Vistana HOA amends lawsuit

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published April 23, 2012  

The Vistana homeowners association filed an amended countersuit Friday adding the estates of attorneys Nancy Quon and David Amesbury as defendants in what it alleged was a massive racketeering scheme to profit from the takeover of the association's board.

Earlier this week, District Judge Mark Denton gave Vistana lawyers Richard Haskin and Matthew Grode permission to file the amended lawsuit, which also raises the new allegation that unnamed lawyers may have laundered money for the chief conspirators in the multimillion-dollar scheme.

As part of the racketeering enterprise, the conspirators engaged in the crimes of bribery, forgery, embezzlement, larceny, falsifying documents and unlawfully obtaining money and valuable property, the amended counterclaim alleges.

The court case is one of several tied to a sweeping federal investigation into allegations the conspirators rigged homeowners association elections and then paid the newly elected board members to steer legal and construction defect contracts to them and others.

Both federal authorities and the Vistana lawyers 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 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, now a taxicab driver, and prosecutors have discussed striking a deal, but he remains a key target.

Amesbury, who pleaded guilty and was cooperating in the federal investigation, was found dead by apparent hanging at his brother's property near Sacramento, Calif., on March 25.

The Vistana lawyers also added Benzer and a host of other key figures in the far-reaching federal investigation as defendants in its 80-page amended countersuit that alleges the Vistana takeover scheme occurred between 2002 and 2009.

Vistana filed its original counterclaim after Benzer's company, Silver Lining Construction, sued the condominium association in December 2008 to collect $750,000 for construction repairs. Silver Lining was raided early in the federal investigation in September 2008.

Attorney Sigal Chattah, who represents Benzer and Silver Lining Construction, called Vistana's racketeering allegations "trumped up" and said she was looking forward to "aggressively" fighting them in court.

Chattah said the allegations in the counterclaim amount to an admission that the $19.1 million construction defect settlement the homeowners association won in 2007 was based on fraud.

"This exposes the HOA to having the good faith settlement set aside, as well as having the construction defect case reopened and litigated again," Chattah said. "At the end of the day, this poses more liability for the HOA then the individuals they're suing. Conceivably, the HOA might end up having to return the $19.1 million."

But Haskin countered: "That statement either shows an utter lack of understanding of the law, or she's trying to intimidate the association and the homeowners. Our complaint alleges that there were real defects at Vistana and that made it all the more vulnerable to criminals like her client."

Haskin said the issue in the countersuit is not whether there were real defects, but rather whether those representing Vistana, its lawyers and construction companies, stole its money.

The counterclaim alleges that Quon, her law firm and other lawyers got the majority of the $19.1 million and that Silver Lining and other firms involved in the repairs did little, and often shoddy, work for the millions they received.

The Vistana court filing comes as federal prosecutors are turning up the heat in their investigation of the takeover scheme across the valley.

So far, 11 people have pleaded guilty and agreed to cooperate in the investigation, and Justice Department attorneys have filed at least 14 more plea agreements under seal, with still more coming.

In sealed court papers obtained by the Las Vegas Review-Journal, the federal prosecutors said they are naming the new defendants in one charging document and seeking to consolidate the case with the other plea deals.

Several more agreements with defendants either have been filed under seal in the new case or will be filed before May 31, when the new defendants are to plead guilty before U.S. District Judge James Mahan.

Prosecutors, with the support of defense attorneys, also have asked Mahan to unseal the new plea agreements, but Mahan has not acted on either request. He has scheduled a May 1 hearing with prosecutors and defense lawyers.

Vistana's previous lawyers chose not to name Quon, Amesbury and Benzer as defendants in the original counterclaim, which was filed before federal prosecutors began shedding light in court documents on the criminal investigation.

Quon, a wealthy high-profile construction defects lawyer had $10 million in life insurance policies, several million dollars in offshore accounts and investments.

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 the attorney 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 suspected Quon was trying to kill herself at the time to escape the pressure of the federal investigation.

In their amended counterclaim, the Vistana lawyers allege Quon and her investment companies were able to buy several properties with her share of the ill-gotten money in the Vistana takeover. Those properties include the fire-damaged Rhodes Ranch home, the Henderson condominium and another Henderson home where one of her daughters lives.

Among the new defendants named in the countersuit is Quon's sister Patricia Arnott, who the Vistana lawyers said is a trustee of Quon's family and life insurance trusts.

Amesbury, a well-known lawyer, once ran the Courthouse Cafe at the Regional Justice Center with Benzer and another target of the criminal investigation, retired Las Vegas police Lt. Ben Kim. Before Amesbury's death, the partners were involved in bitter litigation over what is left of their company, which assigned its county-approved restaurant rights to the Capriotti's national sandwich shop chain.

HOA targets Quon estate amid fraud investigation

Nancy Quon found dead in bathtub