Las Vegas businessman enters guilty plea in federal HOA fraud case

In the first of what is expected to be a wave of criminal cases, political strategist and businessman Steve Wark pleaded guilty Tuesday in the long-running federal investigation of Las Vegas Valley homeowners associations.

During an hourlong hearing, Wark, 54, a longtime Republican political operative, pleaded guilty to one count of conspiring to commit mail and wire fraud. The charge draws a maximum 30 years in prison and $1 million fine, but Wark has agreed to cooperate with federal prosecutors, who are recommending reduced prison time.

In a news release, Justice Department officials in Washington, D.C., said Wark admitted playing a role in an elaborate scheme that gained control of homeowners associations to hand out legal work and construction contracts to companies preferred by his fellow conspirators. He also admitted receiving cash payments and an interest in a condominium at Vistana, one of the developments under investigation.

Prosecutors said in court that the scheme took place from August 2003 through February 2009.

In all, nearly a dozen homeowners associations had become embroiled in the scheme, according to the criminal information filed against Wark. The associations named in the 10-page information in addition to Vistana included Chateau Versailles, Chateau Nouveau, Park Avenue, Sunset Cliffs, Pebble Creek, Mission Ridge, Mission Pointe and Horizons at Seven Hills.

Senior U.S. District Judge Lloyd George set a Dec. 16 sentencing for Wark, who is free on his own recognizance, and ordered him to surrender his passport. As part of his plea agreement, he will pay more than $94,000 in restitution.

Afterward, Wark and his lawyer, Angela Dows, declined to comment.

The Las Vegas Review-Journal reported in March that federal prosecutors had identified 75 to 100 co-conspirators, including judges, attorneys and former police officers, at various levels of the massive homeowners association scheme.

About two dozen targets of the investigation are said to be taking plea deals that would ensure their cooperation in the prosecution of higher-level players in the scheme.

In court Tuesday, Charles La Bella, deputy chief of the Justice Department's Fraud Section, told George that Wark's case was one of four filed under seal, and four more cases were expected to be filed in the coming days.

La Bella said another 10 to 15 criminal cases could be filed over the next six weeks. George ordered Wark's case unsealed.

Wark was president of the Vistana homeowners association in 2005 when one of the investigation's key targets, construction defects attorney Nancy Quon, was suing developer Rhodes Ranch over faulty plumbing and other problems at the condominium development.

The fraud investigation became public three years ago with raids of law firms, homeowners association offices and businesses across the valley.

FBI agents seized records related to a scheme to rig homeowners association board elections to position co-conspirators, including former police officers, who would push the boards to file construction defect lawsuits against builders.

Legal work and multimillion-dollar repair contracts then would be funneled to associated lawyers and companies.

Wark admitted that he became a "straw purchaser" in the scheme and bought a condominium at the Vistana community with money provided by his co-conspirators so that he could become a member of the homeowners association, the Justice Department said in its release.

His co-conspirators provided the down payment and paid his monthly mortgage and homeowners association dues.

The goal was to use his position to "manipulate" the association's business to enrich the co-conspirators at the expense of the association's true homeowners, the release said.

"Wark admitted that after being elected to the Vistana board and accepting payments from his co-conspirators, he subsequently voted in a manner directed by and favorable to his co-conspirators,"  the Justice Department said.

The department's Washington-based Fraud Section took over the wide-ranging investigation from the U.S. attorney's office in November.

Prosecutors in the section arranged the plea agreement meetings away from the U.S. attorney's office, which had asked to be taken off the case to avoid an appearance of a conflict of interest. An investigation was also launched to determine whether anyone in the office had leaked information about the case to the targets.

Attorneys with the Justice Department's Public Integrity Section in Washington were trying to determine whether Quon was getting information.

A Justice Department spokeswoman said Tuesday that the department has now dropped that investigation.

"The Public Integrity Section looked into the allegations of leaks from the U.S. attorney's office and has completed its review and determined no further action is necessary," the spokeswoman said.

Quon, 51, whose law office was searched in the September 2008 homeowner association raids, also is at the center of another criminal investigation by Las Vegas police.

Her live-in boyfriend, former Las Vegas police officer William Ronald Webb, was charged in November in a scheme to arrange her death using what the couple thought were undetectable illegal drugs.

Then on Aug. 17, both Quon and Webb, 43, were indicted in what investigators say was another suicide scheme that involved setting fire to her home.

Clark County prosecutors allege Quon set the Oct. 28 fire in a botched suicide attempt to escape the pressure of the federal homeowners investigation.

In all, Quon faces five felony charges in the local case -- including first-degree arson, conspiracy to commit arson and insurance fraud stemming from the Oct. 28 fire, which caused $250,000 to $300,000 in damage to her Rhodes Ranch home.

Quon, who once reportedly brought in $100 million through construction defect lawsuits for homeowners associations, has denied planning her own death and setting the fire. She has not been charged in the federal investigation.

Trending topics:

• federal investigation
• fraud
• HOA
• homeowners associations
• Jeff German
• Steve Wark

Comments

Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.

1. Diane.Bender Sep. 2, 2011 | 11:01 a.m. Report Abuse

   Finally the investigation moves forward. How many honest companies have been put out of business or are on the brink of going out of business because of all the dishonesty?
   Board members pay attention, don't rely on the attornies or the contractors, hire a professional firm to guide you through the process, and do your homework. Talk with other associations and see how their recon work went. We homeowners pay the fat cats and end up with sub standard work and less money than we deserve to get our repairs done.

2. new york Sep. 1, 2011 | 2:21 p.m. Report Abuse

   is it any wonder nobody wants to buy a house in Nevada. This bunch of crooks wants to tell you exactly what you can and cannot do with your property. Then everybody is on the take and the homeowners pay for everything. Rent, there is no reason to own

3. CS Sep. 1, 2011 | 7:49 a.m. Report Abuse

   waldo - it wasn't "let me help all of you".
   
   I am done commenting for now.

4. TIME TO CHANGE Sep. 1, 2011 | 6:26 a.m. Report Abuse

   Let's get real, the real problem is that cozy relationship between management companies and Attorneys, you "YOU PAT MY BACK I PAT YOUR BACK" is the way it works. Through nice cooperating Attorneys, management companies over power a Board, often with threats of the big bad OMBUDMAN will come after us, we will lose our license, the Board could face fines or charges, only the management company knows what is good for home owners, management companies love radical Board members with personal agenda's because they play right into the management company/attorney game.Management companies will undermine honest BOARD MEMBERS to get control of your Board, Why do management companies want so much control of VENDORS contracts at HOA'S can you say "KICK BACKS" Put the criminal investigation more on the role management companies play in corruption,look at so called clean Law firms and how they manipulate the CC@R'S to support management companies agenda's, it is a big game designed ,to milk home owners one way or the other,ethically and morally corrupt. If a Board wants real advice turn to the RJ and their HOA experts, stay away from Attorneys recommended to you by equally ethically challenged management companies, it is a big scam game, all legal.

5. Waldo.Lydecker Aug. 31, 2011 | 9:02 p.m. Report Abuse

   To CS,
   
   What did David Roger say in his letter to you?

6. Throwing.Bones Aug. 31, 2011 | 8:19 p.m. Report Abuse

   Throwing.Bones wrote on March 09, 2011 03:57 PM:
   You all remember the "DEM BONES" song - "the hip bone's connected to thigh bone..." and so on? Please be a little more patient as the Justice Department lawyers from Washington build the skeleton of the various criminal schemes operatng through the RJC and family court. Sing along: THIS scheme's connected to the OTHER scheme. That scheme's connected to A'NOTHER scheme. That scheme's connected to a FURTHER scheme - TAR'GETTING the public! HOA - MEDICAL MAFIA - PROBATE -GUARDIANSHIP - LAND BARRONS, etc. The RJC makes WI, CHEATUM & HOW look like a PUBLIC INTEREST LAW FIRM. Perhaps the RJC should change it's name to: CAC - Criminal Accomplishment Center. The Mission: Legalizing otherwise criminal activity for the citizens of Nevada.
   
   Now class, the way I see it, we now have a fracture of the RIGHT FIBULA! Way to go DOJ Washington!!! Thank you. Please stay, we NEED you. Note: Some of the HOA PLAYERS have starring roles in simultaneous PRODUCTIONS!
   
   HawkEye, you still there? CS, congratulations on your tenacity - don't stop. There are SO MANY of us from the various COURTHOUSE schemes. We kept our letters and other evidence too! Read this comment again and again...Can I get a WINK-WINK?

7. JR.Schmidt Aug. 31, 2011 | 8:09 p.m. Report Abuse

   Well, what can you expect from a state that can do no better than elect Harry Reid and John Ensign as senators.

8. bruce.baxter Aug. 31, 2011 | 4:33 p.m. Report Abuse

   Incredibly good news!!! And it appears that it will only get better. The suspense is killing me. Many of us are cheering for our favorites. My own community manager accepted a trip to Cabo San Lucas to chase Cabana boys as she put it.
   
   
   
   "Wark admitted that after being elected to the Vistana board and accepting payments from his co-conspirators, he subsequently voted in a manner directed by and favorable to his co-conspirators," the Justice Department said."
   
   Anyone truly believe this totally unfounded and wild assertion by the Justice Department?
   
   
   Okay, that wasn't funny. We all believe it and that this pattern is widespread.
   
   
   So let the heads roll, justice is sweet! But please, please, get them all.

9. CS Aug. 31, 2011 | 3:26 p.m. Report Abuse

   Julius,
   
   You were in bed with them, especially your hockey game buddy.
   I would slither under the bed so the law doesn't find you.
   I am shocked you have the gall to comment.

10. julius.berezovsky Aug. 31, 2011 | 3:22 p.m. Report Abuse

    till steve that when he takes a shower he better not drop the
    soap. this guy is real scum. hope he injoys is time at taxpayer
    expence.
    julie.b

Read All Comments