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Greed motivated HOA defraud scheme, prosecutor says

The four defendants standing trial on charges tied to a massive scheme to defraud homeowners associations of millions of dollars did it for “greed,” a federal prosecutor told a jury Wednesday.

“This is a case about taking over HOAs in Las Vegas and getting rich doing it,” Justice Department lawyer Thomas Hall said in his opening statement. “The evidence will show that all four of these defendants lined their pockets.”

Hall said former construction company boss Leon Benzer “paired up” with the late construction defects lawyer Nancy Quon to lead the scheme, which authorities once estimated had nearly 100 co-conspirators between 2003 and 2009.

Straw buyers were recruited to obtain condominiums at targeted developments and then were elected to HOA boards through ballot stuffing and dirty tricks so they could help Quon and Benzer obtain lucrative legal and construction contracts, Hall said. Lawyers, private investigators, real estate agents and community management firms were all brought into the elaborate scheme.

Co-conspirators were secretly given cash in envelopes or even checks to participate in the conspiracy, which was designed make sure HOA boards voted Benzer’s way, Hall said.

Benzer pleaded guilty to conspiracy and fraud charges last month and is on both government and defense witness lists at the trial, which is expected to last three to five weeks in the courtroom of U. S. District Judge James Mahan.

Quon committed suicide in March 2012 and was not charged in the long-running investigation spearheaded by the FBI and Las Vegas police. Two other key targets killed themselves during the investigation, and a fourth died of a mysterious drug overdose.

A total of 37 people pleaded guilty to participating in the corruption scheme, which included as many as 11 HOAs. Many of those defendants struck deals to cooperate and testify for the government.

The four defendants standing trial, including one of Benzer’s former attorneys, Keith Gregory, all face conspiracy, wire fraud and mail fraud charges.

Joining Gregory at the defense table are Benzer’s half-sister Edith Gillespie, a ballet teacher who prosecutors say bought a condominium at Chateau Versailles with Benzer’s money; David Ball, a real estate agent whom Benzer is alleged to have gotten elected to the Chateau Nouveau HOA board; and Salvatore Ruvolo, who is accused of being a Benzer-controlled board member at Chateau Nouveau and Park Avenue.

The 87-year-old Ruvolo, who has told Mahan he has serious health issues, showed up in court with a walker and a service dog named Scooter that he says helps him deal with his physical impairments.

Defense lawyers for the four defendants told the jury that their clients were not part of the scheme and considered themselves victims.

Gillespie’s lawyer Chris Rasmussen said Gillespie was duped by her brother into thinking he was an upstanding businessman. “The easiest person to con in the world is a family member,” Rasmussen said. “This is a case about government overreaching.”

Rasmussen described Benzer as a “bad man,” who liked to throw his weight around town bragging about his political and legal connections. He also bragged that he had “judges in his pocket” and had done construction work for judges, Rasmussen said. No judges were charged in the HOA investigation, which began more than seven years ago.

Hall said the Vistana HOA board was the first to be taken over in the scheme. Eventually in 2007, the board approved a $19 million construction defect settlement, and after Quon got her millions it awarded a $7 million contract to Benzer’s Silver Lining Construction Company to do the repairs. The company, however, did little work causing the values of the properties there to decline, Hall said.

With Gregory’s help as general counsel for Vistana, Benzer’s company also got a separate $1.3 million contract at Vistana, Hall said. In return, Benzer kicked back $12,000 in two checks to Gregory.

Hall described Gregory as a “double agent” for Benzer, who was secretly on Benzer’s payroll while also being paid by Vistana’s HOA to provide them with legal advice.

Gregory’s lawyer Rodney Snow told the jury that Gregory never solicited the $12,000 from Benzer and acted above board in getting another attorney to independently review the $1.3 million contract.

Snow said the legal work Gregory did for Benzer and Silver Lining Construction amounted to only a small percentage of his business.

Ruvolo’s lawyer Bret Whipple said his client, a Korean War veteran and former football coach, spent a lifetime being a good citizen. “He’s a simple man who made the mistake of trusting some people who took advantage of him,” Whipple said.

Ball’s lawyer Michael Sanft said Ball was never a “puppet” board member for Benzer and only acted in the best interests of his condominium community.

Following opening statements, prosecutors called FBI Agent Joseph Dickey, who supervises the public corruption squad in Las Vegas, to explain how the HOA investigation took off with raids across the valley in September 2008.

Real estate agent Anthony Roy Wilson, who pleaded guilty in the scheme, testified how he helped Benzer find condominiums for straw buyers at targeted developments.

 

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