Vegas attorney Gregory gets 10 years in prison for role in HOA fraud

Las Vegas attorney Keith Gregory was sentenced to 10 years in federal prison Wednesday for his key role in the wide-ranging scheme to take over and defraud Las Vegas-area homeowners associations.

Gregory, 61, also was ordered to serve three years of supervised release after prison and pay a share of $12.6 million in restitution.

U.S. District Judge James Mahan gave Gregory until Sept. 18 to surrender to prison authorities.

“You were the linchpin of the whole thing,” Mahan told Gregory, who had tearfully apologized. “You gave it an air of legitimacy.”

Lead Justice Department prosecutor Charles La Bella, who sought a lengthy prison term for Gregory, described the magnitude of the scheme. “This conspiracy was massive,” La Bella told Mahan. “This conspiracy standing alone constituted its own crime wave.”

La Bella said investigators uncovered as many as 100 “people of interest” in the scheme but only charged dozens in the interest of prosecutorial and judicial economy.

The long-running investigation is considered the largest public corruption case federal authorities have brought here. Since the investigation became public in 2008 with FBI-led raids, a total of 38 defendants have pleaded guilty.

Prosecutors contend the multimillion-dollar scheme was carried out between 2003 and 2009 at HOAs across the valley under the leadership of former construction company boss Leon Benzer, who pleaded guilty in January.

At the Vistana condominium development in southwest Las Vegas, Benzer swindled homeowners out of more than $7 million earmarked for construction defect work that mostly wasn’t done, prosecutors alleged.

Gregory was described by prosecutors as Benzer’s “double agent.” He was installed as Vistana’s general counsel to help a “puppet” HOA board steer a seven-figure construction defect contract to Benzer’s company. Gregory was being paid by both Benzer and Vistana during crucial contract votes in 2007.

Gregory said he has no one to blame but himself for throwing away his 32-year law career and is committed to making Vistana whole.

Gregory and three other defendants were convicted in March of conspiracy and wire fraud charges. Also sentenced Wednesday were Benzer’s half-sister Edith Gillespie, who recruited straw home buyers to the scheme; David Ball, a real estate agent Benzer placed on the Chateau Nouveau HOA board; and Salvatore Ruvolo, a Benzer-controlled HOA board member at Park Avenue and Chateau Nouveau.

Mahan sentenced Gillespie to five years in prison, three years of supervised release after prison and payment of $85,780 in restitution.

A tearful Gillespie maintained her innocence to the end, telling Mahan she was conned by Benzer.

“Unlike my brother, I never wanted to live a lavish lifestyle,” she said. “That’s not who I am. The jury got it wrong.”

Mahan ordered Ball to serve six years in prison plus three years of supervised release.

Ball, who choked up when addressing Mahan, apologized for his actions, saying, “I’m sorry that I’m here.” But he added, “I accept the jury verdict in this case. In no way do I agree with it.”

Ball said he didn’t join forces with Benzer with any criminal intent, but during the trial, a landscape company owner testified that Ball solicited a kickback from him in early 2008 when he was working at Chateau Nouveau.

Ruvolo, 86, a veteran who came to court with a walker and a service dog, was sentenced to two years in prison and three years of supervised release.

“I’m very sorry for what happened,” he told Mahan. “I just hope that you and God have mercy on me and my wife.”

Ruvolo had sought to avoid prison to care for his ailing wife of 58 years.

The four sentencings leave a handful of defendants, including Benzer, to face punishment in the high-profile case. Benzer is to be sentenced Aug. 6.

Only one defendant is left to stand trial this year.

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