High court rejects former governor son’s delay request

CARSON CITY - The Supreme Court unanimously rejected a request by Jeff Guinn, son of former Gov. Kenny Guinn, to delay a required deposition in a civil case until the FBI finishes its criminal investigation into whether he defrauded real estate clients.

Guinn's lawyers had contended depositions by him and his Aspen Financial Services associates could be funneled to the FBI and a grand jury considering criminal charges in the case that involves more than $1 million, potentially violating their Fifth Amendment right against self-incrimination.

But in the 7-0 decision, Justice Nancy Saitta said Thursday, "It is possible for both matters to proceed concurrently."

The civil case was brought by Las Vegas residents Kenneth and Yvonne Gragson and dozens of other investors in a condominium project in Las Vegas. Kenneth Gragson is the son of former Las Vegas Mayor Oran Gragson, who died in 2002. Jeff Guinn's father was governor from 1999 to 2007. He died after a fall from the roof on his home in 2010.

A loan provided by Gragson and others went into default in 2009. Aspen and Guinn, according to the court, "attributed these losses to the general decline in the Las Vegas real estate market," but the investors "believed the Aspen defendants had defrauded them by operating, in essence, a real estate Ponzi scheme."

The FBI launched a criminal investigation at Gragson's request.

The Aspen associates have been served grand jury subpoenas seeking information about the condo loan and other activities.

In the decision Thursday, the court acknowledged past civil cases that were put on hold until a criminal matter is concluded but said the rule is that a stay in taking a civil deposition "should only be granted after a party seeking it has been indicted."

"The delay caused by a stay would greatly prejudice the Gragson plaintiffs' ability to present an effective case in view of the complex nature of their claims," the Supreme Court added.

Justices noted many of the plaintiffs are elderly and a stay could prevent them from testifying, and that "there is no way to intelligently predict how long the (FBI) investigation may last, much less whether it will in fact culminate in a criminal prosecution."

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.