Investigators snared HOA suspect using hidden microphone, bottle of wine

Edith Gillespie marveled at the way her half-brother, former construction company boss Leon Benzer, was spreading money around town.

While sharing a bottle of wine at her home with a friend in January 2012, the dance teacher allegedly admitted — in a secretly recorded conversation set up by the FBI — that she became involved in a massive scheme to help Benzer take over homeowners associations to earn a small share of his wealth.

“And I just saw him get more and more money,” Gillespie said. “And so I’m like, well, you know ... I want a piece of that ... That’s why I did it.”

Gillespie, 51, was talking to Christine Cabingas, a Gillespie-recruited straw buyer who had agreed to cooperate in the long-running investigation into the homeowners association scheme, which occurred from 2003 to 2009. Federal authorities zeroed in on Gillespie after they turned up allegations she was a straw buyer for her brother and was recruiting other straw buyers to the scheme.

She was indicted on Jan. 15 with Benzer and nine others in the government’s final push to bring charges against a slew of conspirators, and is to stand trial on March 3, 2014. A total of 29 defendants pleaded guilty in the case before them, and most are cooperating and awaiting sentencing after the trial.

What has been revealed in federal court documents, so far, is a vast conspiracy to swindle 11 homeowners associations out of millions of dollars.

Prosecutors said that Benzer, 46, and the late construction defects lawyer Nancy Quon pulled the strings in the scheme. Quon, 51, committed suicide last March under the weight of the investigation. She was not charged at the time.

Benzer and Quon funneled more than $8 million through secret bank accounts to help them land lucrative legal and construction contracts from the home­owners associations, prosecutors said.

In late 2011, FBI Agent Mike Elliott and Las Vegas police Detective Robert Whiteley, the lead investigators in the case, sought Gillespie’s cooperation. But when she later lawyered up and refused to talk, they kept investigating her.

On the evening of Jan. 25, 2012, a year before Gillespie was indicted and after defense attorney Chris Rasmussen was appointed to represent her, Cabingas showed up on her doorstep with the bottle of wine.

Cabingas had arranged the meeting under instructions from the investigators, who provided her with a recording device.

Last month, Rasmussen included a 78-page “draft” transcript of the recorded conversation, which the FBI routinely turned over to him, in court papers asking U.S. District Judge James Mahan to suppress it as evidence against Gillespie.

Rasmussen argued the recording violated Gillespie’s constitutional rights because it was made after he became her lawyer and instructed her not to talk to investigators.

Prosecutors countered in their response that the investigators were on solid legal footing when they continued to pursue Gillespie. They argued that the real reason the defense doesn’t want the transcript used at trial is because it contains incriminating statements by Gillespie.

They cited excerpts in which Gillespie appeared envious of the money her brother was making.

“He’s got to be doing something right to having acres of tequila plants in Mexico, a private plane, a limousine, a house in Big Bear,” Gillespie said.

Gillespie told Cabingas that Benzer, who now drives a taxicab for a living, once had “more money than God” and was “extremely generous” with it. She said he paid for her daughter’s private kindergarten schooling and would hand out bottles of Dom Perignon to friends.

According to the transcript, Gillespie indicated she lived a modest lifestyle on her salary and considered herself a “victim” in the investigation because she happened to be close to the main target.

But she is alleged to have admitted in the transcript that she lied on behalf of her brother when filling out loan applications for a condominium at Chateau Versailles in 2005 and that she falsely claimed to work for Benzer’s Silver Lining Construction Co. and withheld from the mortgage company that Benzer had made the down payment.

Gillespie also told Cabingas that she received $2,000 for recruiting her as a straw buyer, the transcript shows.

“That’s all I made out of it, $2,000, and we declared it on our taxes,” she said.

Gillespie said she viewed her involvement as a “business opportunity” and was assured by her brother that it was “perfectly fine.”

Benzer’s lawyer, Daniel Albregts, declined comment.

Early in the conversation, Gillespie said investigators were trying to get her to talk about what they said was a mob connection to the scheme.

“They’re saying that I know about, that I’m connected to the mob,” she said. “That we’re, we’re, this goes back to the mob in Buffalo. I’m a freaking dance teacher. Are you kidding me?”

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Follow @JGermanRJ on Twitter.