EDITORIAL: Case closed, prosecutors still won’t release HOA fraud files

Originally posted, July 1, 2015

The Justice Department went to outrageous lengths to keep its Southern Nevada homeowner association fraud case cloaked in secrecy for seven years. Federal prosecutors are prepared to go even further to keep the public from ever knowing the depth of the conspiracy and the scope of the investigation.

Earlier this month, the Las Vegas Review-Journal filed papers in federal court to compel the release of millions of documents that supported the case. One of the largest and most complicated criminal probes in Las Vegas history is finally wrapped up, resulting in four convictions via trial and 38 guilty pleas. When scam mastermind Leon Benzer is sentenced Aug. 6, the bow will be officially tied.

None of the reasons for the absence of openness that characterized the prosecution exists any longer — not that any of them held water in the first place. The investigation can’t be compromised because it’s over. Plea negotiations can’t be undermined because every deal has been made. The leak prevention measures, in place because lawyers and police officers were among those targeted and convicted, can be unplugged.

All of these actions, layered on top of one another year after year, diminised the credibility of the proceedings. The public had no assurance that the game wasn’t rigged. The only way they can be sure that the investigation and prosecution were fair is to review the mountain of evidence.

But the Justice Department wants its secrecy preserved. As reported by the Review-Journal’s Jeff German, Fraud Section attorneys filed documents late last week opposing the newspaper’s request to dissolve the protective orders that keep the case files from the public. The papers are so full of red herrings that U.S. Magistrate Judge George Foley will need a fishing pole and a net to get through the Aug. 5 hearing on the matter.

First, prosecutors claim the release of the records could subject witnesses and defendants to identity theft because the evidence includes bank records, driver’s license numbers and Social Security numbers. Governments at all levels commonly combine confidential information with public records to prevent the release of public information. The presence of such personal information does not justify withholding millions of other records, including grand jury transcripts and police reports.

Second, prosecutors fret that several public figures who were investigated weren’t charged and might be caused embarrassment. On the contrary, the release of the records will allow the public to judge whether said public figures received preferential treatment because of personal relationships or political considerations. Besides, as Review-Journal attorney Maggie McLetchie notes, “Protecting people from embarrassment is not a valid basis to keep information from the public, especially when we’re talking about public figures.”

For heaven’s sake, many of the victims in the $60 million conspiracy still don’t know exactly what happened between 2003 and 2009, when Benzer and his pals recruited straw buyers for homes that were part of HOAs, then used those buyers to take over HOA boards through rigged elections and direct millions of dollars in construction defect repair contracts to Benzer’s company. Were those repairs even completed properly? Hundreds of thousands of Southern Nevadans are part of HOAs. They have an interest in learning about this case if they’re to prevent such crimes from being copied.

There is no reason for continued secrecy in this case. Judge Foley, open the records.


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