Federal judge refuses to dismiss HOA case

Article Courtesy of The Las Vegas Review-Journal

By Jeff German   

Published January 12, 2015


A federal judge Thursday recommended denying a defense motion to dismiss charges against key defendants in the homeowners association fraud case because of government misconduct.

The eight-page decision by U.S. Magistrate Judge George Foley Jr. paves the way for former construction company boss Leon Benzer, attorney Keith Gregory and four other defendants to stand trial on fraud and conspiracy charges Feb. 23 in the scheme to unlawfully take over 11 HOAs around the valley.

Defense lawyers for Benzer and Gregory can ask U.S. District Judge James Mahan, who will preside over the expected two-month trial, to reject Foley’s recommendation.

The lawyers contended prosecutors committed misconduct that allowed the Las Vegas Review-Journal to publish an Oct. 30 article revealing details of failed plea negotiations between prosecutors and Benzer.

The article, which contained information Benzer provided investigators during secret talks in 2011, was based on government reports the newspaper obtained from the electronic court docket while they were public for two days in September.

The investigative reports have since been sealed and stricken from the court record. The reports describe how Benzer corrupted HOA boards through bribery and election rigging to obtain millions of dollars in construction defect contracts.

In his decision Thursday, Foley said he found no government misconduct that rose to the level of dismissing the case.

He also went to the unusual step of taking part of the blame for how Benzer’s secret deal became public.

Foley said he should not have unsealed the reports without allowing Benzer’s lead lawyer, Daniel Albregts, a chance to address the issue. He said he also should have given Gregory’s attorneys, who filed the reports under seal, a chance to withdraw them.

Prosecutors had opposed the effort by Gregory’s lawyers to file the FBI and police reports under seal.

Defense lawyers suggested in court papers that the Review-Journal got the reports from prosecutors, an allegation denied by both the prosecutors and Review-Journal.

Albregts filed a motion under seal seeking a subpoena for the Review-Journal’s court billing records in an effort to support the unsubstantiated defense claim.

But Review-Journal lawyer Maggie McLetchie responded with a court filing putting Albregts on notice the newspaper would move to quash a subpoena for records. Foley then denied Albregts’ secret request.

Last month, Foley denied a defense request to move the trial out of Las Vegas because of what the lawyers said was prejudicial news coverage by the Review-Journal that made it impossible for Benzer and Gregory to get a fair trial.

Foley ruled the newspaper’s stories were “factual in nature” and not inflammatory, as the defense argued. Any potential jurors influenced by the news coverage could be weeded out during the selection process at trial, Foley said.