Whistleblower details HOA corruption in federal court

Wanda Murray was one of the original whistleblowers who exposed corruption at the Vistana homeowners association a decade ago.

On Monday, she got to tell a slice of her story in federal court for the first time, as U.S. District Judge James Mahan held a hearing to determine the extent of the losses in the scheme to take over and defraud HOAs across the valley.

Murray, 69, who no longer lives at Vistana, described how those who unlawfully gained control of Vistana through the leadership of former construction company boss Leon Benzer harassed and intimidated her group of condominium owners after it had become wise to the takeover.

She cited the example of an elderly member of the group who decided to trim some trees around his building without HOA permission. The Benzer crowd had the man, in his 70s at the time, arrested and paraded through the complex on a golf cart to the HOA office before being transported to jail, Murray said.

Benzer cronies armed with handguns appeared at chaotic, Benzer-controlled HOA meetings that gave residents little chance to speak out on big decisions involving construction defect work, Murray said.

After Benzer obtained a $7.2 million contract to do defect repair work, little was actually done, ruining the value of the condominiums, she said.

“We were left with nothing,” Murray said. “It hurt us bad.”

Murray, a former Vistana board member, was one of a handful of witnesses called by prosecutors to help lay out the millions of dollars in losses caused by the scheme at Vistana and other targeted HOAs.

The lengths of sentences of key defendants hinge on how much money homeowners and other victims lost in the scheme, which prosecutors alleged occurred between 2003 and 2009. Benzer, who pleaded guilty, is to be sentenced Aug. 6. One of his former attorneys, Keith Gregory, is among four defendants convicted at trial who are to be sentenced on Wednesday.

Justice Department lawyers wanted to apply a figure of more than $60 million in actual and intended losses to the sentences.

They calculated nearly $15 million in actual losses — mostly at the Vistana, where Benzer and his co-conspirators stole more than $12.5 million from a construction-defect settlement.

The intended losses included $45.5 million in eventual construction-defect settlements obtained at a half-dozen HOA boards Benzer had taken over or was about to take over.

Benzer recruited straw buyers at the condominium developments and rigged elections to place them on the HOA boards so they could steer the lucrative construction repair work his way, prosecutors alleged. He also put community management companies and lawyers in place to watch the boards.

At the start of Monday’s hearing, Mahan informed prosecutors he wasn’t inclined to figure the intended losses into the sentences.

But Charles La Bella, the lead Justice Department prosecutor, urged him to at least include $29 million in ultimate settlements at Park Avenue, Chateau Nouveau, and Chateau Versailles, where Benzer and his co-conspirators were a “breath away” from cashing in before the FBI and Las Vegas police broke up the scheme in September 2008.

Under questioning from La Bella, one of the lead investigators, Sgt. Robert Whiteley, explained how close Benzer and company had come to landing lucrative construction defect contracts at the three condominium developments.

Mahan did not indicate where he was leaning at the close of the hearing.

Allen Baxter, a consultant hired to document the construction work, testified that he complained several times to Vistana that repairs, including “life-saving” work to prevent the spread of fire between condominium units, wasn’t being properly done.

Eventually, Baxter said, he was let go.

Baxter estimated that Benzer’s Silver Lining Construction Company performed only about $1.5 million of the $7.2 million worth of repairs.

Anthony Cicchetti, the owner of Professional Roofing Services, testified that his company did about $143,000 in repairs as a subcontractor for Benzer.

But La Bella showed him invoices to Vistana that Benzer submitted indicating his company had done work totaling $882,000.

Prosecutors have alleged Benzer diverted most of the money earmarked for construction defect repairs at Vistana to himself or to keep the scheme afloat.

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