Las Vegas businessman enters guilty plea in federal HOA fraud case
Article Courtesy of The Las Vegas Review-Journal
By Jeff German
Published September 1, 2011
In the first of what is expected to be a wave of criminal cases, political strategist and businessman Steve Wark pleaded guilty Tuesday in the long-running federal investigation of Las Vegas Valley homeowners associations.
During an hourlong hearing, Wark, 54, a longtime Republican political operative, pleaded guilty to one count of conspiring to commit mail and wire fraud. The charge draws a maximum 30 years in prison and $1 million fine, but Wark has agreed to cooperate with federal prosecutors, who are recommending reduced prison time.
Senior U.S. District Judge Lloyd George set a Dec. 16 sentencing for Wark, who is free on his own recognizance, and ordered him to surrender his passport. As part of his plea agreement, he will pay more than $94,000 in restitution.
Afterward, Wark and his lawyer, Angela Dows, declined to comment.
The Las Vegas Review-Journal reported in March that federal prosecutors had identified 75 to 100 co-conspirators, including judges, attorneys and former police officers, at various levels of the massive homeowners association scheme.
About two dozen targets of the investigation are said to be taking plea deals that would ensure their cooperation in the prosecution of higher-level players in the scheme.
In court Tuesday, Charles La Bella, deputy chief of the Justice Department's Fraud Section, told George that Wark's case was one of four filed under seal, and four more cases were expected to be filed in the coming days.
La Bella said another 10 to 15 criminal cases could be filed over the next six weeks. George ordered Wark's case unsealed.
Wark was president of the Vistana homeowners association in 2005 when one of the investigation's key targets, construction defects attorney Nancy Quon, was suing developer Rhodes Ranch over faulty plumbing and other problems at the condominium development.
The fraud investigation became public three years ago with raids of law firms, homeowners association offices and businesses across the valley.
FBI agents seized records related to a scheme to rig homeowners association board elections to position co-conspirators, including former police officers, who would push the boards to file construction defect lawsuits against builders.
Legal work and multimillion-dollar repair contracts then would be funneled to associated lawyers and companies.
Wark admitted that he became a "straw purchaser" in the scheme and bought a condominium at the Vistana community with money provided by his co-conspirators so that he could become a member of the homeowners association, the Justice Department said in its release.
His co-conspirators provided the down payment and paid his monthly mortgage and homeowners association dues.
The goal was to use his position to "manipulate" the association's business to enrich the co-conspirators at the expense of the association's true homeowners, the release said.
"Wark admitted that after being elected to the Vistana board and accepting payments from his co-conspirators, he subsequently voted in a manner directed by and favorable to his co-conspirators," the Justice Department said.
The department's Washington-based Fraud Section took over the wide-ranging investigation from the U.S. attorney's office in November.
Prosecutors in the section arranged the plea agreement meetings away from the U.S. attorney's office, which had asked to be taken off the case to avoid an appearance of a conflict of interest. An investigation was also launched to determine whether anyone in the office had leaked information about the case to the targets.
Attorneys with the Justice Department's Public Integrity Section in Washington were trying to determine whether Quon was getting information.
A Justice Department spokeswoman said Tuesday that the department has now dropped that investigation.
"The Public Integrity Section looked into the allegations of leaks from the U.S. attorney's office and has completed its review and determined no further action is necessary," the spokeswoman said.
Quon, 51, whose law office was searched in the September 2008 homeowner association raids, also is at the center of another criminal investigation by Las Vegas police.
Her live-in boyfriend, former Las Vegas police officer William Ronald Webb, was charged in November in a scheme to arrange her death using what the couple thought were undetectable illegal drugs.
Then on Aug. 17, both Quon and Webb, 43, were indicted in what investigators say was another suicide scheme that involved setting fire to her home.
Clark County prosecutors allege Quon set the Oct. 28 fire in a botched suicide attempt to escape the pressure of the federal homeowners investigation.
In all, Quon faces five felony charges in the local case -- including first-degree arson, conspiracy to commit arson and insurance fraud stemming from the Oct. 28 fire, which caused $250,000 to $300,000 in damage to her Rhodes Ranch home.
Quon, who once reportedly brought in $100 million through construction defect lawsuits for homeowners associations, has denied planning her own death and setting the fire. She has not been charged in the federal investigation.