Class-action lawsuit filed in valley HOA scheme

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published March 11, 2012 

A class-action lawsuit has been filed in District Court against key players in the scheme to take over Las Vegas Valley homeowners associations.

The lawsuit, filed by attorneys Matthew Callister and Mitchell Bisson, mirrors allegations leveled in the Justice Department's criminal investigation into the massive scheme.

Named as defendants are two of the main targets in the criminal investigation, construction defects lawyer Nancy Quon and former construction boss, Leon Benzer.

Also named are nine of the 10 defendants who have pleaded guilty and are cooperating in the federal investigation, as well as a community management company and eight homeowners associations. Two of the more notable defendants in the criminal investigation, political consultant Steve Wark and attorney David Amesbury, are among those being sued.

The lawsuit comes at a sensitive time for federal prosecutors who are putting the finishing touches on a new round of plea deals in the far-reaching criminal investigation into fraud and corruption at homeowners associations.

The Las Vegas Review-Journal reported March 2 that Justice Department lawyers from Washington intend to name close to 20 new defendants in one charging document in federal court within the coming weeks. Prosecutors are building a foundation to obtain indictments against higher-level players, including Quon and Benzer, in the massive conspiracy.

A list viewed by the Review-Journal of those agreeing to plead guilty includes a lawyer, former homeowners association board members, straw buyers and community management employees.

Negotiations are continuing and the list of defendants could grow before prosecutors are ready to file the group plea agreement in court.

Prosecutors have alleged that the scheme involved stacking homeowners association boards with friendly members who would hand out legal work and construction defect contracts at the expense of the associations and their homeowners.

The co-conspirators would find "straw purchasers" to buy condominiums at various developments and get them to run for seats on the boards. The straw buyers would be elected through classic dirty campaign tactics that included forging ballots and digging up dirt on candidates not supported by the co-conspirators.

The lawsuit alleges that the defendants "conspired to enrich themselves by fraudulently slandering various class members to win HOA board elections and then further conspiring to vote in favor of litigating various construction defect lawsuits.

"Once the lawsuits were brought, defendants conspired to pay construction contractors to make superficial repairs that did not address the real underlying defects in the buildings," the suit alleges.

Fraudulent construction defect suits were filed at the eight homeowners associations named as defendants in the suit -- Vistana, Park Avenue, Chateau Versailles, Chateau Nouveau, Sunset Cliffs, Palmilla, Terrasini and Pebble Creek.

Because of the conspiracy, property values at those developments have diminished, causing "substantial emotional distress" to condominium owners, the suit alleges.

So far, the suit lists only two plaintiffs -- Kimberly Karol, who owns a condominium at Vistana, and Louise Mumby, a condominium owner at Chateau Nouveau.

More plaintiffs and defendants, however, are likely to be added to the suit.


Businesswoman targets Quon, others in HOA case

Ex-HOA board member is ninth to get plea deal

Attorney pleads guilty for role in HOA fraud

Former property manager pleads guilty in HOA investigation

Sixth defendant pleads guilty in HOA scheme

Woman is fifth to plead guilty in federal HOA probe

Fourth person pleads guilty in HOA fraud probe

Third person pleads guilty in HOA fraud probe

Second defendant pleads guilty in HOA case

HOA fraud cases may be merged

Las Vegas businessman enters guilty plea in federal HOA fraud case