The Traditions subdivision in Aurora has nearly 1,000 homes. (Google)
A property management company has filed for bankruptcy after a judge determined that its owner stole $700,000 from a homeowners’ association in Aurora and spent the ill-gotten gains on a Lincoln, a Louis Vuitton, a stay at the Ritz-Carlton and other frivolities.
Mastino Management, in Parker, filed for Chapter 11 on May 15. Its co-owner, Kim Bacon, who was found to have orchestrated the theft in Aurora, also filed for bankruptcy that day.
“We cannot comment other than to advise that the final chapter herein has yet to be written,” said Mastino’s bankruptcy attorney, Joseph O’Keefe with the Baker Law Group in Greenwood Village. He vowed that court filings “in the weeks to come…will speak volumes.”
Bacon, of Aurora, has been a property manager for 30-plus years and worked for Colorado Management & Associates until it shut down in 2018. That’s when she and her husband, Rick Bacon, started Mastino and obtained one of the clients that Bacon had worked for at CMA, the HOA for the Traditions subdivision in Aurora, which has nearly 1,000 homes.
According to an April 10 verdict by Judge Ben Leutwyler III in Centennial, all homeowner fees that Mastino collected and held for Traditions went into a Mastino bank account from the time that Mastino was hired by the HOA board until the day that it was fired in 2020.
That arrangement was never disclosed to the board and two former Mastino employees testified at a civil trial in January that they were instructed to hide that fact from the board. Both of those employees “resigned from Mastino because they knew Mastino/Bacon’s conduct was wrong and they did not want to be associated with it,” Leutwyler wrote in his 25-page ruling.
And when an employee at Citywide Banks raised red flags about the problematic arrangement in 2018, Bacon emailed the banker back to say that “It isn’t that big of a deal.”
But it was. About $1.4 million in homeowner assessments went into Mastino’s bank account between May 2018 and August 2020 but only $728,000 was transferred to Traditions’ operating account or spent on Traditions expenses, according to Leutwyler’s verdict last month.
The rest was stolen, he determined. According to Bacon’s own testimony, it was spent on a Lincoln SUV, a Louis Vuitton bag, mortgage payments, payroll, health insurance, restaurant bills, grocery bills, clothes, beauty supplies and home improvements.
The balance in Traditions’ bank account when Mastino was fired was negative 51 cents. Board President Ken Haldeman testified that Traditions was “so close to insolvency” that “it was no joke.” The HOA had unpaid bills dating back to 2018 and no money to pay them.
Bacon and employees at Mastino had known since mid-2019 that “Traditions’ bank accounts were depleted” but used “inflated balance sheets,” to disguise that, Leutwyler found.
Finding that both Mastino and Kim Bacon had committed civil theft, Leutwyler ordered them to pay $2.8 million to Traditions, plus interest and attorney fees. Traditions calculates those fees at $618,000, an amount that Mastino and Bacon consider to be unreasonable.
But neither Mastino nor Bacon will need to pay up until their bankruptcy cases are resolved.
Mastino’s bankruptcy centers almost entirely on Leutwyler’s judgment. The company otherwise owes less than $100,000 to two lenders and has about $200,000 in assets — primarily company vehicles and office equipment. Mastino did not disclose any 2023 or 2024 revenue.
