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Director & Officer Theft of Funds–Your Community Association Needs Fidelity Insurance


David Jensen, a longtime municipal judge, respected civil servant, and owner of an insurance company embezzled more than $40,000 from his homeowner’s association (HOA) in the last three years.  This is the second case of this nature in Wisconsin that I have seen in the last four years.  How did the HOA discover the thefts?  According to the Lake Geneva Regional News, Jensen had been treasurer of the HOA for 11 years and after his death on February 8, 2020, the new treasurer found a number of financial discrepancies.  The HOA contacted the police, who investigated the facts and after speaking with Jensen’s wife determined that Jensen “acted alone in the thievery.”  Because of Jensen’s death, no criminal charges will be brought.

  1. BUY FIDELITY INSURANCE (Crime Insurance)!!! I am amazed that every time a theft of funds in uncovered the association never has fidelity insurance. I don’t know if that is the case in this matter, but it always seems odd that the thief could have protected the association simply by purchasing the insurance (or recommending its purchase) but they never do.  Fidelity Insurance is NOT the same as D&O Insurance and is NOT part of your general liability policy.  There are only three real reasons that I can think of that thieves don’t buy the needed insurance:

a.  The thief is afraid the insurance company will uncover the theft (I doubt it);

b.  The thief doesn’t want to spend any money they don’t have to, therefore allowing themselves more money to steal; or

c.  The thief is lazy.

I believe that it is Almost always a combination of b and c.  Keep in mind that in this case the thief owned an insurance company, he certainly knew the value of Fidelity Insurance.

  1. Establish an insurance committee (not one person). Ideally not of people on the board and have them actually look at their insurances.
  2. Have the board review the bank statements each month and ask about any odd or large transactions during the treasurer’s report so all Board members understand where the majority of the money is being spent.


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