Federal judge refuses to dismiss Las Vegas HOA case

A federal judge Thursday recommended denying a defense motion to dismiss charges against key defendants in the homeowners association fraud case because of government misconduct.

The eight-page decision by U.S. Magistrate Judge George Foley Jr. paves the way for former construction company boss Leon Benzer, attorney Keith Gregory and four other defendants to stand trial on fraud and conspiracy charges Feb. 23 in the scheme to unlawfully take over 11 HOAs around the valley.

Defense lawyers for Benzer and Gregory can ask U.S. District Judge James Mahan, who will preside over the expected two-month trial, to reject Foley’s recommendation.

The lawyers contended prosecutors committed misconduct that allowed the Las Vegas Review-Journal to publish an Oct. 30 article revealing details of failed plea negotiations between prosecutors and Benzer.

The article, which contained information Benzer provided investigators during secret talks in 2011, was based on government reports the newspaper obtained from the electronic court docket while they were public for two days in September.

The investigative reports have since been sealed and stricken from the court record. The reports describe how Benzer corrupted HOA boards through bribery and election rigging to obtain millions of dollars in construction defect contracts.

In his decision Thursday, Foley said he found no government misconduct that rose to the level of dismissing the case.

He also went to the unusual step of taking part of the blame for how Benzer’s secret deal became public.

Foley said he should not have unsealed the reports without allowing Benzer’s lead lawyer, Daniel Albregts, a chance to address the issue. He said he also should have given Gregory’s attorneys, who filed the reports under seal, a chance to withdraw them.

Prosecutors had opposed the effort by Gregory’s lawyers to file the FBI and police reports under seal.

Defense lawyers suggested in court papers that the Review-Journal got the reports from prosecutors, an allegation denied by both the prosecutors and Review-Journal.

Albregts filed a motion under seal seeking a subpoena for the Review-Journal’s court billing records in an effort to support the unsubstantiated defense claim.

But Review-Journal lawyer Maggie McLetchie responded with a court filing putting Albregts on notice the newspaper would move to quash a subpoena for records. Foley then denied Albregts’ secret request.

Last month, Foley denied a defense request to move the trial out of Las Vegas because of what the lawyers said was prejudicial news coverage by the Review-Journal that made it impossible for Benzer and Gregory to get a fair trial.

Foley ruled the newspaper’s stories were “factual in nature” and not inflammatory, as the defense argued. Any potential jurors influenced by the news coverage could be weeded out during the selection process at trial, Foley said.

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

SOURCE: http://www.reviewjournal.com/news/las-vegas/federal-judge-refuses-dismiss-hoa-case

Target of Las Vegas HOA investigation detailed scheme, bribes in secret documents

In the summer of 2011, Justice Department lawyers were wheeling and dealing behind closed doors with dozens of targets in the long-running investigation of a scheme to take over homeowners associations in the Las Vegas Valley.

One of those who flirted with taking a deal was former construction company boss Leon Benzer, the man prosecutors call the mastermind of the biggest public corruption case in Nevada history, according to sealed investigative reports obtained by the Las Vegas Review-Journal.

As the high-profile case heated up, Benzer and his defense lawyer, Daniel Albregts, secretly met four times with prosecutors and investigators at the FBI’s local office over three months. But no plea agreement was made. Benzer was indicted by a federal grand jury.

But during those wide-ranging discussions, Benzer detailed how he corrupted HOA boards through bribery and election rigging to obtain millions of dollars in construction defect contracts, the reports show.

The scheme was hatched because Benzer felt competing construction companies were using their connections to make it difficult for his company to break into the defect repair business, according to the reports.

He told investigators that the scheme, which ran from 2003 to 2009, was aided by a $1.5 million loan from construction defect lawyer Nancy Quon to purchase condos for straw buyers to be elected to HOA boards.

Benzer, 47, admitted he gave his personal lawyer, Keith Gregory, a $10,000 bribe for work on the HOA takeover at the Vistana condominium complex in southwest Las Vegas. Gregory is also under indictment.

Benzer recalled paying Gregory from his personal account “as a ‘thank you’ for ‘working with us.’ ”

“When questioned as to exactly what he meant by thank you and whether the payment was more accurately described as a bribe payment, Benzer advised that the term bribe was ‘your language’ and he didn’t like to use that term, but that the answer was ‘basically yes,’ ” reads one report.

In another report, Benzer was quoted as saying a “thank you is almost a Christmas present without it being Christmas.” He said he often handed out “thank yous” to people who did things for him.

Albregts declined comment for this article. Gregory’s Utah lawyer, Rodney Snow, said Gregory “categorically” denies taking a bribe from Benzer.

“There were no discussions between Gregory and Benzer about that,” Snow said. “The fact that he was paid with a check suggests it was not intended as a bribe.”

Investigators pressed Benzer on whether he knew of “information leaks” in the criminal case and whether he knew he was under investigation in 2007 and 2008.

At the time, the Justice Department’s Public Integrity Section in Washington was probing allegations that Quon had information from the local U.S. attorney’s office that could compromise the HOA investigation. The Justice Department’s Fraud Section in Washington also had taken control of the HOA investigation after the U.S. attorney’s office removed itself amid talk of leaks from the office.

“Benzer was asked if he was warned about being under investigation,” an investigative report said. “According to Benzer, multiple people came and told him. … Benzer stated Quon had told him that the AG was investigating him. Benzer said he thought the U.S. attorney and AG were all the same entity.”

At one point, Benzer said, Quon told him he was an “idiot” for not destroying his emails and files.

By the end of August 2011, on the same day longtime political strategist and former Benzer business partner Steve Wark became the first conspirator to plead guilty in the HOA takeover scheme, the Justice Department said it had completed the leak investigation and no action was needed.

Defense lawyers have been allowed to see reports from the leak investigation for trial preparation, but are under court order not to talk to the media about them.

Investigators in 2011 also asked Benzer about possible mob involvement in the HOA takeover scheme.

In one interview, Benzer said he was friends with Joseph A. Bravo, a Las Vegas ticket broker who received an 87-month federal prison term in 1993 for his role in a cocaine trafficking ring with alleged ties to the Buffalo mob.

Benzer said he met Bravo through lawyer John V. Spilotro, the nephew of Anthony “The Ant” Spilotro, the Chicago mob’s infamous overseer of street rackets in Las Vegas until his murder in 1986.

Bravo’s nephew, real estate agent Anthony R. Wilson, pleaded guilty in the HOA investigation. So did limousine driver Paul Citelli, who was convicted with Bravo in the 1993 cocaine case.

Benzer told investigators that he didn’t believe Bravo had mob ties, but admitted that Bravo had loaned him as much as $20,000 and turned him on to hard money lenders as the scheme progressed.

Before sitting down with Benzer, Justice Department lawyers agreed not to use anything he said against him at trial if the negotiations fell through. But they were free to corroborate the wealth of information they got from Benzer with other witnesses.

The debriefing reports were originally filed under seal in a bid by Gregory to be tried separately from Benzer. U.S. Magistrate Judge George Foley Jr. briefly unsealed the reports in September after prosecutors did not object to making them public, but resealed them and had them stricken from the court record at the request of Gregory’s lawyers. The Review-Journal obtained the documents while they were public.

Talks between Benzer and the government broke down in September 2011. Over the next year, prosecutors struck plea deals with a slew of co-conspirators. Benzer, Gregory and nine other defendants were indicted in January 2013 on federal conspiracy and fraud charges, and since then five of the co-defendants have pleaded guilty and agreed to testify for prosecutors at the February trial.

Since August 2011, 36 co-conspirators have pleaded guilty in the takeover scheme. One of the cooperating defendants, lawyer David Amesbury, committed suicide in March 2012, five days after Quon took her life. At the time, Quon was not charged in the case. Another defendant who struck a deal, Arnold Myers, died of cancer in August. Thirty two others await sentencing.

Benzer said several lawyers told him what he was doing was legal as long has he disclosed his ties to the HOA boards, but he admitted to investigators that he shied away from that disclosure. The key to making the scheme work was recruiting the straw buyers, he told investigators.

“Benzer would pick people that would look presentable to the homeowners, such as police officers or senior citizens,” an investigative report said. “Benzer stated he would identify people who fit the mold and then approach them about running for the board.”

Eventually, Benzer’s business relationship with Quon soured and she started pushing construction work to Benzer’s competitors, the investigative reports show. A mutual friend later got them back together.

Benzer was quoted as saying that he and Quon “sometimes didn’t dance well together.”

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

Benzer files motion to stop article publication

Lawyers for Leon Benzer, the alleged mastermind of a long-running scheme to take over Las Vegas Valley homeowners associations and steer construction work to his company, don’t want you to read what he told federal officials about the scheme.

Late Thursday Benzer’s lawyer, Daniel Albregts, filed an emergency motion asking a federal judge to stop the Las Vegas Review-Journal from publishing the article, which had been planned for the newspaper’s Sunday edition.

In court papers, Albregts asks a judge to order that publication be delayed until the court can determine whether the article would cause “irreparable harm” to Benzer’s Sixth Amendment right to a fair trial. Benzer and five others go on trial in February.

“In seeking this relief, defendant recognizes that the newspaper’s rights under the First Amendment are implicated,”Albregts said, “On the other hand, the defendant’s right to a fair trial free from bias and prejudice against him … cannot be ignored.”

A copy of that motion can be seen below. As of late Thursday it had not been considered by a judge, and no restraining order had been served to the newspaper.

Review-Journal Editor Michael Hengel said the newspaper was proceeding with publication because the U.S. Constitution, as well as Supreme Court decisions, acknowledge the media’s right to publish lawfully obtained information.

“We believe publishing the details of this corruption scheme, which victimized thousands of Las Vegans, is an important First Amendment issue.” Hengel said. “We obtained these documents while they were public documents, and see no reason to keep them from the public.”

Benzer Motion

https://www.scribd.com/embeds/245065490/content?start_page=1&view_mode=scroll&show_recommendations=true

Key figure indicted in Las Vegas HOA scheme claimed Attorney General Masto approved his plan

Nevada Attorney General Catherine Cortez Masto

Nevada Attorney General Catherine Cortez Masto

By JEFF GERMAN
LAS VEGAS REVIEW-JOURNAL

Leon Benzer, the accused mastermind of a massive scheme to take over homeowners associations in the Las Vegas Valley, told federal authorities nearly two years ago that he once consulted with Nevada Attorney General Catherine Cortez Masto about his dealings.

Benzer said Masto indicated during a “face-to face” meeting that she approved of his actions, according to a report of a 2011 debriefing authorities conducted with the former construction company boss.

“Masto advised Benzer that she did not have problems with what he was doing, to which she added he had overzealous competitors,” Las Vegas police detective Robert Whiteley wrote after the meeting with Benzer.

Whiteley and FBI Agent Mike Elliott are the lead agents in the long-running federal investigation into the takeover scheme, which occurred between 2003 and 2009.

Two pages of Whiteley’s six-page report were made public this week by defense lawyer Chris Rasmussen with court papers seeking to have his client, Benzer’s half-sister Edith Gillespie, tried separately from Benzer. Rasmussen redacted parts of the pages.

According to Whiteley’s report, Benzer told authorities that the late attorney David Amesbury, a former business partner who pleaded guilty in the scheme, introduced him to Masto. Amesbury killed himself in March 2012.

Investigators followed up on Benzer’s claim and interviewed Masto. Masto has not been accused of any wrongdoing.

On Tuesday, Masto told the Review-Journal she did meet Benzer, but not while she was attorney general. The meeting took place in 2006 while she was running for the office, and the subject of his sweeping business operation did not come up, she said.

“He did not talk to me about his scheme,” Masto said. “Had he talked to me about his scheme, I would have told him he couldn’t do it. It was illegal.” Continue reading