Prosecutors: News stories not enough to move HOA trial

Justice Department lawyers say the large amount of publicity surrounding the FBI-led investigation into fraud and corruption at homeowners associations is not enough to move the February trial out of Las Vegas.

In court papers filed last week, prosecutors argued that the mass of newspaper stories, primarily from the Las Vegas Review-Journal, were objective and not prejudicial to the defendants, as their lawyers claimed in earlier motions for a change of venue.

The Review-Journal’s circulation covers only a small portion of the more than 2 million residents in the Las Vegas Valley and the majority of its stories will have been published long before the trial, the prosecutors wrote.

Publicity also was far less than other high-profile cases that didn’t change venues, such as the 1993 World Trade Center bombing, the 2013 Boston Marathon bombing and the massive Enron Corp. fraud case, prosecutors said.

The simple solution to ensure that the defendants get a fair trial is to question potential jurors individually about their exposure to the media and whether they could reach a verdict based only on the evidence they hear at trial, the prosecutors said.

“It is pure hyperbole to suggest that there are not 16 people (12 jurors and four alternates) in all of Clark County who are capable of rendering a verdict based on the evidence that will be presented in court,” prosecutors said.

In court papers filed last week, defense lawyers again attacked the Review-Journal’s coverage of the high-profile HOA case, saying it has “utterly corrupted” the trial atmosphere.

“Frankly, the articles placed before this court speak for themselves,” the lawyers wrote. “No matter how the government tries to minimize the overwhelming weight of pretrial prejudice the articles depict, the fact of the matter is that there is no practical way these remaining defendants can get a fair trial in Las Vegas, Nev.”

Prosecutors said they had nothing to do with what the defense says was the most damaging Review-Journal report — an Oct. 30 article revealing details of failed plea negotiations between the government and Leon Benzer, the lead defendant in the case.

Benzer’s lawyer, Daniel Albregts, went to court to try to stop publication of the story, but the newspaper ran it online before a judge could consider restraining publication.

The article, which contained information Benzer provided investigators during secret talks, was based on government reports the newspaper obtained while the reports were briefly in the public domain.

The 2011 investigative reports have since been sealed and stricken from the court record. They disclose how Benzer, a former construction company boss, allegedly corrupted HOA boards through bribery and election rigging to obtain millions of dollars in construction defect contracts.

In separate court papers last week, prosecutors urged a federal judge to deny a defense bid to dismiss the case because of government misconduct the defense claims led the Review-Journal to acquire the documents.

“Defendant Benzer’s suggestion that the United States violated any ethical rule is unfounded and insulting,” prosecutors wrote. “The United States has consistently declined to make any extrajudicial comment to the media in this case, and for defendant Benzer to suggest that the United States somehow covertly caused the publication of the Benzer proffers is patently false.”

U.S. Magistrate Judge George Foley Jr. has set a Dec. 15 hearing on the defense request to move the trial out of Las Vegas. Two defendants also want to be tried separately.

Benzer and five other defendants, including his former lawyer, Keith Gregory, face a February trial on conspiracy and fraud charges in the courtroom of U.S. District Judge James Mahan. The charges stem from a long-running investigation launched by the FBI, Internal Revenue Service and Las Vegas police in 2007.

Prosecutors said moving the trial, which could last six weeks, would be a costly and “logistical nightmare” for the government and its more than three dozen witnesses, most of whom live in Las Vegas.

A move also would likely lead to another trial delay and deny the HOA victims an opportunity to observe the case in Las Vegas, prosecutors said.

Since 2011, 36 defendants have pleaded guilty in the scheme to take over a dozen HOAs across the valley from 2003 to 2009.

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