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HOA fraud investigation may last months
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LAS VEGAS REVIEW-JOURNAL
Updated: Nov. 12, 2011 | 8:43 a.m.
Federal prosecutors are in no hurry to wrap up their far-reaching investigation into the unlawful takeover of Las Vegas Valley homeowners associations.
In court this week, Mary Ann McCarthy, a trial attorney with the Justice Department's Fraud Section in Washington, D.C., told U.S. District Judge Gloria Navarro that the closely watched investigation is likely to continue for another eight months.
As a result, Navarro scheduled a July sentencing for Denise Keser, the latest defendant to plead guilty and strike a deal with prosecutors to cooperate in the case. That should allow the judge to consider the extent of Keser's cooperation before determining her sentence.
Prosecutors also filed court papers this week seeking an eight-month delay in the sentencings of the other nine cooperating defendants, including the first defendant to enter a plea, well-known political strategist Steve Wark, who was set to go before Senior U.S. District Judge Lloyd George on Dec. 16.
The delays have become necessary as prosecutors map out their strategy in the coming months to obtain indictments against higher-level players in the massive conspiracy.
"The United States anticipates future pleas, indictments and the possibility of one or more trials of co-conspirators and targets," the Justice Department lawyers wrote in their court papers. "These events may allow the defendants the opportunity to provide further cooperation as witnesses, including the possibility of testifying at trial."
Prosecutors have alleged that the scheme involved stacking homeowners association boards with friendly members who would hand out legal work and construction defect contracts at the expense of the associations and their homeowners.
The complicated investigation has targeted lawyers, judges and former police officers. But so far, only one lawyer, David Amesbury, has been charged. Amesbury pleaded guilty Oct. 24 to rigging homeowners association elections at Chateau Nouveau in southwest Las Vegas and Pebble Creek in the southeast valley.
Since the end of August, when federal prosecutors cranked up the investigation after more than three years of sifting through evidence and identifying as many as 100 co-conspirators, five former homeowners association board members have pleaded guilty. So have four property management company employees.
Court documents unsealed in the case, so far, have bared wrongdoing at half of the dozen homeowners associations dragged into the investigation. Vistana and Sunset Cliffs in the southwest valley, Chateau Versailles in the northwest and Park Avenue in the south also have been identified by prosecutors as victims.
Prosecutors expect to file as many as 15 more plea agreements with cooperating defendants in the coming weeks, as they zero in on the central figures in the scheme.
At some point, the Justice Department lawyers are expected to present evidence to a federal grand jury against the bigger players. That would involve hauling defendants who have struck plea deals before the panel to testify.
Prosecutors have not identified in court documents the construction company owner and the construction defects lawyer behind the scheme.
But some of the latest defendants to plead guilty have alleged in court that former construction company boss Leon Benzer and attorney Nancy Quon pulled the strings.
Neither Benzer nor Quon have been charged in the federal investigation, and there have been courthouse rumblings for weeks that Benzer was being pressured to cooperate. The offices of Benzer and Quon were among those searched in a September 2008 raid conducted by the FBI, Las Vegas police and IRS Criminal Investigation.
In her litigation heyday, Quon, who once reportedly brought in as much as $100 million in construction defect litigation, was friendly with many lawyers and judges at the Regional Justice Center.
She is facing an array of local criminal charges, including arson and insurance fraud, stemming from a suspicious fire last year at her Rhodes Ranch home. Prosecutors have alleged she set the fire in a botched suicide plot to escape the pressure of the federal investigation. She has denied the allegations.
In court Thursday, Keser alleged that Benzer was gaining control of homeowners association boards around the valley so that Quon could win support to file construction defect lawsuits and Benzer and his company, Silver Lining Construction, could win approval to do the repairs.
Lawyers for Benzer and Quon have declined to comment on the allegations.
According to court documents, the takeover scheme involved finding "straw purchasers" to buy condominiums at various developments and getting them to run for seats on the boards. The straw buyers were elected through classic dirty campaign tactics that included forging ballots and digging up dirt on candidates not supported by the co-conspirators.
Once on the boards, the paid-off members steered business to the co-conspirators, the documents allege. The co-conspirators also hired lawyers to advise the homeowners associations and created property management companies to run them with the sole purpose of looking out for the financial interests of the co-conspirators.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.
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Fausto is quite the comedian! Imagine suggesting that the Attorney General would do anything to act on behalf of citizen allegations of fraud and abuse against the Real Estate Division, Ombudsman Office, and the CIC Commission members!! What a joke! We all know that the AG's job is to "DEFEND & PROTECT" the state agencies against public allegations of fraud and abuse! No, the only chance citizens have for HOA justice is through the Governor, the Courts, FBI and bipartisan political activism. And, we can pray that the HOA system achieves at least a modicum of justice for homeowners in the near future to avoid seeing HOA property values sinking below those of non-HOA neighborhoods. No doubt the legal disclosure requirements of the Real Estate industry will have to start including the broad range of HOA board deficiencies, secret obligations, and financial misconduct. Otherwise the sellers could be exposed to future law suits after it is discovered the sellers and real estate agents have conspired to fail to fully disclose all of the serious negative elements of the property and its HOA.
I appreciate the response, Homeowner. I'll check the archives. I remember Ms. Copening's comment "I needed a job and they were nice enough to hire me" and thought at the time that it was an odd statement. Employers don't hire people because they're trying to be "nice".
The title of this article should have been " HOA fraud investigation may last YEARS" :)
You are correct Ms. Copening is very involved. She is employed by Pulte-Del Webb. During the last session a homeowner filed a request that she recuse herself due to her conflict of interest. This legislature did not even have a formal process set up to hear the complaint and had to form procedure. And then they found she did not have a conflict of interest. Unbelievable!! She is an example of big corporate money funding and electing officials without the interest of the voters anywhere on the list of priorities. I urge you to look at the RJ archives that covered this outrage.
I don't read every article written about this investigation but in the ones I have read, I've never seen Alison Copening's name mentiioned. She's the Nevada state senator who introduced seven bills during this session of the legislature to regulate HOAs. Is it possible she could be involved in this some way?
Mr. Baxter is correct and I pray that the real root of the problem, government officials and employees are some of the bigger fish on the FBI radar. Only when state officials and employees do their lawful job instead of the aiding and abetting of the criminals praying on homeowners will there be fair and honest justice for the homeowners and taxpayers instead of biased protection for the campaign contributors like the industry professionals now protected by those officials and employees.
Fausto: Can't believe that you wrote the following: "For those who want to pin the "no-cooperation" angle on this from the Ombudsman and NRED you are wrong. They kicked this whole matter elsewhere in state government...where it should have been...to the Attorney General's office. Want to go after anyone for not doing a thing...go after them (most notably Catherine Cortez Masto)." HAVE YOU NO SHAME? YOUR HUGE MISDIRECTION PLAY WILL GET GAIN LITTLE CREDENCE WITH THOSE THAT HAVE ATTEMPTED TO OBTAIN JUSTICE AT THE HANDS OF THE OMBUDSMAN'S OFFICE OR COMMISSION FOR COMMON-INTEREST COMMUNITIES. ALSO, IT IS DOUBTFUL THAT ANYONE OTHER THAN A FLACK FOR CAI WOULD TRY TO CLAIM THAT THE NEVADA REAL ESTATE DIVISION HAS NOT BEEN TOTALLY DISCREDITED IN ANY MATTER REQUIRING AN INVESTIGATION. ELECTION FRAUD FOR THE PURPOSE OF LINING THE POCKETS OF THE PERPETRATORS SIMPLY IS NOT WHERE IT ENDS AND YOU DARN WELL KNOW IT. FOR YOU TO MAKE THE CLAIM THAT THE OMBUDSMAN'S OFFICE AND NRED KICKED THIS THING TO THE STATE AG'S OFFICE TELLS ME THAT YOU ARE ON THE INSIDE SOMEWHERE. IF THIS IS TRULY THE CASE, BETTER BE PREPARED TO PROVE IT. IN OTHER WORDS, WHERE'S YOUR DOCUMENT TRAIL. AT THIS POINT I DEMAND THAT THE STATE LEGISLATURE USE ITS SUBPOENA POWERS TO INVESTIGATE SIMILAR TO A CONGRESSIONAL INVESTIGATION. SO THANK YOU FOR THAT TIDBIT. I HOPE THE REPORTER FROM THE RJ PICKED UP ON YOUR CLAIM.
The Ombudsman might just be the most useless entity to exist in the State of Nevada. I brought a 250K+ fraud to their attention only to have it dismissed, and then upon appeal, dismissed again. Their reason for dismissal had nothing to do with the issue itself, it was clear they were looking for a way to not investigate it
the entire community of Laughlin is awaiting a visit from the DOJ as Quan and Silver Lining swindled every HOA in the Laughlin community with Construction defect cases... I sure the feds will get to our community in due time!!
LAKESIDE PLAZA CONDOMINIUM (CONNED-O) ASSOCIATION, RENO, NEVADA needs to be investigated by the feds for EMBEZZLEMENT & ILLEGAL FORECLOSURES!
EMBEZZLEMENT (TAX EVASION): Washoe County District Attorney Case # 406537; Reno Police Department Case # 08-031672
FALSE ARREST; RESTRAINING ORDERS against homeowners that questioned financials (embezzlement) on advice/request of HOA attorney, GAYLE A. KERN, ESQ. Some homeowners were disabled and elderly - constituting elder abuse. See Sparks in-Justice Court to verify unlawful restraining orders.
KICKBACKS to BOARD DIRECTORS and UNLAWFUL DEBT COLLECTION (EXTORTION)
substantiated by letters from STATE OF NEVADA.
All these actions have resulted in several UNLAWFUL FORECLOSURES which adversely affect the homeowners', their credit, Fannie Mae and, ultimately, taxpayers.
In addition, Gayle A. Kern, Esq. has filed a SLAPP lawsuit in federal court in retaliation against an unlawfully-foreclosed victim homeowner.
Oh, and I almost forgot -HOA attorney Gayle A. Kern, Esq. has had several dealings with Nancy Quon, Esq.