Judge grants newspaper's motion to unseal HOA probe documents

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published August 16, 2015


 In a decision hailed as a victory for transparency in the courts, a federal judge Monday unsealed documents that could shed more light on the government's long-running investigation into fraud and corruption at homeowners associations.

Some three-dozen secretly filed documents were covered under the order sought by the Las Vegas Review-Journal and attorney Maggie McLetchie.

"We're pleased that the public will now have access to the majority of the substantive documents that were sealed in the case," McLetchie said. "This case gets to the heart of key public policy issues facing Southern Nevada in the biggest corruption case in our history."

McLetchie said the order by U.S. Magistrate Judge George Foley Jr. is an "important step forward for transparency" not only in the HOA case but for the courts in general.

"The press can't report on important critical proceedings like this if the documents are all kept secret," McLetchie said.

Some of the documents were filed under seal with no public notice, McLetchie said.

"There were documents we didn't even know were sealed," she said. "They were completely cloaked from public view."

Foley has promised a written decision on a second Review-Journal request to dissolve two protective orders he signed barring disclosure of massive amounts of HOA evidence, including many documents not filed with the court.

One of the orders kept secret some 6 million pages of documents, including 10,000 pages of FBI reports, federal prosecutors turned over to lawyers representing defendants preparing to stand trial. The other order withheld information from the public about a separate Justice Department investigation of alleged government leaks in the HOA case.

Former construction company boss Leon Benzer ran the HOA takeover scheme from 2003 to 2009, rigging HOA board elections in a bid to gain control of a dozen associations. The late construction defect lawyer Nancy Quon sued contractors on behalf of the boards, which in some cases attempted to use settlement proceeds to pay Benzer's company for repair work.

Quon was never charged, but while under investigation killed herself in March 2012. Benzer pleaded guilty in January, avoiding a trial that would have forced the government to make public much of the evidence in the wide-ranging scheme, which included prominent attorneys, former police officers and others. He was sentenced Thursday to 15 1/2 years in federal prison.

A total of 42 defendants either pleaded guilty or were convicted at trial in the case.

Prosecutors oppose dissolving the protective orders especially the one that covers the leak investigation, which focused on concerns that Quon was getting confidential information from the Nevada U.S. attorney's office and possibly elsewhere.

Thomas Hall, one of the Justice Department prosecutors in the HOA case, told Foley last week that the leak investigation delved into personal and romantic relationships of public officials who have not been charged criminally or disciplined administratively.

Hall said that since the allegations weren't substantiated, making public the names of the officials would embarrass them.

"Their personal lives were dealt with in a very serious way," he said.

But McLetchie argued the public has a right to know who the officials were and what they were suspected of doing.