HOA case pawns set stage for main event

I knew I'd seen it somewhere before.

Many years ago, I watched from the cheap seats at the Silver Slipper's seemingly endless lineup of undercard fights. Through a haze of cheap cigar smoke, I stared in amazement as one after another cross-eyed pug was knocked out by house fighters, who built lusty records with the assistance of matchmaker Mel "Red" Greb.

Mel knew how to put on an entertaining card and still protect local prospects. Mel died back in 1996, but I was reminded of the days of the Silver Slipper after learning that nearly two-dozen minor players are expected to take a plea in the grinding investigation of corruption inside local homeowners associations.

As the Review-Journal first reported, nearly 20 defendants are expected to be named in a charging document for their minor roles in the takeover of homeowners associations by a small group of major actors, who are said to have made millions litigating construction defect cases. But those major players have yet to be charged with a crime.

It's the undercard players who have been taking dives and dropping like sacks of cement in recent months. One after another, they've signed off on felony convictions and admitted their relatively small roles in much larger and quite lucrative schemes. So far, attorneys from the Justice Department's Fraud Section in Washington, D.C., have played the role of legal matchmaker to near perfection.

The strategy emerging is as compelling as it is simple: Turn a massive case that has the potential to crush jurors under the weight of a paper trail into a much clearer presentation of firsthand witnesses at the scene of the crime. Between those who already have accepted guilty pleas and have agreed to cooperate, and the next busload of minor players who are expected to do the same, you have a formidable prosecution lineup when the time comes to put the major players on trial.

Even the investigation's more eccentric elements seem to be breaking the government's way. The finalization this past week of the termination of Clark County district attorney's office veteran Victoria Villegas can reasonably be seen as a sign she also will be asked to step forward and tell what she knows about how ex-husband David Amesbury, former Metro Lt. Ben Kim and local contractor Leon Benzer secured a bank loan for their Courthouse Cafe project. Kim's ex-wife, Lisa Nicklin, has been cooperating with authorities, sources say. And Benzer, whose Silver Lining Construction received millions to make repairs at condominium developments whose homeowners association boards were stacked with straw buyers and proxy members, is considered a major target in the case.

Amesbury has been cooperating in the investigation. According to his pleading, Amesbury admitted he helped rig homeowners association elections in 2008 at the Pebble Creek and Chateau Nouveau condo complexes. He received $3,000 for acting as a straw man "monitor" of the HOA board votes.

He also swears he conspired with his Courthouse Cafe partners to defraud banks in pursuit of refinancing for the project. Amesbury and his partners received $8,000 a month from October 2008 to July 2009 to allow an as-yet-unidentified businessman run the cafe under the table, according to court documents. Villegas, sources confirm, is well aware of the details of that malodorous bank loan.

It's all about applying pressure from the bottom up with the assistance of the FBI, IRS and Metro.

And speaking of pressure, I'm told more than one local attorney remains under investigative scrutiny in connection with the case. Members of the downtown legal community, like ringside fans in an increasingly bloody bout, for months have been handicapping the odds of those attorneys getting indicted.

At the rate the undercard bums are hitting the canvas, by the time the smoke clears and the main event comes around it could be all over but the shouting.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. Email him at Smith@reviewjournal.com or call 702-383-0295. He also blogs at lvrj.com/blogs/smith.