Las Vegas HOA sentences could be based on $60M in losses

More than $60 million in actual and intended losses are being attributed to the massive scheme to take over and defraud homeowners associations in Las Vegas, according to the lead federal prosecutor in the case.

Charles La Bella, a deputy chief in the Justice Department’s Fraud Section, cited the figure on Friday during an appearance before U.S. District Judge James Mahan.

La Bella said the $60-plus million in losses were calculated by federal probation officers in their pre-sentence reports on the four defendants convicted at trial in March.

Mahan is to sentence attorney Keith Gregory and the other three defendants — Edith Gillespie, David Ball and Salvatore Ruvolo — on June 17. They all were found guilty of conspiracy and wire fraud charges.

Over the past two weeks, more than two-dozen defendants who pleaded guilty were sentenced by Mahan and other judges and most received light prison terms or no time behind bars at all because of their cooperation in the long-running investigation.

The harshest sentence handed out was 21 months in prison.

The sentences for those convicted at trial will hinge on the losses in the scheme, and if Mahan bases punishment on the $60 million figure, Gregory and company will be facing years in prison.

La Bella said he expects defense lawyers to challenge the figure, and he informed Mahan he will be asking for a hearing to determine a final loss amount for the upcoming sentencings.

A flurry of court papers related to the sentencings are expected to be filed this week by both sides.

The actual losses in the takeover scheme stem from several million dollars in phony mortgages taken out by straw buyers and more than $10 million in construction defect contracts and legal fees fraudulently obtained from the Vistana HOA, which was controlled by former construction company boss Leon Benzer, the scheme’s central figure.

Benzer was eyeing additional lucrative contracts for repair work at a half-dozen other HOAs that had won construction defect settlements before the scheme was broken up by the FBI and Las Vegas police in September 2008.

Those intended losses are part of the $60 million figure cited in the pre-sentence reports.

Benzer, who ran Silver Lining Construction, targeted roughly a dozen HOAs between 2003 and 2009 in what turned out to be the largest case of public corruption federal authorities have ever brought in Southern Nevada.

At one point, investigators had identified nearly 100 conspirators, including lawyers, former cops and one prominent political strategist.

In January, Benzer pleaded guilty to conspiracy and fraud charges without a cooperation agreement. He also is facing years in prison at his August sentencing before Mahan.

According to prosecutors, Benzer recruited straw buyers to obtain condominiums at roughly a dozen developments and some were elected to HOA boards through ballot-box stuffing and dirty tricks.

Other conspirators were deeded interests in condominiums so they could get on boards through rigged elections.

In all, 38 defendants have pleaded guilty in the sprawling scheme over the past four years.

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