Tag Archives: Las Vegas HOA Scandal

Tiny Mice Gang Up On Big Rats in California

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Homeowners usually get the raw end of the deal when they try to fight the “Bigs” in the HOA industry. Some Homeowners in California are trying to turn that trend around. An HOA in Riverside County has sued three former property managers for “fraud, conspiracy to defraud, breach of contract, and breach of fiduciary duty.”  They had employed the management companies for eight years.

Canyon Lake Association then sued its own law firm, Fiore, Racobs & Powers, accusing them of “fraud and malpractice.” They say a lengthy investigation found “no cash management, no separation of accounting duties, credit card abuse by employees, employee salary increases that were not approved by the board.”

The lawsuit further claims that three HOA managers “created and concealed a secret, systemic pattern of conversion and theft of (HOA) assets and funds…and made representations to the board that were not true and were a cover up designed..to delay discovery of the cover-up.”

One final thought comes to mind here.  We haven’t heard much from the federal investigators in Las Vegas. We hope the widespread corruption they found in the Vegas HOA industry hasn’t depressed them to the point that they want to throw in the towel. Actually, we hope the opposite is true.  We hope they take a look around the country and discover that the legal scams in Las Vegas are as identical and numerous as the legal scams in Riverside County, and Modesto, and Weld County,  Colorado. and Dallas and Houston and Miami, and North Carolina.

If you don’t think it’s happening in your own community, you are either naive or dumber than a box of rocks. When we signed those CC&Rs, we stepped into an entirely new form of government with no checks and no balances. We essentially told law firms and property managers, “It’s OK to steal from us.” And then we whine when they steal from us. What gives?

Ward Lucas, author of Neighbors At War! The Creepy Case Against Your Homeowners Association

Nevada State Senator Upset at Blogger Coverage Of “Suicides”

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Nebraska Senator Mike Schneider is asking the governor to call a special session of the legislature to pass new laws against Homeowner Association fraud. He says he’s been reading a blog on the Las Vegas scandal and he doesn’t like the kind of comments being made about suicides committed by suspects indicted in the HOA scandal. (Hmmm, I wonder which blog he’s talking about!)

He does note that out of the first ten suspects named in the massive federal investigation of Las Vegas HOA corruption, four committed suicide. One of the suicides was committed by lawyer David Amesbury. Investigators say he hanged himself from a rafter in his brother’s barn. This was after he was severely beaten and his knees crushed on a street inside a gated Nevada HOA. His suicide seems horribly suspicious. His family doesn’t believe it. This blogger doesn’t believe it. In fact, this blogger is predicting more “suicides” among the increasing number of indicted suspects, especially those who work out plea bargains with prosecutors.

The “suicide” of lawyer Nancy Quon is another weird one. Her whole story is weird. Anyone just reading a few facts about Quon’s story could easily appreciate a new Clancy novel about the case. It’s great fiction, just great fiction.
But Senator Schneider says this kind of publicity is bad for Las Vegas because people think “the Mob” is back in the city killing witnesses. He thinks a new law against HOA corruption would improve the city’s image. He decries the fact that rigged HOA elections are egregious and that they amount to a legalized shakedown of insurance companies.

Senator Schneider is right about one thing. There absolutely have to be some legislative changes to fight this kind of corruption. But he doesn’t take into consideration is that Las Vegas HOAs are not unique. The same kind of corruption is endemic in HOAs across America. The very structure of Homeowners Associations puts them in a position where corruption by board members, managers and attorneys is almost encouraged. There are no double-checks, there are no controls, there’s nothing to stop corruption in most of these gated neighborhoods.

It’s sad, but any new state law against Homeowner Association corruption is simply not going to work. There are already statutes against organized crime. That’s what’s allowing the U.S. Attorney to bring these HOA indictments in the first place. The only new law that would have any kind of impact is a federal law that gives homeowners back their access to the Constitution’s Bill of Rights. The Constitution created all sorts of double checks on government excesses. But people who buy HOA homes sign away their access to the Bill of Rights. Give those rights back, take away the power of HOA boards to arbitrarily fine, sue and foreclose on homes for minor violations and you might actually see some real change.
BTW, credit is due reporter Nathan Baca of KLAS-TV 8 News in Las Vegas for interviewing Senator Schneider and getting this story out to the public.

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

Prominent Las Vegas HOA Figure Found Dead

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Nancy Quon, the attorney at the center of a Homeowner Association scandal in Las Vegas, has been found dead in her bathtub. Quon had been accused in an HOA construction defect litigation scandal that took in more than a hundred million dollars from insurance companies that represented Homeowner Associations in Nevada.

The FBI has been investigating up to a hundred Homeowner Associations in the Las Vegas area, and has staged several raids on the offices of HOAs and HOA management companies. The scandal has been in the hands of at least three federal grand juries over the past three years. At least ten prominent figures in the investigation have pleaded guilty to a variety of charges over the past five months.

Quon and her associates have been accused of arranging for ‘straw men’ to be elected to the boards of Nevada Homeowner Associations. Those newly elected board officers would then vote to file construction defect lawsuits against insurance companies. Those lawsuits were then funneled to construction companies affiliated with Quon’s law firm. The head of one of those construction companies is a prominent night club owner in Las Vegas who also runs a number of Nevada construction companies.

Police in Las Vegas say that foul play was not suspected in Quon’s death, and that she may have been drinking in her bathtub when she passed out.

A complicating factor, though, is that Quon and a Las Vegas police officer were accused of plotting to arrange her “suicide” more than a year ago, supposedly to collect insurance money for her children. The police officer allegedly arranged for the Las Vegas Police Department laboratory to manufacture a quantity of GHB, a drug frequently used at rave parties, to be used in her death. That officer’s conversation was recorded by a police informant and the officer is currently under indictment in connection with her attempted suicide last year.

During the alleged suicide attempt last year, Quon’s home caught fire and she was pulled from her burning home and revived by paramedics. She claimed at the time that she was not attempting suicide. Quon’s death will complicate the FBI’s investigation of the Homeowner Association scandal, since she was apparently the key target of the federal investigation.

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association

Five Crooks Down, Dozens More to Go

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There’s no way to explain how significant the Homeowners Association corruption scandal in Las Vegas really is. It’s huge, of course, for Nevadans. More than any other state, HOA members there have seen their home values plummet, sometimes up to 80 percent.

In the Las Vegas disgrace, a fifth person, Angela Esparza, 24, has now pleaded guilty to helping rig HOA board elections with phony ballots and proxies. She’ll get off easy, though. It’s sad to see that she’ll get a light sentence, but at least she’ll be snitching on some of the other major suspects in this stenchy scandal.

Good old Las Vegas corruption. Judges, cops, attorneys, HOA board members and management companies. In fact, Esparza has told investigators she prepared some of her phony ballots in the office of a certain lawyer. Vegas residents, of course, all know who that lawyer most likely is.

Investigators and prosecutors from Washington DC had to be flown in to complete the investigation because there was too much suspicion of potential corruption in the Nevada U.S. Attorney’s office.

How important is this federal investigation? The FBI and the U.S. Attorney have created an investigatory model that could be transported to just about any major city in America. The kind of corruption being discovered in Las Vegas is going on across the country. For reasons explained in my upcoming book, Neighbors At War: The Creepy Case Against Your Homeowners Association, the problem is not that crooks intentionally try to get onto HOA boards. It’s that the whole HOA structure begs for crooks to come on board.

A massive number of homeowners have lost their homes to foreclosure, not just foreclosure to the banks, but foreclosures carried out by corrupt Homeowners Association boards. In fact, HOA foreclosures are often done for incredibly minor violation of covenants. Bank foreclosures are overseen by thousands of pages of state and federal rules. Nothing oversees an HOA foreclosure.

Often, the “lucky stiff” who ends up buying the HOA house for pennies on the dollar, is a board member, attorney, or another “insider” who’s tipped off that a “super quick seizure and auction” is going to be taking place. That buyer is usually the only one at the auction. He quickly re-sells the house to make it impossible for the original owner to get it back. Any kickbacks? Ha! We’ll have to wait and see! The FBI expects to take down dozens of highly placed officials over the next few months. (Insider’s tip: A major player in this ring of Las Vegas swindlers has already left town to set up a similar scheme in another sunbelt state. Hmmm, could it be a lawyer?)

Homeowners Associations are de-facto governments. Yet they have far more power than most other governments. They don’t have to abide by such concepts as free speech, freedom of assembly, respect for religion. The Second Amendment is so much trash to some HOAs. Racism and discrimination are endemic. Unannounced inspections of the interior of private homes is going on in California and elsewhere. Discrimination against the handicapped exists everywhere.

Yes, there are good Homeowners Associations and many people are happy with their own. But the system, itself, is flawed. Every HOA is just one rigged vote, one faked proxy and one election away from putting into office the kinds of people who are stinking up the Las Vegas housing market.

God Bless the F.B.I.

Ward Lucas
Author of
Neighbors At War: The Creepy Case Against Your Homeowners Association