Important figure in HOA scheme pleads guilty

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published February 10, 2013

A key player in the massive scheme to take over Las Vegas Valley homeowners associations pleaded guilty in federal court Monday.

Ralph Priola, 46, a confidant of former construction boss Leon Benzer, the man federal prosecutors contend is the "architect" of the scheme, entered a guilty plea to one count of conspiracy to commit mail and wire fraud.

U.S. District Judge James Mahan set an Aug. 6 sentencing.

Priola, who is cooperating with prosecutors, acknowledged in his plea agreement that he was a "supervisor" in the scheme, working directly under Benzer, who at the time ran Silver Lining Construction Company.

"Defendant made cash payments to numerous co-conspirators for their participation in the scheme, as well as for expenses associated with furthering the goals of the conspiracy," the agreement said.

Benzer was among 11 people indicted last month in the Justice Department's final push to charge conspirators in the scheme to take over 11 homeowners associations.

Ricky Anderson, 49, the last of the 11 indicted defendants to make initial court appearances on the charges, pleaded not guilty Monday. U.S. Magistrate Judge Bill Hoffman ordered him detained in federal custody.

Anderson, a former Benzer employee serving prison time in Texas for what his lawyers said was a statutory rape conviction, was described in the indictment as an "HOA enforcer."

He attracted the interest of federal authorities early in the investigation, now running for more than five years. His claims of being a ranking kung fu grandmaster led the FBI to code-name the sweeping investigation, Operation Grandmaster.

The investigation, overseen 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.

With Priola's plea, a total of 29 defendants have been convicted in the homeowners association investigation and a related bank fraud case involving the Courthouse Cafe.

Prosecutors have alleged Benzer and late construction defects attorney Nancy Quon pulled the strings in the homeowners association scheme. Quon committed suicide in March before authorities could charge her. Attorney David Amesbury, another key player who pleaded guilty in the case, committed suicide five days after Quon.

More than $8 million was funneled through secret bank accounts to help the conspirators land lucrative legal, construction and community management contracts from the homeowners associations, prosecutors have alleged.

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

Priola admitted Monday that he "manipulated" homeowners association ballots to get straw buyers elected to the boards and then steered the boards into furthering the financial interests of the conspirators. He also admitted being a straw buyer.

And he acknowledged he will have to contribute to the $24.8 million in restitution prosecutors are seeking for the victims of the scheme.

Priola, allowed to remain free on his own recognizance, and his lawyer, John Moran Jr., declined to comment after the plea.

The trial of Benzer and his 10 co-defendants was set for March 25 before Mahan, but the government filed papers Monday to push it back because of the complex nature of the case. Prosecutors said they are turning over to defense lawyers "several million pages of documents" with "a number" of undercover audiotapes.

Both sides are at odds over when the trial should take place. Prosecutors want Mahan to try it in October, but defense lawyers want a March 2014 trial.

The longer the trial is put off, the longer the defendants who struck plea deals will have to wait to be sentenced.

The sentences all have been delayed because those defendants are cooperating with the government and many probably will testify at trial.