Retirees thwart Vegas condo scam
Wide-ranging scheme involved lawyers, construction companies and straw buyers, who used fraud to get elected to condo boards and steer work to their co-conspirators.
Back in 2002, Wanda Murray and her husband closed their dance studio in Minneapolis and moved to their dream condo in a new Las Vegas development called the Vistana. They paid $105,250 for their two-bedroom home.
When Murray, who is legally blind, agreed to serve temporarily on her condo board of directors, she had no idea what she was getting into. It took years and lots of persistence, but she and her neighbors eventually unraveled a multimillion-dollar corruption scandal.
"They didn’t think there would be four old ladies who wouldn’t put up with their stuff," Murray, 65, told Felix Gillette of Bloomberg Businessweek last year. "They really pissed me off."
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This is basically how the scam worked: Straw buyers would buy tiny shares of units in new Vegas developments, then get elected to the board through fraudulent manipulation of the elections. Once elected, they got their allied lawyers to file construction defect suits against the developers (at high fees) and then steered the repair to an affiliated company, which significantly overcharged for the work.
From 2003 to 2008, the scheme played out at at least 11 developments, Gillette reported. You can read his excellent story, which won him the top individual award from the National Association of Real Estate Editors, here.
Murray and her neighbors first got suspicious when they discovered that new board members didn't live at the complex. Gillette writes:
Murray wasn’t sure why somebody who didn’t actually live in a condo community would want to serve on its unpaid board. It seemed suspicious. In the weeks to come, Murray, along with three other like-minded ladies at the Vistana, formed a kind of amateur detective agency. They searched state property records. They dug deep into Google search results. They even did the occasional stakeout. The more they investigated, the more arrows they found pointing to Silver Lining Construction.
Finally, in 2008, years after the Vistana residents first filed complaints, the FBI seized records from Silver Lining Construction and the legal offices of Nancy Quon, one of the lawyers involved (who killed herself after the scandal broke). So, far 26 people have pleaded guilty in the conspiracy.
The Vistana board is pursuing legal action against some of those involved.
Murray and her husband let their condo go into foreclosure and moved to another community. "The reputation was out there, and nobody wanted to live there," Murray told Gillette. "So we let it go. … I took a big hit."
This story was "new" last year. Try to find something N E W, as in, N E W S.
Otherwise we'll have to call what you report O L D S, = Old Labor Deficient Stories.
Things you recycle at NO costs to look like you're doing something for a living.
Living in a condo community (homeowners association) here in Las Vegas, NV I personally feel that there are more condo communities (HOA's) that should be investigated for questionable business practices by their HOA board members, property management companies, as well as their legal councils. As the financial times get worse, it's amazing what people will do to others who are their neighbors to help suppliment their incomes increase. But as I recall hearing, when the powers that be in a HOA here in Las Vegas have powerful friends in government, questionable business practices get overlooked. They say what happens in Las Vegas, stays in Las Vegas, I wonder if that's because some of what happens in Las Vegas, especially in HOA's might be illegal in other cities.
Common sense is not to be found here. That's why the scam works over and over again!
I bought a patio home (like a condo) in 2005. HOA was $645.00 per year and kept going up. Finally topped out at $920.00 before I sold. We had more than one company during that time collecting the HOA on a quarterly basis. There was a board of homeowners within the community who decided what money to spend on what repairs. The problem I always wanted an answer to was why there had to be an outside company collecting the HOA. I am now in a new home with an HOA of $300.00 with it being collected within the community. No outside company. Now I know why it was so high at the patio home. The companies that collect get a high percentage from each homeowner. So, if you are living in a condo complex that has an outside company that you pay to, look into keeping it within your community. There are plenty of intelligent people who can do exactly what the outside companies do at a lot less per year.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.