David Saks: Las Vegas Man Pleads Guilty in Connection with Fraud Scheme to Gain Control of Condominium Homeowners’ Associations

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Las Vegas Man Pleads Guilty in Connection with Fraud Scheme to Gain Control of Condominium Homeowners’ Associations

Las Vegas Man Pleads Guilty in Connection with Fraud Scheme to Gain Control of Condominium Homeowners’ Associations

U.S. Department of Justice August 30, 2011
  • Office of Public Affairs (202) 514-2007/TDD (202) 514-1888
 

WASHINGTON—A Las Vegas man pleaded guilty today for his role in a fraud scheme to gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs could direct business to a certain law firm and construction company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department.

Steven Wark, 54, pleaded guilty before U.S. District Judge Lloyd D. George in the District of Nevada to one count of conspiracy to commit mail and wire fraud.

According to the plea agreement, Wark admitted that in May 2005 he joined a fraud scheme that had operated from as early as approximately August 2003 through approximately February 2009.

Wark admitted that he participated the scheme to control various HOA boards of directors so that the HOA boards could award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Wark’s co-conspirators.

According to court documents, in order to accomplish the scheme, co-conspirators used straw purchasers to purchase mortgage loans for units within HOA communities. Wark admitted that he agreed to become a principal and managing partner of a business entity for the sole purpose of purchasing a condominium unit at the Vistana Condominiums complex in Las Vegas under the business’s name and gain an ownership interest in the Vistana HOA community. Wark admitted that he did not have any real interest in the business entity and his co-conspirators provided the down payment and monthly payments, including HOA dues and mortgage payments, for the condominium and were the true owners of the property.

Wark also admitted that he agreed to run for election to the HOA board at Vistana. Once elected to the Vistana board, Wark breached his statutory fiduciary duty to the homeowners by accepting from his co-conspirators compensation, gratuities and other remuneration that improperly influenced, or reasonably appeared to influence, his decisions, resulting in a conflict of interest. According to plea documents, Wark’s co-conspirators managed and operated the payments associated with maintaining straw properties owned and controlled by co-conspirators by running a so-called “Bill Pay Program,” by which co-conspirators funded the properties through several limited liability companies at the direction of a co-conspirator. Many of the payments were wired from California to Nevada. 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.

Wark admitted that he also acted as the co-conspirators’ campaign consultant to help ensure the co-conspirators were elected to the HOA boards. According to plea documents, another tactic that co-conspirators used to rig certain HOA board elections was to prepare forged ballots for out-of-town homeowners and either cause them to be transported or mailed to California and thereafter to have the ballots mailed back to Las Vegas from various locations around California so as to make it appear that the ballots were completed and mailed by bonafide homeowners residing outside Nevada.

Wark admitted that he was given cash payments and received an interest in the Vistana condominium by or on behalf of his co-conspirators for his assistance in purchasing the property, obtaining HOA membership status and using his position to manipulate the HOA’s business to enrich the co-conspirators at the expense of the HOA and the bona fide homeowners.

The maximum sentence for conspiracy to commit mail fraud and wire fraud is 30 years in prison.

The case is being prosecuted by Deputy Chief Charles La Bella, Assistant Chief Michael Bresnick and Trial Attorneys Nicole H. Sprinzen and Mary Ann McCarthy of the Criminal Division=s Fraud Section. The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

Courtesy FBI




David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • August 30 2011 07:50PM

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