|HOA targets Quon estate amid fraud investigation|
Article Courtesy of The Las Vegas Review-Journal
By Jeff German
Published April 18, 2012
The Vistana homeowners association is going after the estate of construction defects attorney Nancy Quon, including her family and life insurance trusts worth millions of dollars, in civil litigation that stems from a scheme to take over the association's board.
The court case is one of several tied to a sweeping federal investigation into allegations of fraud and corruption at homeowners associations across the Las Vegas Valley.
Federal authorities allege that Quon, who was found dead in the bathtub of her Henderson condominium on March 20, and former construction company boss Leon Benzer pulled the strings in the massive scheme to take over nearly a dozen homeowners associations, including Vistana in southwest Las Vegas. Foul play is not suspected in Quon's death, and she was never charged in the investigation. Benzer and prosecutors have discussed striking a deal, but he remains a key target.
District Judge Mark Denton is to hold a hearing Monday on whether Vistana's new lawyers, Richard Haskin and Matthew Grode, can add Quon's estate, Benzer and a host of other key figures in the far-reaching federal investigation as defendants to an amended counterclaim that lays out the Vistana takeover scheme. The lawyers also want to add racketeering and other claims of wrongdoing to its new complaint.
Justice Department attorneys have filed 14 more plea agreements under seal in the homeowners association investigation, raising the total number of cooperating defendants now charged to 24.
In sealed court papers obtained by the Las Vegas Review-Journal, Charles La Bella and Mary Ann McCarthy of the Justice Department's Fraud Section in Washington, D.C., said they are naming the 14 new defendants in one charging document, and they want to consolidate the case with the previous 10 plea deals.
Vistana filed its original counterclaim after Benzer's company, Silver Lining Construction, sued Vistana in December 2008 to collect $750,000 for construction repairs. Silver Lining was raided early in the federal investigation in September 2008.
Quon, who had $10 million in life insurance policies, several million dollars in offshore accounts and property investments, was not named as a defendant in the original counterclaim. But she was included as one in the proposed amended complaint, which Haskin and Grode drew up about a week before her death.
Las Vegas police, who investigated an alleged suicide scheme involving Quon tied to a fire at her Rhodes Ranch home in October 2010, developed information that Quon hoped at the time that her separate $2 million and $8 million insurance polices would provide financial security to her two adult daughters after her death. The money was to be placed in an insurance trust for the daughters.
Quon, however, survived the fire, which occurred two weeks after a two-year suicide clause on the $8 million policy had lapsed. The suicide clause on the $2 million policy had lapsed earlier. Police believed Quon was trying to kill herself at the time to escape the pressure of the federal investigation.
Haskin, who took over the Vistana litigation last year as federal plea agreements in the criminal case were shedding new light on the takeover scheme at the association, said he will be looking to substitute Quon's estate for Quon as a defendant at Monday's hearing.
Vistana, which turned over records in the investigation to the FBI, didn't know the full extent of the conspiracy until after the plea deals started becoming public, Haskin said.
"The guilty pleas revealed how the pieces of the puzzle fit together," he said "We saw exactly how everybody fit into the criminal scheme."
Justice Department lawyers are alleging that Benzer, with the help of Quon and others, recruited straw buyers and installed them as board members at Vistana and other homeowners associations through rigged elections.
Once the friendly board members were in place, they were paid to look out for the financial interests of Benzer and his co-conspirators, prosecutors contend.
"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," according to the sealed court papers prosecutors filed.
Silver Lining Construction's lawyer, Sigal Chattah, said Wednesday she is not filing any opposition to Vistana's proposed amended counterclaim.
But she said she is surprised to see Vistana go after Quon's estate.
"Our lawsuit was about monies owed to Silver Lining Construction," she said. "It had nothing to do with Nancy Quon and how she handled litigation on the construction defects.
"I think, it's a bit disingenuous and in bad taste to add her estate as a defendant three years after litigation on this action has commenced."
Several defendants in the latest round of plea deals in the criminal investigation also are among those Vistana is looking to name as defendants in its civil case.
High on the list is Lisa Kim, who once ran Platinum Community Services, a homeowners association management company that also was raided 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.
Another proposed civil defendant just charged in the criminal case is Attorney Brian Jones, who worked for the now-dissolved law firm Kummer, Kaempfer, Bonner, Renshaw & Ferrario. The politically connected firm, which broke up in 2009, is also on the list of new civil defendants. Jones is alleged to have helped rig Vistana elections.
Other people who have agreed to plead guilty in the latest round of deals -- former Vistana board members Charles Hawkins, Patrick Bergsrud and ex-Las Vegas police officer Morris Mattingly -- are currently defendants in the civil litigation. So is political consultant and former board member Steve Wark, who struck a plea agreement with the government last year.
But another lawyer who has not been charged in the federal investigation, Mark Kulla, is among those Vistana wants to add as a defendant in its amended complaint. The association alleges that Kulla and his firm, Spilotro and Kulla, benefited in the scheme by being awarded construction defect legal work. Defense lawyer Bill Terry, who represents Kulla in the federal investigation, did not return a phone call. He has previously said that he doesn't comment on his cases.
Attorney Keith Gregory is also one of the new proposed defendants in the civil litigation. Gregory, who once worked for Vistana's board, has not been charged in the federal investigation. Vistana is alleging that Gregory, who did not return a phone call, failed to disclose that he had represented Silver Lining Construction.