Sentencings are beginning of the end in Vegas HOA scandal

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published May 13, 2015


 Longtime political strategist Steve Wark has been waiting more than 3½ years to be sentenced in the massive scheme to take over and defraud Las Vegas-area homeowners associations.

On Monday the former Nevada Republican Party chairman and four other defendants who pleaded guilty to a felony charge of conspiracy to commit wire and mail fraud in late 2011 will finally hear their fate in federal court.

They are among more than two dozen cooperating defendants who will be sentenced in the next two weeks in the largest public corruption case ever brought by federal authorities in Southern Nevada. In all, 38 people have pleaded guilty in the multimillion-dollar scheme, which involved as many as 11 HOAs between 2003 and 2009, according to federal prosecutors.

The long-running investigation, spearheaded by the Justice Department’s fraud section in Washington, became public in September 2008 with FBI-led raids across the valley.

The sentencings of Wark and others this week were put on hold after the January 2013 federal indictment of the scheme’s mastermind, former construction company boss Leon Benzer, and 10 others. The plea deals of the cooperating defendants called for them to testify for the government at the trial, so they couldn’t be sentenced until all of the cases were settled.

Benzer and six co-defendants ended up pleading guilty. Only four defendants, including one of his former lawyers, Keith Gregory, went to trial, with all convicted on conspiracy and wire fraud charges in March. They are to be sentenced in June.

Attorneys, former police officers, HOA community managers and private investigators who played roles in the elaborate scheme are among the defendants preparing to receive punishment in the case over the next two weeks.

More defendants, including Benzer and his right-hand man, Ralph Priola, are to be sentenced this summer. Benzer is likely to be slapped with a large share of the $25 million in restitution prosecutors are seeking.

Three defendants who pleaded guilty and agreed to cooperate died before they could be sentenced. Attorney David Amesbury hanged himself, and Darryl Scott Nichols and Arnold Myers, both HOA board members paid by Benzer, died of natural causes.

Three other deaths have been linked to the investigation. Construction defects attorney Nancy Quon, who prosecutors alleged helped bankroll the takeover conspiracy, committed suicide in March 2012. Former Las Vegas police officer Christopher Van Cleef, a Benzer-friendly board member, shot himself to death days after the FBI raid in 2008, and Robbi Castro, another board member close to Benzer, died of a drug overdose in 2010. All three were not charged in the case.

In a sentencing memorandum in Wark’s case last week, prosecutors summarized the sweeping scheme, which fell apart after the raid.

“Benzer directed the purchase of condominiums at targeted HOAs through a network of straw buyers and systematically took control of several HOA boards through a pattern of fraud and deceit, including the rigging of HOA board elections,” prosecutors wrote.

The goal was to funnel lucrative construction defect repair contracts to Benzer.

At Vistana in southwest Las Vegas, where the scheme was carried out to its fullest, Benzer and his Silver Lining Construction Company swindled homeowners out of $7 million earmarked for construction defect work that was never done, according to prosecutors.

As Vistana’s HOA president, Wark played a critical role in steering money to Benzer during a September 2007 meeting he orchestrated at Benzer’s request.

Wark, the first of the wave of defendants to plead guilty, laid it all out on the witness stand during Gregory’s trial, earning himself a lighter sentence. In court papers, prosecutors seek a prison term of 8 to 14 months for Wark, with three years of supervised release after prison but no payment of restitution. Probation officers recommended as much as 21 months behind bars.

Citing Wark’s remorse and extensive cooperation with prosecutors, defense lawyer Angela Dows in court papers asks for only five years of supervised release.

Dows said Wark met with prosecutors a dozen times for more than 26 hours over the past five years.

The stress of the case has taken a toll on Wark, Dows wrote. In 2013 he was hospitalized with “heart issues,” and last year he went through a divorce with his wife of 10 years.

Prosecutors later in the week plan to ask for leniency for Benzer’s former girlfriend, Marcella Triana, who also was quick to assist the government.

Triana, who worked at Silver Lining Construction and was a straw buyer and “puppet” board member at Chateau Versailles, held a “privileged position near the top of the pyramid-shaped conspiracy” and fulfilled her end of the plea deal by testifying at the trial. She consistently provided the government with valuable information during the investigation, prosecutors wrote in a sentencing memorandum. Much of her cooperating came while still in a relationship with Benzer.

Prosecutors seek one year behind bars, three years of supervised release after prison and no restitution for Triana.

Her lawyer, Todd Leventhal, argues for probation. In court papers he said Triana “incurred a significant risk of danger as a result of her assistance” in the HOA investigation, and that her cooperation in related cases will be brought up at her sentencing Wednesday. He did not detail the related cases.

Deborah Genato, a community management company employee who testified at the trial, is also getting a break from prosecutors, who plan to suggest up to 6 months in prison. As part of her plea deal, Genato agreed to pay $30,000 in restitution to homeowners associations.

Benzer’s cousin, Edward Lugo, who pleaded guilty in October 2011, might not get off so lightly.

Lugo, who lives in Southern California, was a Benzer-controlled HOA board member at Park Avenue and paid the bills of recruited straw buyers. Prosecutors are seeking a reduced sentence in light of his help, but still want 27 to 33 months in prison.

They said in court papers they think Lugo “forgot” certain key facts during his trial testimony, possibly to protect his cousin, Benzer’s half-sister Edith Gillespie.