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FBI Investigating Construction Defect Schemes in Las Vegas
A team of FBI agents and detectives with the Las Vegas Metropolitan Police Department have joined forces to investigate alleged corruption among local home owners associations, involving a web of board members, management companies, lawyers, contractors and others who have allegedly siphoned away millions of dollars from home owners and developers in construction defect litigation cases.
Specifically, the FBI is investigating whether individuals were placed on home owner association boards to direct business stemming from construction defect lawsuits to select companies.
Forty-three people are listed on the warrant, which requests "any and all documentation, correspondence and notes" about them.
Recent reports in the local media of the ongoing investigation “confirm what many of us in the home building and construction industry have been saying for years — that this is an area ripe for potential abuse, with home owners often being hurt,” said Irene Porter, executive director of the Southern Nevada Home Builders Association.
Investigators raided nine sites recently, including the community management company for the Vistana Condominiums and six other condo complexes; the office of Leon Benzer, owner of Silver Lining Construction; and at least two law offices of attorneys who handle construction defect litigation cases.
A review of court documents indicates that some of the developments have the same board members, with links between the neighborhoods and Benzer companies and associates.
“We applaud the efforts of law enforcement officials investigating these complex, often highly technical cases. The home building industry stands ready to provide whatever assistance may be required. We are confident that the professionals of Metro and the FBI will bring this investigation to a just conclusion,” Porter said.
Benzer has owned Silver Lining Construction since 1992. The company specializes in remediation work and claims involvement in 300 local building projects, including Vistana.
Owners at Vistana who initiated a massive construction defect lawsuit paid Benzer’s company more than $1 million to fix some of the defects.
Public records show that Benzer's manager, Mark Kulla, is also the attorney who set up Benzer's many businesses. Vistana home owners alleged in the past that the board purposely steered their lawsuit to Kulla and the remediation work to Benzer, and that both profited from the arrangement.
The FBI wants to know if the Vistana set-up was also used to bring large lawsuit settlements for other home owners associations.
The president of the Vistana home owners association was Steve Wark, a well-known Republican political strategist and frequent TV talk show guest. The vice president of the Vistana association is reportedly a full-time employee of Benzer.
For more information, e-mail Elizabeth Ambrose at NAHB, or call her at 800-368-5242 x8253.
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