Contractors board enters fray

The Nevada State Contractors Board has opened an investigation into unlicensed construction at the upscale Meridian project near the Strip.

Meanwhile, the Clark County district attorney has declined to prosecute the Meridian developer for widespread building-code violations that occurred when it "upgraded" the property from apartments to luxury condos.

Frank and Amy Taddeo of Henderson, who own a unit at the Meridian, have been pounding on doors of enforcement agencies in addition to pursuing the developer in federal court.

The Taddeos are among the approximately 38 percent of Meridian owners who allege sales and mortgage fraud in a lawsuit against American Invsco and several related entities, as well as an array of lenders, appraisers and title companies.

The case has languished almost two years before U.S. District Judge Kent Dawson, who has not allowed the discovery phase to begin nor granted numerous defense motions for dismissal.

A separate construction-defect lawsuit filed by the Meridian homeowners association in Clark County District Court against Koval Flamingo LLC, an Invsco affiliate, is crawling forward.

Discontent with the lack of progress in the courts, the Taddeos went in early August to the contractors board alleging unlicensed work had occurred in their condo.

On Aug. 10, the couple received a letter from the state board, acknowledging that it will look into their allegations. The board does not comment on investigations that are under way.

The Taddeos' condo had served as a sales model when American Invsco and Koval Flamingo bought the Meridian in 2005, converted the 678 units, then sold them.

The Taddeos have never lived in their unit nor done any remodeling since they purchased it as an investment in late 2006 for $654,000.

Realty Services Inc. is named in federal court documents as Koval Flamingo's general contractor for converting the Meridian, 250 E. Flamingo Road.

But board spokesman Art Nadler says its records show Realty Services has never had a contractor's license here.

An Invsco affiliate, it also is a defendant in the federal lawsuit by more than 250 Meridian owners.

The Taddeos did not find Clark County receptive to going after the Meridian developer for misdemeanor code violations.

Building inspectors recently identified numerous problems in the couple's unit.

"The District Attorney's Office won't pursue criminal charges," Assistant County Manager Randy Tarr recently wrote the Las Vegas Review-Journal. "I sympathize with the frustrations experienced by the Taddeos."

allegations shock couple

The couple and Meridian owner Robert Vance had met with Tarr in June, hoping to spur a criminal prosecution .

At the Taddeos' Meridian condo in July, county inspectors documented substandard plumbing changes and substandard electrical rewiring that were part of the conversion, as well as a floor that became structurally overloaded when the contractor installed deluxe but weighty floor tiles.

Inspectors issued a violation notice to the homeowners association for the Taddeo unit and directed the association to submit a schedule to repair all such defects in all units.

"They're saying I'm the criminal?" Frank Taddeo said in response to the notice, which warns, "Failure to comply will result in additional enforcement action."

The Meridian's conversion took place without building permits or inspections, even though it entailed changes that went beyond cosmetic.

Their federal lawsuit claims the Meridian's condo sales program was fraudulent.

Falsified appraisals led to overpricing, according to the lawsuit.

Las Vegas lawyer Kirk Lenhard did not respond to several requests for comments on behalf of his client, American Invsco, which bills itself as the leading U.S. condo developer.

Michigan lawyer Kenneth Morgan, who represents Koval Flamingo, wrote by e-mail that, as long as a buyer and seller are both willing, "it is impossible to 'inflate' prices for property in an open market, such as the market in which the Meridian units were sold."

couple vow to get satisfaction

The Taddeos, who are retirees, obtained their unit's appraisal. They learned that A Nevada Appraisals had asserted their unit was earning $4,000 a month in rent in July 2006. In fact, it was vacant because it was being used as a model.

Rent rolls saved from the trash show similar discrepancies for other units, between actual rent and exaggerated rent figures that appear on appraisal documents.

County authorities shut down the Meridian hotel in summer 2008. The site was not zoned, licensed or insured to do short-term rentals. At that point, contractual payments to unit owners abruptly ceased, well before their two- or three-year guarantees were up.

"Nobody knew what was going on until we stopped getting our checks," Amy Taddeo said.

Since then, the Taddeos' lender, Taylor Bean & Whitaker Mortgage Corp. has filed for bankruptcy, which means the couple might lose their Meridian condo to foreclosure.

After forking over half their life's savings to invest at the Meridian, the Taddeos are furious. Amy Taddeo said she and her husband have vowed to "spend 28 hours of every 24-hour day figuring out how to get back at you -- American Invsco or whoever -- for taking my retirement money."

Contact reporter Joan Whitely at jwhitely @reviewjournal.com or 702-383-0268.