Sixth defendant pleads guilty in HOA scheme

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published October 22, 2011  

A former homeowners association board member became the sixth defendant Thursday to plead guilty in the far-reaching federal investigation into fraud and corruption at local associations.

Edward Lugo, who served on the board of the Park Avenue condominium complex in the south valley, entered a guilty plea in federal court to one count of conspiracy to commit mail and wire fraud.

Senior U.S. District Judge Lloyd George set a March 22 sentencing.

In a 14-page plea agreement, Lugo admitted playing a role in the massive scheme to stack homeowners association boards with members who pushed for construction defect lawsuits against builders. A dozen homeowners associations have been dragged into the investigation.

Lugo, 47, who lives in the Los Angeles area, admitted in the agreement that his participation began in August 2003 and ended in February 2009.

He admitted becoming a "straw purchaser" to get elected to the Park Avenue homeowners association board, as well as rigging various association elections and managing a "bill pay program" run by his co-conspirators that funded other straw purchasers around the Las Vegas Valley.

Park Avenue homeowners recalled Lugo and another former board member, ex-police Capt. Frank Sutton, a month after a joint FBI-Las Vegas police raid in the investigation on September 2008. Sutton has not been charged.

Lugo's plea is the latest in a long line of deals expected in the high-profile case.

Lawyers from the Justice Department's fraud section in Washington, D.C., plan to file as many as two dozen criminal cases in the coming weeks. Four trial attorneys, led by Deputy Chief Charles La Bella, are prosecuting the case. The Nevada U.S. attorney's office has removed itself to avoid a potential conflict.

Lugo and the other defendants who have pleaded guilty have agreements to testify in a push by prosecutors to indict higher-level players, who include lawyers, judges and former police officers.

With the help of friendly homeowners association board members, lucrative legal work and repair contracts were funneled to lawyers and companies associated with the scheme at the expense of the homeowners, who were deprived of honest voting on their boards, court documents have alleged.

The board members were straw purchasers elected by the co-conspirators through classic dirty campaigning that included conducting phony polling, hiring private investigators to dig up dirt on candidates and rigging the balloting, the documents have alleged.

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