HOA fraud king Leon Benzer gets 15 1/2 years in prison

"Former construction company boss Leon Benzer, the man behind the massive scheme to take over and defraud Las Vegas-area homeowners associations, was sentenced Thursday to 15 ½ years in federal prison.  U.S. District Judge James Mahan also ordered Benzer to serve five years of supervised release after prison and pay $13.4 million in restitution. Benzer, 48, who pleaded guilty to conspiracy, fraud and tax evasion charges, is to surrender to prison authorities Nov. 6."

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So ends the biggest white collar crime prosecution in the history of Las Vegas--eleven HOA taken over by a fraud ring and used to steal millions of dollars. But (see post below) we are not going to see the evidence, which remains sealed by virtue of the US Attorney's office and the federal judiciary. My view is the public needs to learn from this case. We have here the worst example ever seen of HOA private governments being taken over by vendors--contractors and lawyers, mainly--who used them like ATMs. These were people who knew the HOA industry from the inside--who knew how easy it can be for a small group of self-interested people to take over an HOA board of directors, because of the culture of non-participation that prevails in far too many common interest developments. This is a serious problem all over the country--in fact, all over the world.  Nothing is going to change this situation--most people just don't want to be bothered with paying attention to the affairs of their HOA. Their lives are too busy already.  The day will never come when owners live up to the ridiculous expectations that this institution imposes on them. The people who own units in CIDS are just consumers of a mass-produced product, and they need to be protected against the possibility that predatory industry insiders might take advantage of them. I realize that most lawyers, managers, and contractors are trustworthy, but owners have insufficient protection against those who are not. The prosecutors and judges need to open these files so the public and the media and the academy can see exactly how this scheme worked. Then legislators can take the necessary steps to fix this--starting with mandatory full public disclosure of the financial status of every single HOA and condo association.

http://www.reviewjournal.com/news/las-vegas/vegas-hoa-crime-kingpin-leon-benzer-sentenced-15-12-years-prison#st_refDomain=www.facebook.com&st_refQuery=/

Evidence in Las Vegas HOA prosecution remains sealed

"A total of 43 defendants either pleaded guilty or were convicted at trial in what prosecutors say is the largest public corruption case ever in Nevada. Prosecutors opposed dissolving the two protective orders — especially the one that covers the leak investigation, which focused on concerns that Quon was getting confidential information from the Nevada U.S. attorney's office and possibly elsewhere. The Justice Department in Washington took the reins of the HOA investigation after those allegations surfaced. The leak investigation delved into personal and romantic relationships of public officials who have not been charged criminally or disciplined administratively, Justice Department prosecutors argued. Foley shared the government's concerns in his order. "The government has made a sufficient showing that disclosure of these documents would potentially cause unfair prejudice to the individuals who were the subjects of the investigation, but to whom no charges, criminal or administrative, were ever brought," he wrote."

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It has been reported since the start of the prosecution that Washington took over the prosecution because people in the local US attorney's office, and possibly one or more judges, were passing information to attorney Nancy Quon, one of the principals in the fraud ring. She committed suicide. And now the US attorney's office and the federal judiciary have decided that nobody gets to see the evidence in the HOA fraud case--6 million pages of documents.  Is that because it includes evidence that might make the US attorney's office and the federal judiciary look bad?

http://www.reviewjournal.com/news/las-vegas/mass-evidence-huge-hoa-scheme-remains-under-wraps

Police bust weekly mahjong game played by elederly women

http://tampa.cbslocal.com/2015/11/24/police-bust-weekly-mahjong-game-played-by-elderly-women/

Local cops, having solved all the other crimes, decided to bust a mahjong game. The perpetrators range in age from 87 to 95. Who called the cops?  Condo management. It would appear that in fact they didn't violate any law, but I suppose the giant wheel of justice will have to grind all this into dust and answer that question.

When residents clash with homeowner associations, some states step in

"Has your homeowner association fined you for painting your house purple? Have you ignored requests to pay annual maintenance fees for your condo’s clubhouse and swimming pool? Has your association refused to let you see its financial documents These are the types of conflicts that frequently erupt between residents and homeowner or condo associations. Some can get quite heated – or downright nasty. A small, but growing number of states are trying to tackle the problem by creating ombudsman or homeowner information offices to handle the deluge of complaints that often land at state and local agencies. The goal is to educate residents and association board members about their rights and responsibilities under the law and help settle disputes before they wind up in court."

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More state oversight of HOAs and especially condo associations is necessary, but it isn't clear what form it should take. I think ombudsperson offices are a good start, but not everybody agrees with that approach.

Read more here: http://www.myrtlebeachonline.com/news/business/real-estate-news/article41217018.html#storylink=cpy

http://www.myrtlebeachonline.com/news/business/real-estate-news/article41217018.html

SO MUCH FOR THE DEATH OF SPRAWL: AMERICA'S EXURBS ARE BOOMING

Joel Kotkin shows that sprawl and the exurban lifestyle are as popular as ever. This means more new HOAs and condos, so the die-hards who think they are going to abolish CID housing may want to read this.

"It’s time to put an end to the urban legend of the impending death of America’s suburbs. With the aging of the millennial generation, and growing interest from minorities and immigrants, these communities are getting a fresh infusion of residents looking for child-friendly, affordable, lower-density living."

New Jersey: More accountability for HOAs?

"More than 1 million New Jersey residents live in communities with homeowners associations. The top Republican in the state Senate said people pay hard-earned money in dues to these associations, and they deserve some transparency. Senate Republican Leader Tom Kean (R-Westfield) said he is pushing to expand and update the “Planned Real Estate Development Full Disclosure Act,” which hasn’t been changed since 1993.

“This legislation focuses on accountability as well as transparency,” Kean said. “It’s time to update a 22-year-old law.”

Kean has introduced the “Association Homeowners’ Protection Act of 2015″ (S3235). The measure would require:

• Homeowners associations to provide a copy of homeowners’ association insurance policies, which are needed to start personal home insurance claims processes. The association member would have to request the copy and it would have to be sent via email within 24 hours, or hard copy within 48 hours.
• Homeowners associations to offer a 24-hour emergency phone number for members.
• Homeowners associations to provide information including contact numbers for board members, as well as the most recent budget and all insurance information.

“That should be a transparent flow of information, so people have access to how their money is being spent,” Kean said. “The over 1 million New Jersey residents who are part of these associations pay hundreds, if not thousands, of dollars every year to be part of these associations. It’s simple common sense that they should have access to timely information.”

http://nj1015.com/do-you-like-your-homeowners-association/

Is that what you call R-E-S-P-E-C-T?

"Pontiac — A Bloomfield Township condominium association wants to foreclose on a property owned by legendary soul singer Aretha Franklin for non-payment of more than $11,563 in fees and maintenance assessments. The lawsuit, filed by the Hills of Lone Pine Association, an exclusive gated community in Bloomfield Hills, names Franklin, Ally Financial Inc. and CitiMortgage Inc. as responsible for the unpaid assessments on a 4,148-square-foot condo valued at $695,380."

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State condo ombudsperson offices becoming "a thing"

"Has your homeowner association fined you for painting your house purple? Have you ignored requests to pay annual maintenance fees for your condo’s clubhouse and swimming pool? Has your association refused to let you see its financial documents?

These are the types of conflicts that frequently erupt between residents and homeowner or condo associations. Some can get quite heated — or downright nasty.

A small, but growing number of states are trying to tackle the problem by creating ombudsman or homeowner information offices to handle the deluge of complaints that often land at state and local agencies."

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Yes, they are. Because the old model--no regulation of the relationship between BODs and members except civil litigation--is failing.

http://www.columbian.com/news/2015/oct/25/states-stepping-in-to-help-resolve-hoa-conflicts/

Active duty sailor loses home to unpaid HOA fees

Here we go again:

"JACKSONVILLE, Fla. -- The home Mark Bryant purchased in 2006 is modest but he loves it. "I worked real hard for my house," he said. While stationed at Mayport, the gunner's mate purchased the house in the Creekside subdivision with hopes of returning to Jacksonville when he retires.  "Now it is being taken away from me due to a wrongful foreclosure," he said. Bryant is still active duty in the Navy, stationed in Virginia. He lost his home because of $750 in unpaid homeowners association fees. "It has been stressful," said Bryant. How did this happen? His documents show he was stationed in Bahrain during the two years the fees went unpaid -- 2012-2014. Bryant said he was never notified. Court records show an unnamed woman was served in Virginia at a previous address. Bryant said the unnamed woman in the record is not his ex-wife. "When I got back from deployment October 2014," said Bryant, "there was an eviction notice on the property, and that is the first time me actually knowing." The HOA fees went from $750, but when you add interests, late fees, court costs, attorneys fees, it jumped to $4,734.03. The property was foreclosed and sold for $10,300."


http://www.firstcoastnews.com/story/news/local/consumer/on-your-side/2015/10/16/i-was-in-bahrain-and-never-got-a-notice/74078256/

Concord (VA) homeowners struggle to get roads paved

"The Holiday Forest subdivision in Concord has been fighting a 40-year battle to get all of the neighborhood’s roads paved."

Yes--but the state doesn't want to do it because they are private roads.  The picture concerning who is responsible for the hefty price tag now is complicated:

"A 1975 letter from VDOT to the then county administrator stated “I was amazed to find a number of streets constructed in a rather haphazard manner with apparently no regard for proper drainage design.” To pay for maintenance of the unpaved roads, the homeowners’ association collects $100 per house or $90 from an undeveloped lot. Goldman said they have an annual budget of $15,000 to $17,000 to maintain the roads. If the association were to raise rates, homeowners can cancel their membership in the association, as stated in association’s by-laws. The by-laws also state the association will dissolve in 2025, he said. When the subdivision was created in the 1970s, the old subdivision ordinance stated if all new lots were five acres or more, all roads within the subdivision were privately maintained and not maintained by VDOT. The subdivision was developed by Holiday Forest Corporation. “Also over the years, the homeowners have complained about the roads and decided they would rather have state maintained (roads),” said Campbell County Community Development Director Paul Harvey. About half of the roads in Holiday Forest have been taken over by VDOT but five miles still remain unpaved and under the care of the property owners’ association."


http://www.newsadvance.com/news/local/concord-homeowners-struggle-to-get-roads-paved/article_0a4905df-0318-5aaa-8ce8-0ca284d65a6f.html

As flood recedes, skinflint South Carolina faces huge infrastructure tab, limited federal aid

"COLUMBIA, S.C. (AP) — Long before the historic floods of the past week, crumbling roads, bridges and dams and aging drinking water systems plagued South Carolina — a poor state that didn't spend much on them in the first place and has been loath to raise taxes for upkeep. Now the state faces hundreds of millions if not billions of dollars' worth of additional bills to fix or replace key pieces of its devastated infrastructure."

http://www.usnews.com/news/us/articles/2015/10/07/flood-slams-south-carolinas-already-shoddy-infrastructure

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Here we have before us the best evidence to date that the current rage for privatization of infrastructure is a terrible idea.  South Carolina has gone the full magilla with this approach and where has it left them?  

Halloween yard displays go over the top

It's that time of year again, when people decorate their homes in traditional fashion with simulated bloody torture victims wrapped in plastic. Nothing says Halloween like somebody nailed to a cross upside down in the front yard, with syringes jabbed into his neck. At least, that's what some people think. And then the neighbors freak out. No doubt the HOAs will soon swing into action. Personally I generally settle for a few pumpkins, which makes me popular with the squirrels.

http://www.complex.com/pop-culture/2015/10/graphic-halloween-decorations-too-real?utm_source=fijifrost%20facebook&utm_medium=social&utm_campaign=cmcm&utm_content=inf_20_19_2 

Private dams = bad infrastructure

The US media love to run any story from anti-government propagandists about anything a local government does wrong. But look how they ignore the failures of privatization. Most of the nation's dams are privately owned and many of them are supposed to be maintained by HOAs. Here's a rare story where, if you read down far enough, you can get to the point. Developers built thousands of dams, didn't build them right, and private associations have been maintaining them, with results that are not impressive, as evidence by recent events in South Carolina: "...while states might pay or contribute to the repairs of those dams that are publicly-owned, most dams in the country are privately owned, which puts the onus on private parties and associations."

http://www.npr.org/2015/10/11/447181629/aging-and-underfunded-americas-dam-safety-problem-in-4-charts utm_source=facebook.com&utm_medium=social&utm_campaign=npr&utm_term=nprnews&utm_content=2036

Condo owners to dump Trump

Trust fund baby and pseudo-populist charlatan Donald Trump is involved in lots of condo deals. Some say that he is no longer a real estate developer in the true sense of the word, and hasn't been since the early 1990s. Now he makes big bucks renting his name for other people's projects, which leads lots of ignorant, gullible rubes to buy in (probably the same dunces who think he'd make a great president).  If things go south and the project never gets built out, and the lawsuits rain down, he just says he was only paid to put his name on the development and has no responsibility. Here's another lawsuit with some troubling allegations:

http://talkingpointsmemo.com/news/florda-condo-owners-trump

"The building's residents and condo owners had invested in the namesake, a 70-story waterfront tower along Panama Bay, on the strength of Trump's reputation. But during the four years that Trump Panama Condominium Management LLC had managed the property, Central America's largest building, a team installed by the Trump family was accused of running up more than $2 million in unauthorized debts, paying its executives undisclosed bonuses and withholding basic financial information from owners.

The Trumps had done all of this through fine-print chicanery, the board said. A clause in many residents' purchase agreements prevented them from voting against the Trump company's wishes. That allowed the Trumps to install their top employee as chairman and the residents' representative on the board — even though the Trumps' actual stake in the building's residential area was merely a storage closet on the 15th floor."

Why I've been off the air

I've been keeping up this blog since 2003, but this summer I went off the air for several months because of some events that absorbed a great deal of my time and energy.  My mother died in July at the age of 93, in Pasadena, California. I became the executor of her affairs, there have been many things to attend to, and the emotional side of a loss like that is never easy, as I'm sure you know.

At the same time, through a chain of unusual circumstances I ended up teaching an intensive summer course on urban politics at UIC. Then on the heels of that, I went to Australia for a week to give the keynote address at a conference on condominium housing (which they call "strata title").  This was a fantastic conference in an amazing country, but by the time I returned I was behind in my work. To add the final straw, I was made head of the Political Science Department at the University of Illinois at Chicago, and I've been on the learning curve with those additional responsibilities, in addition to teaching two Fall courses with a total of 172 students.

All three of my children started at new universities--two as freshmen and one as a graduate student--and that meant move-outs and move-ins.  I certainly logged some travel miles--this summer I had trips to Israel, Australia, Phoenix (driving back with my oldest son in a 1997 Nissan Pathfinder with 200,000 miles and no air conditioning, in July), Los Angeles, and Springfield, IL.

So that is why I haven't been able to stay current with this blog--but I hope people will continue to send me items, because I'm back on the air.

Is living in a steel box the future of housing?

Coming to a condo association near you, someday?

http://www.theguardian.com/cities/2015/oct/09/living-steel-box-shipping-containers-future-housing

South Carolina: HOAs do a terrible job maintaining dams, causing massive flooding

I've been away from this blog for quite a while because events in my life made it hard for me to focus on it. I have a lot to report on and I'll try to get to it over the next week or so.

First up:  the media has reported extensively on the massive flooding in South Carolina. One angle hasn't been reported much, even though it is at the heart of the problem.  South Carolina is one of these states where they brag about how low their taxes are and how useless government is. But the reason the flooding is so bad is...privatization. They keep taxes low by not spending much public money on maintaining infrastructure like, oh...dams, for instance. Instead they trust developers to build them, and homeowners' associations to maintain them.  And surprise, surprise!  Many HOAs are doing a perfectly terrible job of maintaining the earthen dams that keep water from wrecking other people's neighborhoods.


http://www.thestate.com/news/local/article38043186.html

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 opposing the 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."

http://www.reviewjournal.com/news/las-vegas/feds-fighting-keep-las-vegas-hoa-fraud-files-secret

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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.

Man Who Created The Pink Plastic Lawn Flamingo Dies : The Two-Way : NPR

Man Who Created The Pink Plastic Lawn Flamingo Dies : The Two-Way : NPR



"If you've got a plastic pink flamingo on your lawn, give it a pat on the back. The man who designed the lawn art, Donald Featherstone, has died. He was 79."

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That's quite a legacy. The symbol of the homeowners' rights movements, too.

Dying woman who turned her yard into a giant SANDBOX so she didn't have to mow the lawn threatened with jail if she does not clean it up

http://www.dailymail.co.uk/news/article-3136072/Dying-woman-turned-yard-giant-SANDBOX-didn-t-mow-lawn-threatened-jail-does-not-clean-up.html

"A Missouri woman who says she has about six months to live has been threatened with jail time and fines if she does not remove the sand in the front yard of her home.
Georgianna Reid has lived in her home in Brookside, Kansas City, for more than 33 years, but covered the front of the house with 80 tonnes of sand three years ago, in an operation that cost her $4,000.

'I would say I'm putting in the largest litter box in the world,' said Reid of her unusual approach to landscaping last year.

But the local council and her neighbors don't see it as the beach-like oasis Reid does/Reid received a letter from the city that said she has 10 days to remove the sand from her yard or she will face up to 180 days in jail and a $1,000 fine, KSHB reported.'I called the city, I asked permission, not once but twice,' Reid told the network.She said she gave the yard a facelift because she had grown tired of mowing and watering it."

Read more: http://www.dailymail.co.uk/news/article-3136072/Dying-woman-turned-yard-giant-SANDBOX-didn-t-mow-lawn-threatened-jail-does-not-clean-up.html#ixzz3dvDOX57P
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Read more: http://www.dailymail.co.uk/news/article-3136072/Dying-woman-turned-yard-giant-SANDBOX-didn-t-mow-lawn-threatened-jail-does-not-clean-up.html#ixzz3dvDOX57P Follow us: @MailOnline on Twitter | DailyMail on Facebook"
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She says she'll take the sand out of the yard as ordered, but she's going to replace it with asphalt. Prepare for Round Two...