Key figure pleads not guilty in HOA scheme

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published January 22, 2013

Leon Benzer's long-awaited indictment this week has been a coming out party, of sorts, for the federal and local investigators who have pursued him for years.

His name was linked to the massive scheme to take over homeowners associations as far back as September 2008, when FBI agents and Las Vegas police raided his former business, Silver Lining Construction Company, in a sweep across the valley to obtain evidence in the high-profile investigation.

But in the years after the raid, as investigators methodically built a public corruption case, there was barely a peep about Benzer in court filings.

Privately, federal prosecutors contended Benzer, 46, pulled the strings in the takeover scheme, but because he hadn't been charged, they shied from naming him in plea deals with 28 defendants.

Benzer used to be known only as "Co-Conspirator B" in the plea deal filings, leaving an aura of mystery about the construction boss turned taxi driver they now openly call the "mastermind" of the multimillion-dollar scheme.

The aura disappeared Tuesday, when Benzer's name topped the list of the 11 defendants indicted in the Justice Department's final push to charge conspirators in the scheme at homeowners associations across the valley between 2003 and 2009.

In all, his name was mentioned 66 times in the 19 pages of the indictment.

On Wednesday, with his lawyer, Dan Albregts at his side, Benzer pleaded not guilty to conspiracy, mail fraud and wire fraud charges in the 18-count indictment.

Wearing black slacks, a cream-colored shirt and a black sweater vest, he told U.S. Magistrate Peggy Leen that he could not afford to pay Albregts, and Leen said she would consider appointing the lawyer.

Afterward, Albregts declined comment.

Leen released Benzer on the condition he surrender his passport and restrict his travel to the United States.

Nine other defendants - including attorneys Barry Levinson and Keith Gregory and Benzer's half-sister Edith Gillespie - also pleaded not guilty and were released. All 10 defendants surrendered to the FBI earlier in the day. One defendant was in custody in Texas and being transported to Las Vegas for arraignment later this month.

Justice Department lawyer Charles La Bella, the lead prosecutor in the case, did not seek detention for any of the defendants on Wednesday.

La Bella said that the case was complex and that he was working to provide the defendants with a mass of evidence collected in the five-year investigation.

That evidence includes undercover tapes, La Bella said without further explanation.

Leen set a March 25 trial date for all of the defendants before U.S. District Judge James Mahan, but that date is not likely to be met.

Benzer and the other leading player in the scheme, late attorney Nancy Quon, funneled more than $8 million through secret bank accounts to land lucrative legal and construction contracts from the associations, the indictment alleges.

Through election rigging and other dirty tricks, according to the indictment, the conspirators stacked association boards with members who handed out contracts worth millions of dollars at the expense of the homeowners.

Prosecutors identified 11 homeowners associations they consider victims in the scheme.

Quon, 51, who became wealthy litigating construction defect cases, died in the bathtub of her Henderson home in March before authorities could charge her. The coroner concluded she died of drug and alcohol intoxication.

Quon is not mentioned by name in the indictment but is referred to as "Co-Conspirator B."

"Co-Conspirator B participated in the conspiracy until the death of Co-Conspirator B in March 2012," the indictment said.

Benzer had a chance to cooperate with prosecutors last year but turned them down. Now, he might also face scrutiny from the Internal Revenue Service, which is gearing up to file criminal tax charges in the case.

This week's indictment is part of the final Justice Department push to charge the core of conspirators in the sweeping takeover scheme.

More defendants are to be charged in what is thought to be the largest public corruption case federal authorities have brought in Southern Nevada.