Evan McKenzie on the rise of private urban governance and the law of homeowner and condominium associations. Visit evanmckenzie.wikispaces.com for my published articles and services.
Tuesday, June 30, 2015
Feds fighting to keep Las Vegas HOA fraud files secret
"Federal prosecutors are fighting to keep secret the mass of evidence in the long-running investigation into the scheme to take over and defraud homeowners associations. Lawyers with the Justice Department’s Fraud Section in Washington filed court papers late last week opposingthe Las Vegas Review-Journal’s request to dissolve two protective orders that withhold documents in the high-profile case from the public. Attorney Maggie McLetchie, representing the newspaper, argued in court filings June 9 that the public has a right to see the evidence, most of which has long ago been turned over to defense lawyers. With most of the 42 convicted defendants sentenced, the epic case is essentially over."
Kind of makes you wonder what they don't want the public to see, doesn't it? Permit me to do a bit of speculating. I have no special inside knowledge of any of this, but I have read the press coverage carefully, particularly Jeff German's exceptional reporting for the Review-Journal.
When the scandal first became public, a number of story lines popped up briefly in the press and then were submerged as the prosecution went forward and the focus shifted to the way the case was unfolding, day to day. I think these unresolved story lines are why the Review-Journal is after the records, and that may be why the DOJ is fighting to keep them secret. For example:
1. Did anybody in the justice system--prosecutors or judges, perhaps--tip off the fraudsters about what was happening inside the investigation? There were stories suggesting that this may have happened.
2. Why did the DC office of the DOJ take the case away from the local US Attorney's office? Why did the private attorney who blew the whistle on all this have to do his own investigation and present it to the government gift-wrapped in order for anything to happen?
3. Was this ring--with 42 convictions--not the whole operation? Were there other people involved who didn't get prosecuted?
4. Was this ring linked to organized crime at a higher level, as in what we call here in Chicago "The Outfit"? There were suggestions of that in the press early on, but that angle was not pursued in the DOJ's case.
5. Are there other HOAs and other HOA vendors in Las Vegas or nearby where the same sorts of things are going on, but without prosecution or even investigation? What turned up in the investigation regarding how prevalent HOA takeover by contractors, and sweetheart deals, really are, in Vegas and elsewhere?
So I hope and trust that the court will open up this investigation so we can have answers to these and maybe other questions.