The King of All Vegas Real Estate Scams - how homeowners were bilked by those they least suspected: their neighbors -
Before the market crashed and home prices tumbled, before federal investigators showed up and hauled away the community records, before her property managers pled guilty for conspiring to rig neighborhood elections, and before her real estate lawyer allegedly tried to commit suicide by overdosing on drugs and setting fire to her home, Wanda Murray thought that buying a condominium in Las Vegas was a pretty good idea.
At first glance, Murray doesn’t look much like the type of person who would arrive in Las Vegas only to get tangled up in and eventually help unravel a complex criminal conspiracy. At 65, she stares out at the world through thick glasses. She is legally blind. Her eyes never quite seem to focus on any one thing. On a recent Friday morning, she sits at her dining room table wearing a zip-up leopard-print sweatshirt and recounts how she helped to foil a group of lawyers and contractors running amok in Sin City. “They didn’t think there would be four old ladies who wouldn’t put up with their stuff,” says Murray. “They really pissed me off.”
Before moving to Las Vegas, Murray and her husband ran a children’s dance studio in the suburbs of Minneapolis. Every so often, they would travel to Las Vegas on vacation. They loved the warm, dry weather. A poolside condo, far away from the Minnesota winters and a short drive from the Bellagio fountains, seemed like the perfect place to retire.
In 2002 they bought a two-bedroom condo for $105,250 in a new gated community, the Vistana, on the southwest outskirts of the city. The development’s architecture consisted of vaguely Spanish-style stuccoed buildings with ruddy tiled roofs. All told, there were 732 units in the subdivision, hundreds of imported palm trees, three swimming pools, and one cloudless Nevada sky.
Condominium complexes such as the Vistana were springing up across the city. Fueled by low interest rates and feverish demand, there were 32,964 closings on new condominiums and apartment conversions in Las Vegas from 2002 to 2007, according to Restrepo Consulting Group. At the same time, the building boom was creating a growing market for the contractors who fixed the construction problems, such as leaky roofs or faulty electrical outlets, that emerged at the hastily built developments.
In Las Vegas these large-scale repair jobs often involved lawsuits. There were a handful of lawyers in town who specialized in such suits, which pitted the collective owners of a gated community—in the form of nonprofit neighborhood corporations known as homeowner associations—against their developers.
As Las Vegas’s housing supply exploded, so did the competition among lawyers and contractors to represent new homeowner associations in so-called construction-defect lawsuits. It was in this environment, according to plea agreements recently unsealed in an ongoing FBI investigation, that a shadowy outfit cooked up a brazen scheme.
When a new development was nearing completion, the group would buy a couple of units in the community and then transfer partial ownership of the condos to individuals secretly on its payroll, according to court documents. While pretending to be residents of the communities, these “straw buyers” would run for leadership positions on boards of the new homeowner associations. By paying off community managers, hiring private investigators to find dirt on legitimate candidates, and rigging elections, the documents allege, the straw buyers were able to infiltrate boards at several new developments in Las Vegas from 2003 to 2008. Once in control of the boards, the straw buyers would then use their governing positions to steer millions of dollars in construction and legal fees back to their co-conspirators. Targets included the Chateau Nouveau, Chateau Versailles, Park Avenue, Palmilla Townhomes, Jasmine, Pebble Creek, Mission Ridge, Mission Pointe, Horizons at Seven Hills, Sunset Cliffs, and the Vistana.
Read more -
http://www.businessweek.com/magazine/the-king-of-all-vegas-real-estate-scams-12082011_page_2.html
Before the market crashed and home prices tumbled, before federal investigators showed up and hauled away the community records, before her property managers pled guilty for conspiring to rig neighborhood elections, and before her real estate lawyer allegedly tried to commit suicide by overdosing on drugs and setting fire to her home, Wanda Murray thought that buying a condominium in Las Vegas was a pretty good idea.
At first glance, Murray doesn’t look much like the type of person who would arrive in Las Vegas only to get tangled up in and eventually help unravel a complex criminal conspiracy. At 65, she stares out at the world through thick glasses. She is legally blind. Her eyes never quite seem to focus on any one thing. On a recent Friday morning, she sits at her dining room table wearing a zip-up leopard-print sweatshirt and recounts how she helped to foil a group of lawyers and contractors running amok in Sin City. “They didn’t think there would be four old ladies who wouldn’t put up with their stuff,” says Murray. “They really pissed me off.”
Before moving to Las Vegas, Murray and her husband ran a children’s dance studio in the suburbs of Minneapolis. Every so often, they would travel to Las Vegas on vacation. They loved the warm, dry weather. A poolside condo, far away from the Minnesota winters and a short drive from the Bellagio fountains, seemed like the perfect place to retire.
In 2002 they bought a two-bedroom condo for $105,250 in a new gated community, the Vistana, on the southwest outskirts of the city. The development’s architecture consisted of vaguely Spanish-style stuccoed buildings with ruddy tiled roofs. All told, there were 732 units in the subdivision, hundreds of imported palm trees, three swimming pools, and one cloudless Nevada sky.
Condominium complexes such as the Vistana were springing up across the city. Fueled by low interest rates and feverish demand, there were 32,964 closings on new condominiums and apartment conversions in Las Vegas from 2002 to 2007, according to Restrepo Consulting Group. At the same time, the building boom was creating a growing market for the contractors who fixed the construction problems, such as leaky roofs or faulty electrical outlets, that emerged at the hastily built developments.
In Las Vegas these large-scale repair jobs often involved lawsuits. There were a handful of lawyers in town who specialized in such suits, which pitted the collective owners of a gated community—in the form of nonprofit neighborhood corporations known as homeowner associations—against their developers.
As Las Vegas’s housing supply exploded, so did the competition among lawyers and contractors to represent new homeowner associations in so-called construction-defect lawsuits. It was in this environment, according to plea agreements recently unsealed in an ongoing FBI investigation, that a shadowy outfit cooked up a brazen scheme.
When a new development was nearing completion, the group would buy a couple of units in the community and then transfer partial ownership of the condos to individuals secretly on its payroll, according to court documents. While pretending to be residents of the communities, these “straw buyers” would run for leadership positions on boards of the new homeowner associations. By paying off community managers, hiring private investigators to find dirt on legitimate candidates, and rigging elections, the documents allege, the straw buyers were able to infiltrate boards at several new developments in Las Vegas from 2003 to 2008. Once in control of the boards, the straw buyers would then use their governing positions to steer millions of dollars in construction and legal fees back to their co-conspirators. Targets included the Chateau Nouveau, Chateau Versailles, Park Avenue, Palmilla Townhomes, Jasmine, Pebble Creek, Mission Ridge, Mission Pointe, Horizons at Seven Hills, Sunset Cliffs, and the Vistana.
Read more -
http://www.businessweek.com/magazine/the-king-of-all-vegas-real-estate-scams-12082011_page_2.html
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