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Prosecutors drop fraud charges against former 311 Boyz member

Updated June 7, 2024 - 11:04 am

Prosecutors have dropped a slew of felony charges against a former member of a notorious Las Vegas gang who was accused of orchestrating a mortgage scam, closing a case that has stretched on for more than three years.

Steven Gazlay, 39, was indicted in February 2021 on charges of mortgage lending fraud, coercion, theft, conspiracy to commit theft, forgery, conspiracy to commit forgery, and obtaining and using the personal identifying information of another, after prosecutors claimed he defrauded a hard-money lender.

Court records show that prosecutors in May dropped the case against Gazlay and his co-defendants — his girlfriend, Dana Nee, and his mother, Jeannette Gazlay Arnone.

Michael McAvoyamaya, one of Gazlay’s attorneys, said the charges were dropped after the Clark County district attorney’s office failed to provide evidence that would have helped Gazlay’s defense.

Court records show that Chief Deputy District Attorney Colleen Baharav dismissed the case on May 22, when attorneys were set to meet for a status check on an upcoming evidentiary hearing.

A clerk wrote in the court minutes that “the State no longer believes it can prove this case,” and that prosecutors were “dismissing the case in the interest of justice.”

Baharav and Clark County District Attorney Steve Wolfson did not respond to a request for comment.

Gazlay told the Las Vegas Review-Journal that he believes the prosecution was biased against him because of his criminal history. He has eight felony convictions and was released from prison in 2019. Gazlay made headlines in 2003 as a member of the 311 Boyz, a Las Vegas Valley gang that committed a string of violent acts culminating in the maiming of a teen with a rock.

He has maintained that he was not part of a mortgage scam.

“There’s no doubt I was targeted from the outset,” he said.

Attorney Brent Bryson, who represented Jeannette Gazlay Arnone, told the Review-Journal that the case contained “pretty serious missteps” regarding documentation and testimony from investigators. He said there was not sufficient evidence to show that Gazlay Arnone was involved in a fraud.

“She’s relieved, and she’s obviously happy that this giant weight has been removed,” Bryson said.

Nee’s attorney did not respond to a request for comment.

Prosecutors accused Gazlay of using identity theft and false documents to persuade a lender to issue a $707,375 home equity loan to him on a property that he did not own.

But as the case progressed, McAvoyamaya said that prosecutors and the police failed to turn over documents that could have been used as evidence. McAvoyamaya said that other documents were destroyed by investigators.

“Throughout this case there have been extensive disputes over what evidence was provided to the State, and whether the State met its duty to provide that evidence to Steven Gazlay,” attorneys wrote in a motion to dismiss the indictment, filed in January.

McAvoyamaya said that authorities also investigated developer Riyan Sharan in connection with the mortgage scheme, but investigators did not disclose that during testimony in the case.

Sharan is listed as a victim in the case in the criminal indictment.

In December 2021, Gazlay filed a lawsuit against Sharan alleging that Sharan sold him a home and the esport company DarkZero’s assets for $1.8 million. He also accused Sharan of causing another deed to be executed selling the home only to DarkZero.

Prosecutors have alleged that Gazlay falsified documents to obtain a loan against the home owned by DarkZero. An arrest warrant accused Gazlay of using a family member to notarize and backdate documents to falsely authenticate them.

Gazlay said that the loan obtained against the house was not for personal use, but was obtained through a business entity.

In the lawsuit, Gazlay accused Sharan of filing a false police report that “alleges Gazlay has no lawful ownership interest in the Property,” the lawsuit said.

In a response to the lawsuit, Sharan’s attorneys denied that Sharan conspired against Gazlay, and argued that Sharan did not wrongfully take any property belonging to Gazlay, court documents show. Sharan’s attorney did not respond to a request for comment.

McAvoyamaya said he intended to argue during the criminal trial that Gazlay was actually a victim of the fraud.

“None of that is proven because we never went to trial on it,” McAvoyamaya told the Review-Journal.

McAvoyamaya said now that the case is dismissed, he intends to seek attorney’s fees and a ruling from a judge that authorities acted in bad faith when prosecuting Gazlay.

Gazlay is still facing criminal charges in a separate case, where he is accused of a gross misdemeanor count of escaping from electronic supervision. Prosecutors alleged that he left Clark County without permission while he was on electronic supervision in the now dismissed mortgage fraud case, court records show.

District Judge Erika Ballou denied a motion on Wednesday to remove Gazlay from house arrest. Deputy District Attorney Austin Beaumont argued that “for quite some time, Gazlay has been quite a threat to this community.”

“He does still have that long criminal history, he is out of custody, we do still have a trial date in this case,” the judge said.

McAvoyamaya said that the gross misdemeanor charge stems from when Gazlay was released from custody in the mortgage case. McAvoyamaya argued in court filings that police released Gazlay “without any formal release procedure,” and that Gazlay was not aware of a summons to appear in court at a later date.

As part of the alleged mortgage fraud case, the Metropolitan Police Department moved to seize more than $535,000 from Gazlay’s bank accounts. The company that Gazlay obtained the home equity loan from then claimed an interest in the seized funds. District Judge Veronica Barishich entered a judgment in favor of Metro, forfeiting the funds in Gazlay’s account and allowing Metro to release the funds to the home equity company as a form of restitution, McAvoyamaya wrote in court documents.

The case is currently in front of the Nevada Supreme Court, where McAvoyamaya argued that the judge should have stayed the forfeiture proceedings until the resolution of the criminal case.

“Neither the LVMPD nor Equity Title presented any evidence, let alone clear and convincing evidence, that the funds in the accounts seized by the LVMPD were proceeds of the alleged criminal offense,” McAvoyamaya wrote in a petition filed with the high court.

The Supreme Court has yet to rule. Prosecutors filed a motion last month arguing that the case is now moot, and should be dismissed, because the criminal charges against Gazlay were dropped.

Contact Katelyn Newberg at knewberg@reviewjournal.com or 702-382-0240.

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