14 new plea deals filed in Las Vegas-area HOA fraud case

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published April 12, 2012  

Federal prosecutors have filed 14 more plea agreements under seal in the sweeping investigation into fraud and corruption at Las Vegas Valley homeowners associations.

The 14 new defendants each have agreed to plead guilty to one count of conspiracy to commit mail and wire fraud and are being named in a single charging document as part of a group deal, according to copies of sealed federal court papers obtained by the Las Vegas Review-Journal.

In all, 24 people now have struck plea agreements in the far-reaching scheme to take control of homeowners associations. One defendant who previously pleaded guilty, Las Vegas attorney David Amesbury, was found dead March 25 near Sacramento, Calif., of an apparent hanging and will be dropped from the case.

All of the previous 10 defendants, except Amesbury, pleaded guilty to the same conspiracy to commit mail and wire fraud charge. Amesbury pleaded guilty to conspiracy to commit mail fraud and one count of conspiracy to commit bank fraud.

In their court papers, prosecutors Charles La Bella and Mary Ann McCarthy, of the Justice Department's Fraud Section in Washington, D.C., are asking that the charges and plea deals be made public and consolidated under one federal judge to help move the cases more quickly through the court system. The previous 10 cases are before five different federal judges.

The new agreements have been assigned to U.S. District Judge James Mahan, who set a May 3 date to accept the pleas in court.

La Bella, a Fraud Section deputy chief, and McCarthy said defense lawyers for the 14 new defendants all support unsealing and consolidating the cases.

The investigation is continuing and more plea deals are in the works, the prosecutors said.

"The government anticipates filing several more guilty plea agreements as part of this group plea, but will file separate charging documents in connection with those cases," the prosecutors explained.

The names of the 14 new defendants are revealed in the court papers. Those striking deals include Lisa Kim, who once ran Platinum Community Services, a homeowners association management company raided early in the investigation in September 2008. Kim is the wife of retired Las Vegas police Lt. Benjamin Kim, a major target who is among those still negotiating a plea deal. Her lawyer, Charles Kelly, declined comment on Monday.

Also named as a new defendant is attorney Brian Jones, who worked for the now-dissolved law firm of Kummer, Kaempfer, Bonner, Renshaw & Ferrario. His lawyer, Chris Aaron could not be reached for comment. The politically connected firm broke up in 2009, and Jones is said to be practicing law in Utah.

Another defendant striking a new plea deal is former lawyer Jeanne Winkler, who was disbarred in November over allegations she had misappropriated some $233,000 from her client trust account. Winkler also was arrested and charged with theft and embezzlement last year. Her Salt Lake City lawyer in the federal investigation, Jeremy Delicino, could not be reached for comment.

Both Jones and Winkler did legal work for the Vistana homeowners association, one of about a dozen associations dragged into the federal investigation.

Three former Vistana board members, ex-Las Vegas police officer Morris Mattingly, Charles Hawkins and Patrick Bergsrud, also are among the 14 new defendants, the government's court papers disclosed. Hawkins' lawyer, Patricia Palm, declined comment. Attorneys Andrew Leavitt and Tom Ericcson, who represent Mattingly and Bergsrud, respectively, could not be reached for comment.

Another new defendant, Paul Citelli, has a 1994 federal drug conviction in a case that involved 16 defendants, some of whom were suspected as having organized crime ties. Citelli, who now works as a limousine driver, is alleged to have been a straw buyer in the homeowners association scheme. His lawyer, David Brown, declined comment.

The other defendants pleading guilty, according to prosecutors, are Rosalio Alcantar, Robert Bolten, Glenn Brown, Michelle Deluca, Sami Robert Hindiyeh, Arnold Myers, and Anthony Roy Wilson.

The Justice Department lawyers laid out the scheme in the court documents.

"As charged and admitted in the filed plea agreements, the conspirators, through a coordinated scheme to control the HOAs' boards of directors, general counsel and property managers, instructed the board members to vote in a particular manner that was in the interests of the conspirators," they wrote.

"This included designating lawyers to handle construction defect litigation at the condominium complexes, construction companies to perform construction defect repair work and emergency repair work, attorneys to advise the particular HOA board and community management companies to manage the condominium properties."

Though they have not been named in any federal court documents, wealthy construction defects attorney Nancy Quon and former construction company boss Leon Benzer are alleged to have pulled the strings in the massive conspiracy. Quon, 51, was found dead in the bathtub of her Henderson condominium on March 20, just five days before Amesbury's body was discovered. Authorities do not suspect foul play in either death.

Benzer has had discussions with prosecutors about striking a deal, but he remains a key target of the investigation.

The scheme played out at about a dozen homeowners associations across the valley. Vistana in southwest Las Vegas has independently alleged in court documents that it was deceived into paying millions of dollars for shoddy repair work and work that was never done.

In their secretly filed court papers, the Justice Department lawyers wrote:

"The conspirators gained control of the HOA boards by using straw buyers to buy condominiums in the targeted complexes or by transferring condominiums or some percentage of ownership in the condominiums to designated co-conspirators in exchange for down payments, monthly mortgage payments and monthly condominium association fee payments made by the criminal enterprise."

The banks financing the purchases, the prosecutors explained, were never told that the straw buyers weren't making the mortgage payments.

The straw buyers would run for the homeowner association boards and get elected through dirty campaign tactics that included rigging elections, the prosecutors wrote.

Once the conspirators elected enough members to control the boards, the friendly members would win votes to hire lawyers, construction companies and property managers that were owned, controlled or aligned with the conspirators. The new board members then would be paid to further the financial interests of the conspirators.

In the latest group plea deal, the 14 defendants are agreeing to cooperate in the investigation and pay restitution.

Prosecutors are promising to recommend lighter sentences for those participating in the group plea.

Since the end of August, when prosecutors cranked up the high-profile investigation after more than three years of sifting through evidence, five former homeowners association board members and four community management company employees joined Amesbury in pleading guilty.

Among those who previously pleaded guilty is longtime Republican strategist Steve Wark, a Vistana straw buyer who got elected to its board. Wark also served as a political consultant in the scheme.

Additional lawyers and former police officers are among those yet to be charged. Some are still negotiating plea deals. Judges originally were targeted in the investigation, but so far none have been charged.

Prosecutors have the option of taking evidence to a federal grand jury against the targets who have not cooperated.

Court documents unsealed in the case so far have bared wrongdoing at half of the dozen homeowners associations named in the investigation.

In addition to Vistana, Sunset Cliffs in the southwest valley, Chateau Versailles in the northwest and Park Avenue in the south are among the associations prosecutors have identified as victims.

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