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Friday, October 30, 2015
FBI: Financial Fraud - Inside the Investigation of a Las Vegas Construction Boss
The FBI released the below report:
When a federal judge sentenced former Las Vegas construction boss Leon Benzer to nearly 16 years in prison in August, it marked a final chapter in a $58 million fraud scheme that took investigators nearly a decade to unravel.
Over a period of many years, Benzer brazenly sought to gain control of numerous condominium homeowners associations (HOAs) in the Las Vegas area to secure lucrative construction and other contracts for himself and additional conspirators. To date, 44 individuals, including numerous state officials, have been convicted of crimes in connection with the fraud—which has been described as one of the largest public corruption cases in Nevada history.
“This case represented an incredibly complicated financial fraud with a significant public corruption component,” said Special Agent Michael Elliott, who spent nearly eight years working on the investigation from the FBI’s Las Vegas Division. “It involved so many people over so long a period of time, it was like an intricate spider web of crime that kept expanding.”
The scheme was nothing if not grandiose. In attempting to control dozens of Nevada HOAs between approximately 2002 and 2009, Benzer, an attorney, and other conspirators recruited straw buyers to purchase condominiums and then secure positions on HOA boards of directors. Benzer rigged HOA board elections and paid board members to take actions favorable to his interests—including hiring his co-conspirator’s law firm to handle construction-related litigation and awarding profitable construction contracts to Benzer’s company, Silver Lining Construction.
Evidence in the case against Leon Benzer included a $20,000 cash bribe that was concealed in this baby wipes container.
Benzer manipulated and bribed HOA boards in a variety of ways—he often claimed he had local judges and law enforcement in his pocket; in other cases, he fooled unwitting homeowners into thinking his actions were legitimate and they were simply making wise investment choices.
In September 2008, investigators executed a search warrant—one of nine that would take place during the investigation—and found that Benzer was in the process of targeting well over 20 different HOAs for illegal takeovers. “There were boxes and boxes of folders with information about different HOAs,” Elliott said. “He was deliberately attempting to identify board members along with other information to target what he believed were HOAs vulnerable to takeover through bribery, extortion, or whatever illegal means could be used.”
One of the HOAs had more than 700 units, with each owner paying community fees, Elliott said. “In some cases, HOA boards had operating budgets larger than some small Nevada cities. There was lots of money at stake,” he added.
The FBI, along with investigators from the Las Vegas Metropolitan Police Department and Internal Revenue Service - Criminal Investigations, used a variety of investigative techniques—including confidential sources, multiple undercover operatives, and forensic accountants—and conducted hundreds of interviews to piece together the extent of the crimes committed by Benzer and his co-conspirators.
In January 2015, Benzer pled guilty to multiple counts of conspiracy to commit mail and wire fraud and tax evasion. In addition to his 188-month jail term, he was ordered to pay more than $13 million in restitution.
“This was a very sophisticated scam that evolved over time and generated millions of dollars for Benzer,” Elliott said, adding that when Benzer was riding high, the charismatic fraudster employed “an army of lawyers, had bodyguards, and had an entourage that included three armored SUVs. He had no problem spending money to maintain his lavish lifestyle.”
But like many high-flying scam artists, it was only a matter of time before Benzer was brought to justice. “Now he is in jail and penniless,” Elliott said. “He has nothing.”
Paul Davis is a writer who covers crime. He has written extensively about organized crime, cyber crime, street crime, white collar crime, crime fiction, crime prevention, espionage and terrorism. His 'On Crime' column appears in the Washington Times and his 'Crime Beat' column appears in Philadelphia Weekly. He is also a regular contributor to Counterterrorism magazine and writes their online "Threatcon" column. Paul Davis' crime fiction appears in American Crime Magazine. His work has also appeared in the Philadelphia Inquirer, the Philadelphia Daily News and other publications. As a writer, he has attended police academy training, gone out on patrol with police officers, accompanied detectives as they worked cases, accompanied narcotics officers on drug raids, observed criminal court proceedings, visited jails and prisons, and covered street riots, mob wars and murder investigations. He has interviewed police commissioners and chiefs, FBI, DEA, HSI and other federal special agents, prosecutors, public officials, WWII UDT frogmen, Navy SEALs, Army Delta operators, Israeli commandos, military intelligence officers, Scotland Yard detectives, CIA officers, former KGB officers, journalists, novelists and true crime authors, gamblers, outlaw bikers, and Cosa Nostra organized crime bosses. Paul Davis has been a student of crime since he was an aspiring writer growing up in South Philadelphia. He enlisted in the U.S. Navy when he was 17 in 1970. He served aboard the aircraft carrier U.S.S. Kitty Hawk during the Vietnam War and he later served two years aboard the Navy harbor tugboat U.S.S. Saugus at the U.S. floating nuclear submarine base at Holy Loch, Scotland. He went on to do security work as a Defense Department civilian while working part-time as a freelance writer. From 1991 to 2005 he was a producer and on-air host of "Inside Government," a public affairs interview radio program that aired Sundays on WPEN AM and WMGK FM in the Philadelphia area. You can read Paul Davis' crime columns, crime fiction, book reviews and news and feature articles on this website. You can read his full bio by clicking on the above photo. And you can contact Paul Davis at email@example.com