More plea deals expected in unlawful takeovers of HOAs

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published March 4, 2012 

Federal prosecutors are pressing ahead with a new round of plea deals in the far-reaching investigation into the unlawful takeover of Las Vegas Valley homeowners associations.

This time, prosecutors intend to name close to 20 new defendants in one charging document in federal court within the coming weeks.

Sentencings of the 10 defendants who previously have struck plea agreements to cooperate in the investigation have been delayed into the summer and beyond, as prosecutors build a foundation to obtain indictments against higher-level players in the massive conspiracy.

"The negotiations are ongoing, and we anticipate the agreements being finalized within the next several weeks," confirmed Lt. Dave Logue, who runs the Criminal Intelligence Section of the Metropolitan Police Department.

Intelligence detectives, FBI agents and IRS agents are working hand-in-hand in the investigation with prosecutors from the Justice Department's Fraud Section in Washington, D.C. The Nevada U.S. attorney's office has removed itself from the investigation because of a possible conflict of interest.

Charles La Bella, a fraud section deputy chief based in San Diego, circulated a letter last month among lawyers for the defendants, giving them a Feb. 20 deadline to participate in the group plea deal.

One of the latest offers viewed by the Las Vegas Review-Journal includes 18 defendants, mostly former homeowners association board members, straw buyers and community management employees.

The name of one lawyer is on the list, and one more attorney is said to be close to joining the group.

Several other prominent lawyers and former police officers linked to the homeowners association scheme have yet to accept deals. But negotiations are continuing, and the list of defendants could grow before prosecutors are ready to file the group plea agreement in court.

Noticeably absent from the current lists are former construction boss Leon Benzer and construction defects attorney Nancy Quon, who authorities allege pulled the strings in the takeover scheme.

Rumblings have circulated for months that prosecutors were trying to work out a plea deal for Benzer to cooperate in the investigation.

The offices of Benzer, who ran Silver Lining Construction, and Quon were among those searched in the initial September 2008 federal raid in the investigation.

Benzer's lawyer, Dan Albregts, and Quon's attorney, Thomas Pitaro, both declined to comment Thursday on the pending deals.

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.

Lawyers and judges are considered some of the bigger targets in the complicated investigation. So far, however, no judges have been charged, and only one lawyer, David Amesbury, has formally entered a guilty plea.

Amesbury is recovering from an assault in November. The assault is unsolved, but authorities don't think it is related to the homeowners association investigation.

In the proposed plea deals being circulated, prosecutors are looking to charge many of the new defendants with a single count of conspiracy to commit wire and mail fraud. Some defendants could face other charges.

Most of the previous defendants pleaded guilty to the conspiracy charge.

As in the previous plea deals, all of the new defendants are agreeing to cooperate in the investigation and pay restitution.

Prosecutors are promising to recommend lighter sentences for those participating in the group deal.

Since the end of August, when prosecutors cranked up the investigation after more than three years of sifting through evidence, five former homeowners association board members and four community management company employees have joined Amesbury in pleading guilty.

Court documents unsealed in the case have bared wrongdoing at half of the dozen homeowners associations dragged into the investigation.

Vistana and Sunset Cliffs in the southwest valley, Chateau Versailles in the northwest and Park Avenue in the south are among the associations prosecutors have identified as victims.

At some point, the Justice Department lawyers are expected to present evidence to a federal grand jury against the bigger players. That would involve hauling defendants who have struck plea deals before the panel to testify.

"The United States anticipates future pleas, indictments and the possibility of one or more trials of co-conspirators and targets," Justice Department lawyers wrote in court papers late last year.

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