HOA defrauded of millions accuses law firm of facilitating scheme
By: Jenny Wilson
Las Vegas Review-Journal
28 March 2017
Forty people were arrested and at least three people killed themselves
after federal investigators started bulldozing a construction company
owner’s massive election-rigging scheme to defraud homeowners
associations of millions of dollars and win an illegal fortune off of
construction defect lawsuits and building repair contracts.
The construction company owner, Leon Benzer, is serving a 15-year
prison sentence. His criminal partner, former construction defect
attorney Nancy Quon, killed herself in 2012 as authorities were zeroing
in on her role. Her estate since has paid out a $6 million settlement
to the homeowners association that suffered the greatest losses, a
lawyer for the Vistana HOA said in court Tuesday.
But the dust still hasn’t settled. The homeowners association is trying
to convince a judge that the fraud ringleaders could not have embezzled
millions without the gross malpractice committed by a law firm that was
hired in 2006 to protect the integrity of the Vistana HOA board
elections.
The firm, Kummer Kaempfer Bonner Renshaw and Ferrario, did the opposite
and concealed illegal behavior from its client, attorney Richard
Haskin, who is representing the Vistana HOA, told a Clark County judge
Tuesday.
Judge Mark Denton heard opening statements Tuesday in the civil case
the Vistana HOA filed against the firm, which since has changed its
name to Kaempfer Crowe. Only one of the firm’s lawyers, a first-year
associate, ever faced criminal charges.
In his opening statement, Haskin raced through the details of Benzer’s
corrupt takeover of the Vistana HOA board, highlighting the players who
helped him along the way.
Benzer and Quon started infiltrating the Vistana HOA board more than a
decade ago using straw buyers, handpicking their cronies as board
candidates and rigging the elections to eventually win three-person
majority control of the five-member board. They fired existing
construction defect lawyers, and Quon took charge. She handled the
legal work, while Benzer’s company, Silver Lining Constructions, was
awarded the remediation contracts.
independent 3rd party to oversee election
By 2006, the activities had raised eyebrows at the Nevada Real Estate
Division, which received several complaints from homeowners, Haskin
said. It demanded that Vistana hire an independent third party to
oversee the upcoming election.
The board hired KKBRF. Haskin told the judge Benzer had a prior
business relationship and friendship with one of the firm’s attorneys.
“You couldn’t possibly represent both Leon Benzer and Vistana in this case,” he said, accusing the firm of conflict of interest.
The law firm assigned the Vistana matter to first-year associate Brian
Jones, who was the only lawyer at the firm arrested. In pleading guilty
to federal charges, he admitted misleading state officials about his
knowledge of election rigging and allowing Benzer’s puppets to stuff
ballots at his office.
“They were supposed to safeguard those ballots. They were supposed to
collect those ballots,” Haskin said. “They were supposed to protect
Vistana from the crimes that were circling … and they didn’t.”
Haskin accused the firm of concealing the corrupt election activity from Vistana.
Mark Ferrario, a Kaempfer Crowe lawyer representing his firm, said
KKBRF was not “tied in with Benzer, with this group of people that were
out infiltrating HOAs.”
Instead, Ferrario blamed solely Jones.
“Mr. Jones abruptly left the firm. … He concealed this activity from
those at the firm but let the firm conceal nothing from Vistana,”
Ferrario said.
Lawyers for Vistana and KKBRF stipulated to a maximum $7 million in
damages that can be awarded to Vistana if the malpractice claim holds.
That figure represents a portion of a $19 million construction
settlement it was awarded under Benzer and Quon’s control, money that
players in the fraud scheme scooped up.
The law firm argues that a $6 million settlement Vistana won from the
Quon estate — and about $700,000 recovered from other sources — should
offset the damages for which it can be found liable. Ferrario argued to
the judge that Vistana is entitled to only $300,000 if the judge sides
with the HOA.
Attorneys representing Vistana, meanwhile, are seeking the full $7
million in attorney damages and fees. They argue that the HOA was
defrauded of much more than that amount, and that the stipulated figure
only represents the amount for which the firm alone can be held liable.
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