Not guilty plea in embezzle case

By Robyn Moormeister
A Story from Nevada
12:01 a.m. PT Nov 22, 2007

A Nevada City woman accused of embezzling more than $100,000 from her homeowners association as its treasurer pleaded not guilty Wednesday to felony embezzlement and theft charges.

Linda Balch, 61, appeared in Nevada County Superior Court to face three charges of felony embezzlement and one count of theft from an elder. She was joined by her attorney, Thomas Leupp of Auburn, and her husband Tom Balch, a former Nevada City mayor.

Eight of Balch's alleged victims sat in the back row of the crowded gallery, accompanied by two county victim advocates.

When Judge Candace Heidelberger called Balch's case, Balch stood before the judge while Leupp entered the not guilty plea. With Leupp's arm sheltering her, she quickly left the courtroom without responding to questions.

"Is there any chance we'll recover the money?" Woodbridge Townhomes Homeowners Association board secretary Uli Kaestner asked District Attorney Cliff Newell outside the courtroom.

Newell told Kaestner and the other alleged victims that restitution is possible.

"The Balches have assets," Newell said. "They're not destitute, as opposed to some of these cases, where the defendants have nothing."

Balch allegedly used her position as association treasurer to embezzle more than $100,000 from the Woodbridge homeowners association between September 2005 and Sept. 30 of this year and used the funds for personal gain, Grass Valley police Sgt. Doug Hren said.

Grass Valley police arrested Balch Oct. 25. Her bail was set at $100,000, and she posted a $10,000 bond the same day of her arrest.

Balch told residents at a recent homeowners association board meeting that she would do "everything in her power" to pay the money back, Kaestner said.

"She said she did it to keep up her lifestyle," Kaestner said.

Leupp did not return a phone call from The Union.

Mishandling of homeowners association funds is nothing new, said Marjorie Murray, president of the Center for California Homeowners Association Law.

"This is an issue we've been tracking for a long time," Murray said. "There are few controls over money collected by a homeowners association."

According to the center, California law does not demand financial accountability by homeowners associations. Residents hand over more than $200 million in assessments annually to association boards, but they often have a difficult time finding out how boards are spending the money they have entrusted to them, according to Murray's Web site.

Newell said every homeowners association is different, and it is up to the board to assure adequate oversight of its funds.

"This might be a wake-up call to homeowners associations," he said. "They need to be sure there is a system of checks and balances and their procedures are followed."

Since Balch's arrest, the association board removed Balch from her position and assigned four people to run the treasury position instead of one, Kaestner said.

After Wednesday's court hearing, the DA reassured the group of elderly homeowners it is possible that Balch could change her plea in coming months and be ordered to pay restitution.

Newell said he would like to resolve the case as quickly as possible, and he is confident that Leupp - with whom he has worked before - will also help to ensure an expedient resolution to the case.

The maximum possible sentence for Balch's alleged crimes is 13 years in prison if she is sentenced consecutively for each count, but that's not likely, Newell said.

"It could end up being anything down to probation and community service," he said.

According to California law, many crimes occurring out of the same set of circumstances can't be sentenced consecutively, Newell said.

In addition, a clause exists in the sentencing guidelines for the alleged crimes Balch is facing that allows the judge to take into account unusual circumstances.

"It's really up to the judge," Newell said. "It's very unlikely for a first-time offender to go to prison, but there are aggravated circumstances. The victims are elderly and the amount of money is large. These are things a judge would consider."

Balch is set for a pre-trial hearing at 1 p.m. Dec. 13 in Nevada County Superior Court.

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To contact Staff Writer Robyn Moormeister, e-mail robynm@theunion.com or call 477-4236.