by Deborah Goonan
Anyone who follows news in the HOA industry knows about the FBI investigation and Justice Department prosecutions of nearly 40 individuals in an elaborate scheme to defraud homeowners’ associations of millions of dollars earmarked to correct construction defects. (If you are not aware, the article linked below provides a good summary)
Leon Benzer, with the assistance of his merry band of cohorts – including the deceased construction defect attorney, Nancy Quon – was able to steal at least $12.7 million from Vistana HOA. An investigation begun in 2008 was able to prevent further fraud thefts for at least half a dozen other HOAs in the Las Vegas area. Had these schemes come to fruition, damages would have been closer to $60 million.
There has been substantial public outcry over the light sentences handed out to most of the criminals involved — mainly prison sentences of 18 months or less, and in some cases, probation. Now prosecutors are hoping to increase sentences by including the crimes that were planned — but not carried out — in the amount of total damages. They say this would result in more jail time for the offenders.
Will US District Judge James Mahan be willing to increase penalties based upon criminal intent? Intent is commonly considered in burglary prosecutions. Dollar for dollar stolen, you would think the sheer amount of money involved in the elaborate plan would be an aggravating factor. The typical burglar might get away with a laptop and some jewelry, valued at a few thousand bucks at the local pawn shop. The typical HOA embezzler or master of fraud will get away with at least ten times that amount.
A convicted criminal can receive far more time in the slammer for robbing a bank of a few thousand dollars, compared with millions involved in this massive HOA fraud.
Of course, one can argue that bank robbery often involves a threat of violence with a deadly weapon. In the land of HOA fraud, the weapon of choice is a bully Board, a corrupt attorney or two, perhaps even a judge. Talk about a gross violation of trust.
According to recent court testimony, Benzer used various intimidation tactics to keep homeowners in line, and to punish whistle blowers, including brandishing firearms at Board meetings, public shaming, and arranging for false arrest. So far, however, it doesn’t appear that the Judge is inclined to consider criminal intent in handing out sentences.
So here’s another novel idea: why don’t our elected officials simply rewrite laws to include much stiffer penalties for fraud and white collar crime in general? I’d say it’s time for a change. Let’s bring penalties more in line with criminal sentencing, and send the message that HOA Crime doesn’t pay.
Read all about it here: