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Second defendant pleads guilty in HOA case
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LAS VEGAS REVIEW-JOURNAL
A second defendant in the long-running fraud investigation of Las Vegas Valley homeowners associations pleaded guilty Tuesday in U.S. District Court .
Darryl Scott Nichols, 47, of Las Vegas entered a guilty plea before U.S. District Judge Philip Pro to one count of conspiracy to commit mail and wire fraud, the Justice Department in Washington said in a news release late Tuesday. His sentencing is set for Dec. 4.
Last week, longtime Republican political strategist Steve Wark pleaded guilty to the same charge, which draws a maximum 30-year prison term.
Both men have agreed to cooperate in the investigation and are among about two dozen targets striking government deals over the next several weeks as part of an effort by prosecutors to obtain indictments against higher-level players in the massive fraud scheme.
Nichols admitted to playing a role in the scheme that prosecutors allege gained control of homeowners associations to hand out legal work and construction contracts to companies preferred by his co-conspirators.
In all, nearly a dozen homeowners associations have become embroiled in the scheme, according to federal court documents. The associations named in the documents include Vistana, Chateau Versailles, Chateau Nouveau, Park Avenue, Sunset Cliffs, Pebble Creek, Mission Ridge, Mission Pointe, Palmilla and Horizons at Seven Hills.
Prosecutors allege the scheme took place from August 2003 through February 2009. Nichols admitted to joining the conspiracy in November 2005.
According to the Justice Department, Nichols admitted that he became a "straw purchaser" of condominiums at Chateau Versailles, Sunset Cliffs and Palmilla. He got elected to the homeowners association boards at Chateau Versailles and Sunset Cliffs.
"Nichols admitted that he was given cash payments for his assistance in purchasing the properties, obtaining HOA membership status, rigging elections and using his position to manipulate the HOAs' business to enrich the co-conspirators at the expense of the HOA and legitimate homeowners," the Justice Department said.
To ensure that Nichols and other straw buyers would win their board elections, court documents alleged, "Nichols and his co-conspirators employed deceitful tactics," including forging ballots.
Nichols admitted that in June 2008, at the request of his co-conspirators, he agreed to mail phony ballots from California to Las Vegas to make it appear as though legitimate out-of-town homeowners were voting, the documents said.
Once on the homeowners association boards, Nichols accepted payments from his co-conspirators and "voted in a manner directed by and favorable to his co-conspirators," the documents alleged.
The fraud investigation became public three years ago with FBI raids of law firms, homeowners association offices and businesses across the valley.
The investigation is being handled by the Justice Department's Fraud Section in Washington.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.
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I'm so glad copies of the ballots and those phony CA addresses were copied!!
Green Dragon Regular:
Although I am sympathetic to your position, sadly what you suggest is basically impractical if you prefer living in a subdivision over a sprawling estate that a single homeowner owns and controls. However, if there are subdivisions out there that are not "Planned Unit Developments", in other words, no common elements such as private roads, entrance, pools or other amenities, absolutely disband your HOA. Check your mortgage, if it contains a "Planned Unit Development Ryder" then it is a requirement of your mortgage to have an active, viable HOA and you are required to support it. For what it is worth, we have a summer home in Idaho. We have no common elements and some of my neighbors came to me to start an HOA. They were concerned about a couple of lots that have not yet been built on and wanted some control over their neighbors (as in busybodies). I called local government and compelled the owners of the vacant lots to mow them. The two lots at the front of our subdivision are vacant and include our entrance. I personally mow this area and am happy to do it to avoid an HOA and the Nazis that usually try to run them. So far I am fighting off the proponents of bondage. Fortunately those with bullying tendencies are seldom smart enough to get much done on their own, but they will employ various tactics to compel others to bend to their will.
@Jon.Friedrich-
Or, people could just stop purchasing homes in HOA neighborhoods and move to dissolve extant ones.
Little Red:
Not sure who you are referring to but if he's LDS, I'd like to see him pay triple. You know, prune the vineyard, drain the swamp, purge the system, wolves in sheep's clothing, etc. Sadly, what is unethical isn't always unlawful.
Excellent post by Jonathan Friedrich! Woody3733, you are an idiot. This is nonpartisan. That said, as a registered Republican, I have no problem with them getting double the sentence of anyone else. As a Mormon, I'd like to see any crooked Mormons caught up in these schemes get triple the normal sentence. As for Democrats, I respect them. We don't always agree on things but I'd rather work with you than against you.
I am at a loss to understand the difference between the men who have already pleaded guilty and the HOA attorney we all love to hate that reps more than 200 HOAs in NV. He "refers" other legal firms for construction defect cases constantly, takes a nice fat "referal fee" and walks away with clean hands. "his boards" (his words) look at him as the second coming and think he knows all there is to know about HOA law. I see him as the black knight in much of this, yet he and his ilk, I will bet, escape the net.
Did everyone notice that both are Republicans? That says a lot about what they think of average citizens.
Hopefully the FBI & the Justice Department will not ignore the rest of the Fraud & Abuse players in this Multi Million Dollar scam called Homeowner Associations. These Associations are like hitting the mother load.
It has allowed Greedy Attorneys and a few Biased Arbitrators to bleed a homeowner like a leach when they file a complaint against their Board & are FORCED into Arbitration. This is a "rigged" system known as NRS 38.300 which causes an Owner to lose 87% of the time and having to pay the few HOA attorneys who represent Association's and want-a bee "judges" known as Arbitrators' outrageously high fees usually each charging in the Thousands of Dollars to adjudicate simple disputes . Don't believe me, try it yourself and see what happens.
Lets us NOT forget the Collection companies who hit struggling owners, who fall behind in their Assessments, with THOUSANDS of Dollars in collection "fees" when only a small amount is actually due the HOA! The HOA does not get paid any faster or more than 9 times their monthly Assessment when a collection company is used. That's what the State Statute NRS 116.3116 allows.
This is better than robbing a bank. It's all LEGAL at present. What a GREAT system, and this is NOT just here in Nevada, it is prevalent in many other parts of the US.
Did I mention the incompetent and corrupt managers who also like to steal from these associations. Just check the NRED web site for ALL the Disciplinary Hearings against CAMS for embezzling homeowner funds and allow corrupt Boards to run wild!
Homeowners NEED a Comprehensive Federal Bill of Rights to STOP these abuses. To date these requests have fallen on deaf ears when brought to the attention of our Congressmen and women.
when they (the law) start going after and punishing the real OG's let us know, anything HOA is superceded by builders and finance... HOA are not licensed agents they are home owners too, looking to take advantage of an already unstable market and economy, how can problems get fixed if you are not chasing the culprits.
If they all sing, who will go to jail?