2016 Las Vegas Attorney and Three Others Convicted for Their Roles in a Fraudulent Scheme to Take Over Homeowners’ Associations
|U.S. Department of Justice March 18, 2015|
WASHINGTON—Following a 14-day trial, a federal jury in Las Vegas returned guilty verdicts yesterday in a case against a Las Vegas attorney and three others for their roles in a scheme to fraudulently take control of homeowners’ associations (HOAs) for the purpose of directing the HOAs’ construction defect litigation and repair work to a law firm and construction company owned by other co-conspirators.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office, Special Agent in Charge John Collins of Internal Revenue Service Criminal Investigation’s (IRS-CI) Las Vegas Field Office and Sheriff Joseph Lombardo of the Las Vegas Metropolitan Police Department made the announcement.
Keith Gregory, 61, of Las Vegas, Salvatore Ruvolo, 86, of Henderson, Nevada, David Ball, 47, of Las Vegas, and Edith Gillespie, 54, of Las Vegas, were found guilty yesterday of conspiracy to commit wire and mail fraud. Gregory and Ball were also convicted of two counts of wire fraud each, Ruvolo was convicted of three counts of wire fraud, and Gillespie was convicted of one count of wire fraud. Ruvolo was found not guilty of one count of mail fraud. Sentencing hearings are scheduled for June 17, 2015, before U.S. District Judge James C. Mahan of the District of Nevada.
According to the evidence presented at trial, from approximately August 2003 through February 2009, the defendants engaged in a complex scheme to direct construction defect litigation and construction repairs at more than 10 condominium complexes in the Las Vegas area to a law firm operated by a co-conspirator and a construction company, Silver Lining Construction, owned by Leon Benzer. In order to accomplish the scheme, the defendants and their co-conspirators identified HOAs for condominium complexes that had potential construction issues that could result in construction defect litigation and require repair. They then sought to take controlling interests on the identified HOAs’ boards by purchasing units in the condominium complexes and running for election to the boards.
Specifically, the evidence at trial demonstrated that Benzer and others, including Gillespie, enlisted “straw purchasers” to use their names and credit to purchase condominiums in the identified complexes. Ruvolo, Ball and Gillespie, among others, acted as straw purchasers, and the evidence demonstrated that Gillespie provided false information on her loan application in connection with the purchase of a condominium in furtherance of the scheme.
According to the evidence, Ruvolo and Ball then sought to be elected to HOA boards in the complexes where they had purchased condominiums. Other straw purchasers were directed to transfer a partial interest in their condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA boards. To ensure that conspirators won the HOA elections, the defendants employed deceitful tactics, such as submitting fake and forged ballots, and hiring complicit attorneys to run the elections as “special election masters,” who presided over the elections and supervised the counting of ballots.
The evidence demonstrated that, once elected, the conspiring board members, including Ruvolo and Ball, met with Benzer and other co-conspirators in order to manipulate the selection of property managers, contractors, general counsel and construction defect attorneys to represent the HOAs. Gregory, an attorney licensed in Nevada, agreed to become the general counsel for two HOAs and to take direction from Benzer.
At trial, the evidence showed that 33 of the 37 condominium units purchased as part of the scheme went into foreclosure. Over the course of the scheme, more than $7 million in construction contracts were awarded to Benzer’s company from a single HOA. Several million dollars in legal fees were also directed to another co-conspirator. Benzer compensated each of the defendants for their participation in the fraud scheme. For example, the evidence demonstrated that Ruvolo received monthly payments of approximately $2,000, and Ball received $5,000 per year, for acting as straw purchasers and board members. Benzer also directed approximately $90,000 in HOA-related legal work to Gregory and paid him approximately $12,000 in kickbacks.
On Jan. 23, 2015, Benzer pleaded guilty to one count of conspiracy to commit mail and wire fraud, fourteen counts of wire fraud, two counts of mail fraud, and two counts of tax evasion. He is awaiting sentencing.
The case was investigated by the FBI, IRS-CI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section. The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Thomas B.W. Hall and Alison L. Anderson of the Criminal Division’s Fraud Section.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
2012. Lawyers Targeted in Nev. Homeowner Association Fraud Probe.
By Martha Neil. Two Nevada lawyers who were targeted in a federal investigation of claimed widespread corruption among Las Vegas area homeowner associations have been found dead within a week of each other. The body of David Amesbury, 57, who pleaded guilty in October to conspiracy to commit bank fraud and conspiracy to commit mail and wire fraud, was discovered on Sunday. Another attorney who was probed in the case, Nancy Quon, 51, was found dead on March 20 in the bathtub of her Henderson home.
2012. Attorney, Disbarred Lawyer Among Latest 14 to Take Pleas in Las Vegas Homeowner Association Fraud. By Martha Neil.
Another 14 defendants took pleas Thursday in an ongoing federal investigation concerning massive alleged fraud among Las Vegas homeowner associations. Among them are a lawyer, Brian Jones, 38, who admitted in his guilty plea that he helped rig board elections at two associations, the Las Vegas Review-Journal reports. He formerly worked at the now-disbanded law firm of Kummer Kaempfer Bonner Renshaw & Ferrario. A disbarred lawyer, Jeanne Winkler, 44, admitted she failed to disclose to a HOA board for which she served as general counsel that she had formerly done legal work for a construction boss. The fraud case, in which another 11 defendants previously took pleas in federal court in Las Vegas, revolves around claims that defendants rigged HOA board elections to steer lucrative contracts and construction defect litigation to members of their circle. An earlier ABAJournal.com post provides additional details about the case, in which other attorneys have been accused of wrongdoing and judges reportedly may be under investigation.
2011. U.S. Department of Justice. Office of Public Affairs. WASHINGTON—A Las Vegas woman pleaded guilty today for her role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs would direct business to a certain law firm and construction company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office, Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department. Marcella Triana, 35, pleaded guilty before U.S. District Judge Kent J. Dawson in the District of Nevada to one count of conspiracy to commit mail and wire fraud.