Prosecutors have secured more plea bargains in the construction litigation scandal case. From these latest pleas, it appears the net may be closing on the big fish who ran the scam, which is reported to include attorneys, judges and police officers.
Mary Ann Watts and attorney David Amesbury are the seventh and eighth players in the scandal to make deals with prosecutors and agree to provide evidence against others involved.
The R-J reports that, for the first time, one of the main conspirators in the scam, construction company owner Leon Benzer, was named in court for his role.
Watts became the owner of a property management company after Benzer and another person involved provided her with start-up capital. She used this position to steer work to Benzer’s company and other co-conspirators.
Amesbury was a partner with Benzer and others in the Courthouse Café in the Regional Justice Center. Amesbury also plead guilty in a fraudulent scheme involving this business that, aside from the people involved, was not related to the construction litigation scam.
In the construction litigation fraud, co-conspirators would set up straw purchasers as homeowners in condominium developments. They would take control of the HOA boards of these developments by rigging the elections.
After gaining control of the board, they would direct work to property management companies and construction companies run by people involved in the scheme. They would also work to file construction defect litigation using attorneys who were co-conspirators and hire the contractors involved to perform emergency remediation and post-lawsuit repairs of alleged construction problems. Often the bidding process was rigged to bilk the HOA’s by forcing them to pay far above market rates for this work.
Conspirators exploited the flaws of Nevada’s construction defect statutes (Chapter 40). Rather than encouraging homeowners and contractors to resolve legitimate construction issues, as it was intended, it does precisely the opposite.
It encourages plaintiffs and attorneys to file lawsuits instead of seeking repairs. At the same time it creates disincentives for contractors to address legitimate problems.
This scam should serve as a warning. We cannot expect that statutes like Chapter 40, with such wide open doors to potential abuse, won’t be abused.
We hope that all those who broke the law in this scam receive their just punishments. And we must work toward tort reform and, specifically, Construction Lawsuit Fairness reform to ensure that these abuses are not repeated.
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