accept as true with by way of your neighborhood handiest to violate that accept as true with in such an egregious method is despicable and behaviour that is probably not tolerated in Harford County.
1000’s of house owners had been affected
Prosecutors say that over the path of 5 years, Chester’s thefts affected greater than 250 families and roughly 1,500 people.
Fifty sufferers of Chester’s scheme attended her sentencing listening to. A kind of sufferers was once Ashley Sweeney, an HOA board member who helped discover Chester’s crimes in 2025.
“It’s been aggravating and time eating amongst many stuff from being a sufferer of her monetary crimes,” Sweeney wrote on Fb. “She brought about such a lot harm.”
Along with her jail time period, Chester should additionally pay what is predicted to general just about $600,000 in restitution to the affected HOAs.
“I commend the paintings of Assistant State’s Legal professional Ari Kodeck for his efforts in securing a prison sentence on this case, in addition to making sure that restitution is ordered and those communities will at some point be made complete,” stated Healey.
The restitution quantity will stay topic to revision for 30 days whilst the state verifies the full losses claimed by way of the affected HOAs.
When reached for remark, Chester’s lawyer, Matt Kunka, advised Realtor.com, “I’ve to recognize my shopper’s needs and make no additional feedback outdoor of courtroom.”
Why HOA fraud instances are on the upward thrust
“Because the financial system slows down, I believe we can see extra of those instances as other folks start to fall on onerous occasions,” says lawyer Chad D. Cummings of Cummings & Cummings Legislation, who isn’t concerned within the case however has tested the placement.
Consistent with Cummings, in a correctly controlled HOA, the one that approves invoices does now not additionally signal exams and reconcile financial institution statements.
“Chester allegedly had all 3 purposes,” says Cummings. “That’s the principle drawback.”
Cummings says he often sees instances in his observe the place deficient monetary controls result in malfeasance.
“A unmarried supervisor receives tests, can pay distributors, and studies financials to a board that rubber-stamps the whole thing at a quarterly assembly,” he says. “That particular person additionally enlists allies to talk on the board assembly, who would possibly or is probably not accomplices, to lend the illusion of credibility and discourage open dissent.”
Cummings says that there is not any federal company that regulates HOA control corporations, and maximum states impose little to no licensing or bonding necessities.
“Maryland, the place Chester operated, has no statewide HOA supervisor licensing regime,” he says. “All the business runs on accept as true with. Forums that delegate monetary keep watch over to an unlicensed, unbonded supervisor in an unregulated state have created the prerequisites for robbery.”
Householders who’re knowledgeable, display as much as conferences, and ask questions are the most efficient protection towards fraud, in Cummings’ opinion.
“I will not state this with sufficient power: Attend your HOA conferences,” he says. “Learn the monetary statements ahead of the assembly begins. Ask the place the reserves are held and insist a treasurer’s file that incorporates bank-verified balances, now not manager-prepared summaries. Within the technology of AI, it’s too simple to faux financial institution statements. For this reason audits are so essential.”
Cummings says HOA contributors must insist on an unbiased audit, even if their state statute does now not require one.
“In case your board tells you an annual audit is just too dear, remind them that Chester allegedly stole $600,000 over 5 years,” he says. “A $3,000 annual audit would have stuck the fabricated financial institution statements in Yr 1.”
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