Leon Benzer, the accused mastermind of a massive scheme to take over homeowners associations in the Las Vegas Valley, told federal authorities nearly two years ago that he once consulted with Nevada Attorney General Catherine Cortez Masto about his dealings.
Benzer said Masto indicated during a “face-to face” meeting that she approved of his actions, according to a report of a 2011 debriefing authorities conducted with the former construction company boss.
“Masto advised Benzer that she did not have problems with what he was doing, to which she added he had overzealous competitors,” Las Vegas police detective Robert Whiteley wrote after the meeting with Benzer.
Whiteley and FBI Agent Mike Elliott are the lead agents in the long-running federal investigation into the takeover scheme, which occurred between 2003 and 2009.
Two pages of Whiteley’s six-page report were made public this week by defense lawyer Chris Rasmussen with court papers seeking to have his client, Benzer’s half-sister Edith Gillespie, tried separately from Benzer. Rasmussen redacted parts of the pages.
According to Whiteley’s report, Benzer told authorities that the late attorney David Amesbury, a former business partner who pleaded guilty in the scheme, introduced him to Masto. Amesbury killed himself in March 2012.
Investigators followed up on Benzer’s claim and interviewed Masto. Masto has not been accused of any wrongdoing.
On Tuesday, Masto told the Review-Journal she did meet Benzer, but not while she was attorney general. The meeting took place in 2006 while she was running for the office, and the subject of his sweeping business operation did not come up, she said.
“He did not talk to me about his scheme,” Masto said. “Had he talked to me about his scheme, I would have told him he couldn’t do it. It was illegal.”
Masto described the get-together as a campaign “meet-and-greet,” and said a campaign aide was present.
Benzer also told authorities during the debriefing that he consulted a long list of lawyers, some later targeted in the high-profile investigation, and concluded from their advice that his operation was legal.
The debriefing took place on July 21, 2011, at the FBI’s Las Vegas office. It was part of an effort to see what evidence Benzer had to offer federal prosecutors in exchange for a possible plea deal as they prepared to file the first round of criminal charges.
Those participating with Whiteley and Elliott included Charles La Bella, a Justice Department deputy chief, and Benzer’s lawyer, Daniel Albregts.
Albregts declined comment.
Plea negotiations broke down, and Benzer in January was indicted by a federal grand jury. He and 10 other defendants are to stand trial March 3. A total of 29 conspirators have been convicted since the investigation became public in September 2008 with a valley-wide raid by FBI agents and the Las Vegas police.
Prosecutors have alleged that Benzer, who once ran Silver Lining Construction Company, led the conspiracy to pack 11 homeowners association boards and to swindle HOAs out of millions of dollars.
Benzer, indicted last week on separate tax evasion charges tied to the scheme, worked closely with the late construction defects lawyer Nancy Quon, according to prosecutors.
Quon, 51, committed suicide in March 2012. She was not charged at the time.
Benzer told authorities during the debriefing that he came up with the scheme to buy condominiums and get board members elected to the associations because he felt he was not getting his fair share of construction defect repair business.
He said lawyers he consulted advised him to make sure he disclosed his interests to prospective board members.
But Benzer admitted that he “had minimal disclosure to keep it under the radar,” Whiteley said.
Benzer admitted that he withheld from state investigators that he was “purchasing the condominiums and paying the board members cash,” Whiteley wrote.
Nor did he tell his legal advisers that he was rigging elections to place conspirators on the boards, Whiteley explained.
Getting straw buyers elected to association boards was the key to the scheme, because Benzer and Quon needed votes to steer the business their way, prosecutors allege.
In the end, Whiteley wrote, Benzer insisted “the system didn’t work that well.” Some of the condominium complexes steered construction defect cases his way and others didn’t.
Benzer told authorities that the first condominiums he bankrolled for straw buyers were at Vistana in southwest Las Vegas. Vistana has been at the center of the federal investigation.
Silver Lining Construction made millions of dollars in the scheme to win a construction defect repair contract at Vistana, and Benzer has been charged with failing to pay taxes on some of that money.
In all, Benzer and Quon are accused of funneling more than $8 million through secret bank accounts to help land lucrative legal and construction contracts from the homeowners associations.
Lawyers, community management company employees, private investigators and former police officers were among those enlisted to pack association boards.
Contact reporter Jeff German at firstname.lastname@example.org or 702-380-8135. Follow @JGermanRJ on Twitter.