Friday, August 02, 2013

FBI calls 2001 HOA scheme precursor to the big one

"It had the makings of a lucrative construction defect scheme. A California law firm, an architect and a construction company were conspiring to pack the homeowners association board at the Starfire condominium complex in southwest Las Vegas with straw buyers to win contracts to pursue construction defect litigation and eventual repair work. Phony defect claims were devised, and HOA board members were bribed with cash and prostitutes to steer business to the conspirators. A little-known investigation into the scheme was conducted by the Nevada attorney general’s office in 2001, but no charges were ever filed. The investigation, however, is considered the forerunner to Operation GrandMaster, the six-year Justice Department probe into a similar takeover of 11 homeowners associations across the valley, according to the FBI. And it may be what triggered the involvement of the late construction defect lawyer Nancy Quon in the valleywide takeover scheme, which occurred between 2003 and 2009." [emphasis added]
Another big story from the Las Vegas Review-Journal on the huge Las Vegas HOA takeover scheme. The US Department of Justice calls their investigation Operation Grandmaster. Apparently a defense attorney in this case is asking why a 2001 investigation by the Nevada Attorney General's office into an apparent HOA takeover plot never went anywhere and they decided not to prosecute, even though (the attorney says) the Starfire situation was similar to what ended up happening between 2003 and 2009 in eleven HOAs, and that became the DOJ's current Operation Grandmaster prosecution.

1 comment:

IC_deLight said...

The management companies are interstate and so are their practices. This is not limited to Las Vegas. Due to the corruption of local public officials, this would not likely have been unraveled without the involvement of the FBI. The FBI got involved because of changes to Nevada HOA law.

Wonder why certain HOA vendor trade lobby groups oppose giving homeowners the protections against HOAs that they have against government? Well now you know one reason. There is rampant, rampant fraud, embezzlement, defalcation, etc. by vendors throughout the country. In fact, it is so prevalent one might recognize that the business plan of the management companies IS embezzlement, fraud, defalcation, etc.