Central figure, conspirators in HOA scheme indicted by federal grand jury

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published January 17, 2013

Leon Benzer, the former construction company boss at the center of a long-running investigation into fraud and corruption at homeowners associations, and 10 other defendants were indicted Tuesday by a federal grand jury.

The long-awaited indictment is part of the final Justice Department push to charge conspirators in a massive scheme to take over homeowners associations across the Las Vegas Valley between 2003 and 2009.

Two Las Vegas lawyers, Keith Gregory, 59, and Barry Levinson, 45, were among those charged in the 18-count indictment. Levinson's license to practice law was temporarily suspended in September amid an investigation by the State Bar of Nevada into allegations he misappropriated client funds.

All of the 11 defendants were charged with one count of conspiracy to commit mail and wire fraud. Most of the defendants also face varying counts of mail fraud and wire fraud.

The sweeping investigation, spearheaded by the Justice Department's Fraud Section in Washington, is thought to be the largest public corruption case federal authorities have brought in Southern Nevada.

A total of 28 defendants have pleaded guilty in the high-profile investigation, which has been active for more than five years. All but one of the defendants agreed to cooperate with federal prosecutors in anticipation of Tuesday's indictment.

The investigation became public in September 2008 when FBI agents and Las Vegas police led a raid across the valley to gather evidence.

Officially, the case is not over. More defendants are to be charged in the scheme and the Internal Revenue Service is gearing up to file criminal tax charges against some of the latest defendants.

"Today's indictment demonstrates the continued commitment of the FBI and its law enforcement partners to identify and root out public corruption at all levels," said William C. Woerner, acting special agent in charge of the FBI in Las Vegas. "This case had substantial impact on the Las Vegas Valley and will continue to reverberate for many years to come."

Benzer, 46, the former owner of Silver Lining Construction Company, and the other defendants are to surrender to the FBI Wednesday morning and make initial court appearances later in the day. One defendant is in custody in Texas.

The criminal case has been assigned to U.S. District Judge James Mahan, who last year handled a group plea deal of 15 defendants in the investigation.

Prosecutors have alleged that Benzer, who now drives a taxi, and the late construction defects attorney Nancy Quon pulled the strings in the scheme.

The 19-page indictment called Benzer and Quon the masterminds of the conspiracy and its "principal sources of funding."

Benzer, Quon and others funneled more than $8 million through secret bank accounts to land lucrative legal, construction and community management contracts from the homeowners associations, the indictment alleges.

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

In all, the indictment alleges, Benzer and company unlawfully put in place straw buyers at 37 condominiums in the developments they targeted in the takeover plot.

Prosecutors identified 11 condominium associations in the indictment as victims of the scheme: Vistana, Park Avenue, Chateau Versailles, Chateau Nouveau, Jasmine, Sunset Cliffs, Palmilla, Pebble Creek, Mission Ridge, Mission Pointe and Horizons at Seven Hills.

Benzer's half-sister, Edith Gillespie, 51, was among those charged in the federal indictment. She is alleged to have been a straw buyer who helped recruit other straw buyers.

The other seven defendants also were straw buyers, according to the indictment. They are: Jose Luis Alvarez, 45; Rodolfo Alvarez-Rodriguez, 44; Ricky Anderson, 49; David Ball, 44; Maria Limon, 45; Charles McChesney, 47; and Salvatore Ruvolo, 84. All but Anderson, who lives in Texas, are Las Vegas area residents.

A 12th new defendant, former Benzer confidante Ralph Priola, is being charged separately, the indictment said. His case is still under seal.

Gregory and Levinson are alleged to have been installed as general counsels at several homeowners associations to look out for Benzer's interests.

Benzer, who once considered striking a plea deal with prosecutors, obtained his construction defect work at the associations through Silver Lining Construction. His lawyer, Dan Albregts, did not return phone calls Tuesday.

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

Her death was one of four tied to the investigation.

Another Las Vegas lawyer, David Amesbury, hanged himself in Northern California five days after Quon's death. Authorities found no evidence of foul play.

Amesbury, 57, who once ran a popular courthouse restaurant with Benzer, pleaded guilty in the investigation in late 2011. Three weeks after his plea, he was found badly beaten on the street of a gated Henderson neighborhood.

Former Las Vegas police officer Christopher Van Cleef, whose name had surfaced in the investigation, shot himself to death a few days after the September 2008 raid. And Robbi Castro, a former Vistana homeowners association board member, died in 2010 of a drug overdose.

Authorities have said the four deaths were not connected.

Although Quon was not charged in the federal investigation, she was forced to battle state criminal charges stemming from two failed suicide plots authorities alleged occurred in late 2010 under the weight of the investigation.

One of the plots involved a suspicious fire at her Rhodes Ranch home, where she was rescued unconscious on the sofa of her family room. The other involved drugs her boyfriend, former police officer William Ronald Webb, bought from undercover detectives during a secretly recorded sting.

At the time of her death, arson and insurance fraud charges tied to the fire had been dismissed against Quon, but she was facing a drug charge in the sting that ensnared Webb. Eventually, Webb pleaded guilty.

The federal investigation, which originally was overseen by the Nevada U.S. attorney's office, moved slowly after the 2008 raid until the Justice Department in Washington took it over in late 2010.

The Justice Department intervened after allegations had surfaced that Quon was getting leaks out of the U.S. attorney's office that had potential to compromise the investigation. The Fraud Section took the reins after the U.S. attorney's office disqualified itself while the Justice Department's Public Integrity Section investigated the alleged leaks.

In August 2011, on the same day the first defendant was charged and pleaded guilty in the homeowners association investigation, the Justice Department said it had completed the criminal investigation into the leaks and did not need to take any action.

The first defendant was longtime political consultant Steve Wark, a business partner of Benzer's and a former president of the Vistana homeowners association board.

Following his plea, an array of lawyers, former Las Vegas police officers, association board members and community management company employees tied to Benzer and Quon struck deals with prosecutors.

Earlier in the investigation, there was talk that judges friendly with Quon might face charges, but so far that has not happened.

The investigation highlighted an unusual display of cooperation between federal and local law enforcement officers.

FBI Agent Mike Elliott and Detective Robert Whiteley, both experts in public corruption, partnered on a daily basis over the past five years to put together the criminal case.

The lead prosecutor is Charles La Bella, a Fraud Section deputy chief who oversees investigations on the West Coast.

La Bella, based in San Diego, attracted national attention following the 1996 presidential race when then-Attorney General Janet Reno appointed him to head a task force to investigate possible Democratic fundraising abuses during the campaign.