Benzer pleads guilty in massive Las Vegas Valley HOA scheme

Former construction company boss Leon Benzer pleaded guilty Friday in the massive scheme to take over and defraud homeowners associations in the Las Vegas area.

Benzer, 48, who prosecutors say was the mastermind of the corruption scheme, entered guilty pleas to a total of 19 conspiracy, fraud and tax evasion counts in two separate federal indictments.

In his hastily prepared plea agreement with prosecutors, which came together in recent days, Benzer provides a lengthy explanation of his leadership role in the multimillion-dollar scheme.

But his agreement does not call for him to testify against the remaining defendants charged in the HOA conspiracy, which prosecutors allege occurred at 11 HOAs across the valley between 2003 and 2009.

U.S. District Judge James Mahan set an Aug. 3 sentencing date for Benzer, who is free on his own recognizance.

Prosecutors are recommending a reduction in prison time for Benzer because of his acceptance of responsibility for his crimes, but Justice Department lawyer Charles La Bella said there is no agreement on how much time behind bars Benzer should serve. That will be left to Mahan and his assessment of the federal sentencing guidelines in Benzer’s case.

Defendants to stand trial on Feb. 23 include attorney Keith Gregory, Benzer’s half-sister Edith Gillespie and bail bondsman Charles McChesney. A sixth defendant, Stephanie Markham, is being tried separately on charges of lying about her role in the scheme to the FBI and to a federal grand jury.

Benzer, who once owned Silver Lining Construction Company, and 10 others were indicted in the scheme in January 2013. He was indicted again several months later on charges of evading $1.2 million in personal and company taxes. The charges relate to more than $7 million Benzer and his company obtained through a fraudulent contract with the Vistana condominium development to do construction defect work.

Five of the 10 defendants charged in the first indictment with Benzer, including attorney Barry Levinson, previously pleaded guilty and are waiting to be sentenced.

The sweeping investigation that led to the indictments, spearheaded by the Justice Department’s Fraud Section in Washington, is thought to be the largest public corruption case federal authorities have brought in Southern Nevada. The FBI, Las Vegas police and IRS all played key roles in the long-running investigation.

In all, 36 defendants have pleaded guilty since August 2011. Most are cooperating and waiting to be sentenced after the trial.

One defendant, attorney David Amesbury, committed suicide in March 2012, days after a key target of the investigation, construction defect lawyer Nancy Quon, took her own life before being charged. Two defendants, Arnold Myers and Darryl Scott Nichols, died of natural causes after striking plea deals with the government.

Prosecutors are seeking nearly $25 million in restitution for the HOAs and lending institutions defrauded in the takeover scheme.

In his plea agreement, Benzer admitted that he developed the scheme with Quon, who loaned him $2 million to get it going.

The goal was to gain control of the HOA boards and then steer construction defect litigation contracts to Quon’s law office, the agreement said. Quon was to give Benzer 10 percent of any defect judgments she won.

Benzer also would obtain construction defect repair contracts from the corrupted HOA boards.

According to prosecutors, Benzer, Quon and others funneled more than $8 million through secret bank accounts to help them land the lucrative contracts.

Benzer in his plea agreement admits he had the scheme covered from all angles, including setting up straw buyers to infiltrate HOA communities and get elected to their boards.

Members loyal to Benzer were elected through ballot stuffing, bribery and other dirty tricks, the plea agreement said. Attorneys on Benzer’s payroll were hired to provide legal advice to the boards and to oversee the election rigging, and Benzer-friendly community management firms were put in place to run the daily affairs of the HOAs.

Prosecutors have identified 11 condominium associations as victims of the scheme: Vistana, Park Avenue, Chateau Versailles, Chateau Nouveau, Jasmine, Sunset Cliffs, Palmilla, Pebble Creek, Mission Ridge, Mission Pointe and Horizons at Seven Hills.

The conspirators gained control of half of those HOA boards and were working on the others when authorities broke up the scheme in 2008 with raids across the valley.

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