Mass of evidence in huge HOA scheme remains under wraps

A federal judge has refused to make public the mass of evidence in the long-running investigation into the scheme to take over and defraud homeowner associations.

In a 12-page order, U.S. Magistrate Judge George Foley Jr. denied a June request by the Las Vegas Review-Journal to dissolve two protective orders keeping secret 6 million pages of documents, including 10,000 pages of FBI and other law enforcement reports.

One of the orders withholds information from the public about a secretive Justice Department investigation into alleged government leaks in the HOA case.

Former construction company boss Leon Benzer ran the HOA takeover scheme from 2003 to 2009, rigging HOA board elections in a bid to gain control of a dozen associations. The late construction defect lawyer Nancy Quon sued contractors on behalf of the boards, which in at least one case used settlement proceeds to pay Benzer’s company millions of dollars for repair work.

Quon was never charged, but while under investigation she killed herself in March 2012. Benzer pleaded guilty in January, avoiding a trial that would have forced the government to make public much of the evidence in the wide-ranging scheme, which included prominent attorneys, former police officers and others. He is serving a 15½-year federal prison term.

A total of 43 defendants either pleaded guilty or were convicted at trial in what prosecutors say is the largest public corruption case ever in Nevada.

Prosecutors opposed dissolving the two protective orders — especially the one that covers the leak investigation, which focused on concerns that Quon was getting confidential information from the Nevada U.S. attorney’s office and possibly elsewhere. The Justice Department in Washington took the reins of the HOA investigation after those allegations surfaced.

The leak investigation delved into personal and romantic relationships of public officials who have not been charged criminally or disciplined administratively, Justice Department prosecutors argued.

Foley shared the government’s concerns in his order.

“The government has made a sufficient showing that disclosure of these documents would potentially cause unfair prejudice to the individuals who were the subjects of the investigation, but to whom no charges, criminal or administrative, were ever brought,” he wrote.

Review-Journal lawyer Maggie McLetchie disagreed with Foley’s conclusion.

“It’s our view the public and the newspaper should be able to evaluate a law enforcement investigation including assessing why the government may have gone more lightly on some people,” McLetchie said. “Given the issues that there were within the U.S. attorney’s office, it’s in the public’s interest to probe what occurred.”

Foley didn’t completely bar public access to the majority of the documents covered under the main protective order.

He said defense lawyers could redact personal identifying information of witnesses and victims in the documents and then with the approval of the Justice Department provide copies of the documents to the Review-Journal.

But that could become a time-consuming endeavor for the lawyers, who would have to first identify documents requested by the newspaper, locate them from the vast electronic file and then wade through each one to black out birth dates, addresses and Social Security numbers.

Foley said the two protective orders also do not bar the newspaper from seeking to obtain the documents from the Justice Department under a Freedom of Information Act request. Such requests, however, can take the government years to complete.

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

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