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Left Adrift

Forty condo associations, mostly on Chicago’s North Side, have found themselves floating in the backwaters of red ink after alleging they were victims of a monumental condo management fraud

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“There’s a cloud over this building now,” says a condo owner who lives in a building that once employed Regent Realty.

Everyone trusted Jay Strauss. To the residents of the 40 condo associations he managed, Strauss was a grandfatherly figure. Short, white-haired, soft-spoken, dressed as for a family portrait in an oxford button-down and a sweater, he faithfully attended board meetings at even the smallest of his client buildings, spinning stories about taking his wife and grandchildren to his vacation home in Arizona. His 20-year-old business, Regent Realty, boasted testimonials from buildings where he had arranged to build a new porch, or repaired a roof. “You trusted the guy,” says Steve Lukasik, whose condo association was a former client of Strauss’s. “You didn’t think ‘used-car salesman.’ You had this personal comfort level with him.”

Many condo owners are busy professionals who don’t have time to mow their lawns, hire a trash collector, fix a leaky roof—or keep track of how much money is in the association’s account. So they hire a management company, such as Regent, to do those jobs. Regent was supposed to collect assessments from residents, deposit that money in the bank, and use it to pay for utility service and building repairs.

For years Strauss apparently did just that, and managed to build a roster of clients consisting mainly of small, multi-unit walkups. But now he sits at the center of one of the most startling local cases of alleged condo management fraud in recent memory, and hundreds of Chicago condo owners who once trusted him are wondering what happened to their money. 

Last December, just before Christmas, Paul Kolenda started having sus­picions about Regent Realty. Kolenda had known Strauss for years, and Regent had managed his old building. When Kolenda moved to 1934 North Washtenaw Avenue and became treasurer of the condo board, he recommended Regent to the other members. Lately, though, Kolenda thought Strauss had been doing a poor job. He was supposed to have ar­ranged the repair of the waterproofing in the parking garage, but moisture was still seeping through the walls. Then a tuck-pointer put a lien on the 63-unit building, complaining he hadn’t been paid. Two days later, a security company called to complain about an overdue bill. To Kolenda, that was the last straw. He called Strauss and fired him. “I told him, ‘Jay, you’re doing a shit job,’” recalls Kolenda. “I want to see a bank statement.”

In early January 2008, Strauss produced a statement for the condominium’s reserve fund, which owners can tap for unbudgeted expenses, such as major repairs. The fund should have contained more than $375,000. According to the bank, it was down to $43. In an e-mail to Kolenda, Strauss explained that Regent kept all its clients’ money in a single account. He wrote: “In order to avoid writing checks to pay Association bills from 40+ checkbooks we use a disbursement account and write checks for all the Associations from that account.” Fine, Kolenda said. So write us a check for all our building’s assets. Strauss hemmed and hawed. “He made up excuses after excuses,” Ko­lenda recalls. “‘I’m sick.’ ‘I had four funerals this week.’” Finally, Kolenda went to the police, filing a report accusing Strauss of stealing the association’s money.

Greg Catenacci, the treasurer of 1500 North Orleans Street, a 12-unit prewar building on the Near North Side, was also having his doubts about Regent Realty. A painter who had worked on the building was ringing doorbells, demanding payment. Catenacci confronted Strauss. The painter hadn’t completed another job, Strauss explained, so Regent wasn’t paying him for any work. “‘You can’t do that,’” Catenacci recalls telling Strauss. “I asked him to transfer $14,000 to our bank account around Christmas.”

Catenacci says Strauss explained that he was in Scottsdale, Arizona, where his wife was receiving treatment at the Mayo Clinic, and he promised to cut the check as soon as he returned to Chicago. But the check never arrived. Neither did the December financial statement, which was due January 10th. Finally, after weeks of “the runaround,” says Catenacci, Strauss promised him his money on January 22nd. But two days later, when Catenacci went to Regent’s offices in Lake View, he says, the company’s bookkeeper couldn’t help him. “She was just saying, ‘Everything’s fine. You guys are overreacting. Jay will be here soon.’” Catenacci managed to collect his insurance papers. The next day, Regent’s office was locked, never to reopen. Chicago Police detective Dennis McLaughlin says several former Regent employees witnessed Strauss and a crew of workmen taking computers and files out of the office. “All that was left were desks and chairs, that’s it,” says McLaughlin.


Illustration: Arthur E. Giron


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