Ex-HOA board member pleads guilty to charge

A former homeowners association board member became the sixth defendant Thursday to plead guilty in the far-reaching federal investigation into fraud and corruption at local associations.

Edward Lugo, who served on the board of the Park Avenue condominium complex in the south valley, entered a guilty plea in federal court to one count of conspiracy to commit mail and wire fraud.

Senior U.S. District Judge Lloyd George set a March 22 sentencing.

In a 14-page plea agreement, Lugo admitted playing a role in the massive scheme to stack homeowners association boards with members who pushed for construction defect lawsuits against builders. A dozen homeowners associations have been dragged into the investigation.

Lugo, 47, who lives in the Los Angeles area, admitted in the agreement that his participation began as early as August 2003 and ended in February 2009.

He admitted becoming a "straw purchaser" to get elected to the Park Avenue homeowners association board, as well as helping rig various association elections and managing a "bill pay program" for his co-conspirators that funded other straw buyers around the Las Vegas Valley.

Lugo created several limited liability companies at the direction of one co-conspirator, an unidentified construction company owner, "for the purpose of opening bank accounts and concealing the funds for the Bill Pay Program," according to federal court documents unsealed in his case Thursday.

While living in California, the documents alleged, Lugo used the companies to make payments on condominium units purchased by straw buyers with money he received from the construction company owner.

Lugo also received phony ballots in California from his co-conspirators and then mailed them back to Las Vegas in the election-rigging effort, the documents alleged.

In court Thursday, Lugo acknowledged that he might have to pay as much as $445,000 in restitution to lenders he defrauded in the straw buyer scheme.

When George asked him how he pleaded, he responded, "Guilty, your honor."

Afterward, Lugo and his Los Angeles lawyer, Edward Robinson, both declined comment.

Park Avenue homeowners recalled Lugo and another former board member, ex-police Capt. Frank Sutton, a month after a joint FBI-Las Vegas police raid in the investigation in September 2008. Sutton has not been charged.

Lugo's plea is the latest in a long line of deals expected in the high-profile case.

Lawyers from the Justice Department's fraud section in Washington, D.C., plan to file as many as two dozen criminal cases in the coming weeks. Four trial attorneys, led by Deputy Chief Charles La Bella, are prosecuting the case. The Nevada U.S. attorney's office has removed itself to avoid a potential conflict.

Lugo and the other defendants who have pleaded guilty have agreed to testify for prosecutors in their push to indict higher-level players, who include lawyers, judges and former police officers.

With the help of friendly homeowners association board members, lucrative legal work and repair contracts were funneled to lawyers and companies associated with the scheme at the expense of the homeowners, who were deprived of honest voting on their boards, court documents have alleged.

The board members were straw purchasers elected by the co-conspirators through classic dirty campaigning that included conducting phony polling, hiring private investigators to dig up dirt on candidates and rigging the balloting, the documents alleged.

Last week, Angela Esparza, 24, a property management company employee, pleaded guilty in the case and admitted helping rig elections at several homeowners associations, including Park Avenue.

Esparza admitted removing ballots from an attorney's office so that the ballots would not be counted.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.

Trending topics:

• HOA probe
• federal investigation
• Edward Lugo
• Park Avenue
• Lloyd George

Comments

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1. bruce.baxter Oct. 23, 2011 | 5:45 a.m. Report Abuse

   samsmithson:
   
   Would you care to share who your HOA management company and lawyer were at the time? This may sound like a dumb question but considering the multitude of morons living in HOAs, does your HOA board continue to retain the services of the same management company and attorney or attorneys?

2. samsmithson Oct. 22, 2011 | 2:01 p.m. Report Abuse

   Seven guilty pleas, thus far. A total of approximately $1 Million to be paid in restitution by the crooks. A laughable $30,000 is to be paid to "the HOA's" by Debra Genato. The other $970,000 is to be PAID TO THE BANKS for their "losses" when they foreclosed on the Condo Mortgages held by the crooks...and not a penny of that roughly $1 Million to the REAL victims, the Condo Associations/Owners!!!! Do you see something wrong with this picture? This guy Lugo was the key figure in mailing phony ballots to Rig Elections. Three consecutive elections were rigged at Vistana, ultimately resulting in the loss of more than $7 Million from the Vistana account.
   But, so far, at best, Vistana will probably get only a pro-rated portion of Genato's $30,000...maybe $10,000 of the $7 Million stolen.
   BUT, Lugo pays $445,000 to a bank, and not a penny to Vistana whose elections he was key to rigging!!! What the DOJ prosecutors are doing in the Plea deals is a crime in itself. By the time the various HOAs successfully win a CIVIL lawsuit judgment against these crooks in civil court, the crooks will be bankrupt, penniless....the HOA's won't get a penny. Insanity!!

3. HomeBoy Oct. 22, 2011 | 9:32 a.m. Report Abuse

   Quoting from the story above --- “
   
   “In a 14-page plea agreement, Lugo admitted playing a role in the massive scheme to stack homeowners association boards with members who pushed for construction defect lawsuits against builders. A dozen homeowners associations have been dragged into the investigation.” ------
   
   I would not be surprised to see my HOA named in the near future. Recently a State of Nevada HOA commission whitewashed the Board of Directors of Sun City Anthem in Henderson claiming a “clerical error” rendered months of investigations useless and the entire matter (including some serious charges of wrong doing) was wiped away.
   
   Corruption grows like mold inside a wall until the entire structure is poisoned. So it is with the Nevada Real Estate Division. All the feds need to do is look into the MANY legitimate complaints that have been wiped away by the crooked NRED officials to get a real handle on this travesty of justice.

4. bruce.baxter Oct. 22, 2011 | 9:20 a.m. Report Abuse

   THS:
   
   I think I understand where you are coming from. Heck, I would have never suspected the level of organized mayhem against Nevada homeowners unless I'd experienced it myself.
   
   You are however, naive in the extreme. Defending a very corrupt system makes you part of the problem not part of the solution. The best defense that the perpetrators have is that their actions are so outrageous as to be well beyond believability.
   
   What is needed is a level of resolve approaching that of our Founding Fathers. Apologists and fence sitters need to get the hell out of the way.

5. bruce.baxter Oct. 22, 2011 | 8:36 a.m. Report Abuse

   A quote from the press release by the Justice Department: "According to court documents, once elected, the co-conspirator board members would meet with other co-conspirators to manipulate board votes, including the selection of property managers, contractors and general counsel for the HOA and attorneys to represent the HOA."
   
   Exactly who were these property managers, contractors and general counsel for the HOA and the attorneys to represent the HOA????
   
   This is getting dang good!!! Sure seems to me that one or more of the participants on this thread know who the lawyers and community managers were? Of course there is always a chance that those elected fraudulently to HOA boards simply used their ill gotten influence to hire dumb ones that they figured they could manipulate. Anyone believe this could be the case?
   
   Have to admit, I'm rooting for my favorites. How about you?

6. Fausto Oct. 21, 2011 | 10:01 p.m. Report Abuse

   Sounds like it's "Life, liberty, and the pursuit of lawsuits" for some on this board. Here I thought the mediation/arbitration program at the Real Estate Division's level was put in place by those who complained that lawsuits were too expensive for both sides (to homeowners with little ability to pay for the legal representation needed, and the association who were using homeowners assessments to pay large bills for attorneys).

7. dgruber Oct. 21, 2011 | 7:02 p.m. Report Abuse

   ths - It sounds like you think the laws don't need to be changed. I think you are wrong about that. The laws have been changed, over and over these past few years, by crooked lawyers, lobbyists, and HOA-connected politicians like Senator Alison Copening. Here's an example. When I tried to take my HOA to court I discovered you can't sue an HOA in civil court. You have to take your problem to the ombudsman, who is THEIR ombudsman, who isn't going to do a thing to help you. WHEN did the law change to take away my right to sue my neighbors when their misconduct costs me money? I don't remember voting for a law that takes away my right to sue! I don't remember anybody telling me they were going to vote for such a law. When did that happen? HOW DID THAT HAPPEN?? Because I am outraged that it happened when I wasn't looking. I am an American citizen, and I have always taken certain rights for granted, and the idea that some politicians and lawyers can take away some of my rights without my knowing about it makes me REALLY REALLY mad. So I definitely think we need to make some adjustments to the laws. The current laws leave homeowners like me completely defenseless when lunatics and criminals decide to take over an HOA.

8. ths Oct. 21, 2011 | 2:50 p.m. Report Abuse

   My issue is the generalizing of if you live in an HOA you are a fool, or all HOA's are bad. For one I am thankful for my HAO because of selfish neighbors that don't want to maintain their yard or not park their car in the fire lane. The neighbors elect neighbors for HOA's so you got no one to blame but your neighbors and yourself if your HOA is not run well. That is what I am saying. Yes crime happens at all levels and I agree that people should go to jail, but lumping all aspects of HOA's like your poor choice of words gestapo as a general use is wrong. That is like saying you are an anarchist wanting people to be free to do anything. Actually county and city do have say in your life from the laws they write to the laws on the books code enforcement is suppose to enforce. Their fines are similar and they go in front of not a judge, but city council.

9. Otto de Fay Oct. 21, 2011 | 1:44 p.m. Report Abuse

   @ths, Whoa, Seriously???? Collusion, Coercion, Conspiracy,
   Racketeering are hardly random or occasional "human errors" or "mistakes" people make. They are CRIMES, and they have been the crimes HOA'S have used to function in our Valley for YEARS. Commissioners don't run our lives on a daily basis, city contracts don't directly affect our quality of life, HOA's do. Homeowners' exasperation after enduring years of gestapo-like tactics, Protected by default through inadequate legislation? Hits directly where we live. Coming home to thugs sitting in front of one's home in their cars, making notes on clipboards, or constantly sending out tribunal hearing notices without the prior warnings, or suddenly sending bills for thousands dollars on issues never previously cited, or repeated burglaries facilitated by HOA-run security teams, or stacking our HOA boards and ramming through millions in lawsuits while "purchasing" votes and our properties only to knowingly foreclose on them later...in the THOUSANDS ...Wow, "ths", unless you're headed for the big-house yourself in this ongoing cesspool of scandal, perhaps you may wish to speak with thousands of other exasperated homeowners to gain Jon Friedrich's perspective.

10. ths Oct. 21, 2011 | 1:14 p.m. Report Abuse

    Friedrich why are you so big on this and not talking about the corruption of politicians from the state legislature to Clark County commissioners in the past. Or state and city preferred contracts that go out as it did with UMC and other matters. Or the state employee also doing contract work. You make it like corruption and illegal actions are isolated to HOA's. There are laws on the books on how things should be governed and their are enforcement agencies. Proof is here that the people that cheated the system and used the system for personal gain are now being prosecuted. Sorry there are rules that people have to follow for the pleasure of others. That is part of society and unfortunately over the years social respect has seemed to decline in this world causing the need of certain things. Yes mistakes happen and it is how one addresses and corrects that counts. We are all human and errors happen. Regarding making money if it is done legally nothing is wrong with that and free capitalism helps set the service and costs to everything.

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