(Michael Chamberlain/Nevada Business Coalition) – A fifth person has entered a plea bargain in the massive litigation scam involving construction defect lawsuits in condominium complexes.
The latest to make a deal is a 24-year old whose participation in the scandal began when she was just 16 years old. Not only did the conspirators in this case have no respect for the law, they were willing to solicit the services of a kid to help them out. Did they have absolutely no shame? You already know the answer to that one.
During the last decade attorneys took advantage of laws that are easily exploitable to generate massive profits in alleged construction defect cases. In more than a few cases some of them conspired with others in a massive fraud.
The plan involved attorneys and others running the scam to find straw purchasers for condominiums. These straw purchasers would get elected to the boards of the association, often by rigging elections. Once in control of the board the conspirators would file construction defect cases using the attorneys who were part of the scheme and directing work to construction company conspirators. Those involved made tens, possibly hundreds, of millions of dollars from these swindles.
The latest person to cop a plea became involved in helping the conspirators rig board elections at condominium homeowners associations. Eventually she became a straw purchaser.
Prosecutors allege these scams occurred at a number of condominium complexes and involved as many as 100 attorneys, judges, police officers, business people and others. As many as two dozen plea agreements are expected as minor players in the scheme cooperate to build cases against the big fish. Noted construction defect attorney Nancy Quon has been implicated in this scandal.
Condominium complexes were chosen as the targets of these scams instead of single-family developments because it was much easier to rig the lawsuit process. Conspirators did not have to get the approval of the homeowners of each individual home in order to file suits involving all the homes.
Anything that touches multiple pieces of property, as well as those areas that are not part of any individual lot but belong to the association, are considered “common areas”. Whereas an individual homeowner can opt out of a construction defect suit if he doesn’t believe there’s anything wrong with his house; that is not the case with common areas. The association has control over those.
Because each building in a condominium complex contains more than one home, virtually the entire structure is considered common area, including the roof, floors and even walls. So an individual homeowner largely has no say over whether a construction defect lawsuit that includes her home is filed. In the cases that were part of this scam the decisions regarding whether to file a lawsuit, who would handle it and who would perform the emergency and remedial “repairs” were essentially all made by the conspirators involved. The homeowners were merely pawns in a fraud to get at insurance company cash.
There will be more plea bargains to come and we hope that results in a very strong case against the ringleaders. After that we must address the areas of the law that make Nevada so ripe and such an easy target for construction lawsuit abuse.