Second defendant pleads guilty in HOA case

Article Courtesy of The Las Vegas Review-Journal

By Jeff German

Published September 11, 2011 

A second defendant in the long-running fraud investigation of Las Vegas Valley homeowners associations pleaded guilty Tuesday in U.S. District Court .

Darryl Scott Nichols, 47, of Las Vegas entered a guilty plea before U.S. District Judge Philip Pro to one count of conspiracy to commit mail and wire fraud, the Justice Department in Washington said in a news release late Tuesday. His sentencing is set for Dec. 4.

Last week, longtime Republican political strategist Steve Wark pleaded guilty to the same charge, which draws a maximum 30-year prison term.

Both men have agreed to cooperate in the investigation and are among about two dozen targets striking government deals over the next several weeks as part of an effort by prosecutors to obtain indictments against higher-level players in the massive fraud scheme.

Nichols admitted to playing a role in the scheme that prosecutors allege gained control of homeowners associations to hand out legal work and construction contracts to companies preferred by his co-conspirators.

In all, nearly a dozen homeowners associations have become embroiled in the scheme, according to federal court documents. The associations named in the documents include Vistana, Chateau Versailles, Chateau Nouveau, Park Avenue, Sunset Cliffs, Pebble Creek, Mission Ridge, Mission Pointe, Palmilla and Horizons at Seven Hills.

Prosecutors allege the scheme took place from August 2003 through February 2009. Nichols admitted to joining the conspiracy in November 2005.

According to the Justice Department, Nichols admitted that he became a "straw purchaser" of condominiums at Chateau Versailles, Sunset Cliffs and Palmilla. He got elected to the homeowners association boards at Chateau Versailles and Sunset Cliffs.

"Nichols admitted that he was given cash payments for his assistance in purchasing the properties, obtaining HOA membership status, rigging elections and using his position to manipulate the HOAs' business to enrich the co-conspirators at the expense of the HOA and legitimate homeowners," the Justice Department said.

To ensure that Nichols and other straw buyers would win their board elections, court documents alleged, "Nichols and his co-conspirators employed deceitful tactics," including forging ballots.

Nichols admitted that in June 2008, at the request of his co-conspirators, he agreed to mail phony ballots from California to Las Vegas to make it appear as though legitimate out-of-town homeowners were voting, the documents said.

Once on the homeowners association boards, Nichols accepted payments from his co-conspirators and "voted in a manner directed by and favorable to his co-conspirators," the documents alleged.

The fraud investigation became public three years ago with FBI raids of law firms, homeowners association offices and businesses across the valley.

The investigation is being handled by the Justice Department's Fraud Section in Washington.

HOA fraud cases may be merged

Las Vegas businessman enters guilty plea in federal HOA fraud case