Federal prosecutors under investigation for alleged obstruction of justice in HOA probe

Prosecutors in the U.S. attorney's office in Las Vegas are under criminal investigation, suspected of leaking sensitive information about the probe of massive fraud involving valley homeowners associations.

The leaks being investigated by the Justice Department's Washington-based public corruption unit might have allowed a target of the HOA probe, construction defects attorney Nancy Quon, to alter or destroy evidence sought by investigators.

FBI agents have interviewed at least one federal prosecutor close to Quon and are examining the conduct of others in the U.S. attorney's office for potential obstruction of justice charges, sources said.

"To find prosecutors investigating prosecutors and FBI agents investigating prosecutors -- I can't think of an instance where that has happened before. This is serious," said Douglas McNabb, a Washington defense attorney who frequently has taken on the Justice Department Public Integrity Section in 25 years of federal criminal law practice.

The leak investigation reportedly goes beyond the U.S. attorney's office to include prominent officials who might have picked up confidential information they passed on to Quon, whose political connections and friends in the Las Vegas legal community include several judges.

While a high-profile figure in both the HOA and leak investigations, Quon is not alone. Investigators are looking at relationships between some federal prosecutors and other HOA targets that could have jeopardized the long-running investigation.

The Las Vegas Review-Journal reported in December that the Public Integrity and Fraud Sections of the Justice Department had taken over the HOA probe.

Las Vegas-based investigators had complained that the U.S. attorney's office was slow in moving the HOA case forward, but Russell Marsh, who heads the U.S. attorney's criminal division, would not say then what had caused the shift.

Quon's law office was searched in September 2008 during valleywide FBI raids in the HOA investigation, which has yet to result in any indictments.

Dozens of people have been targeted in the scheme to rig homeowner association board elections to position conspirators -- including former Las Vegas police officers -- who would push the boards to file construction defect lawsuits.

Legal work and repair contracts then would be funneled to associated lawyers and companies. Millions of dollars were said to be at stake.

Las Vegas FBI spokesman Joe Dickey declined comment Tuesday, as did Natalie Collins, a spokeswoman for the U.S. attorney's office.

Quon's lawyer, Thomas Pitaro, said he has was unaware of any leak investigation.

"If they are investigating, it seems absurd," Pitaro said. "Although I am a constant adversary of the U.S. attorney's office, I have the highest respect for their professionalism, qualifications and integrity."

Quon, who once reportedly brought in $100 million through construction defect lawsuits for homeowners associations, also is at the center of another criminal investigation by Las Vegas police.

Her live-in boyfriend, former police officer William Ronald Webb, was charged in November and accused of a bizarre scheme to arrange her death by using undetectable illegal drugs so that he and her family could collect life insurance money.

Detectives suspect Quon might have been involved in the death plot while under intense federal scrutiny in the HOA investigation. Quon has denied planning her own death.

Steven Myhre, a longtime top assistant to U.S. Attorney for Nevada Dan Bogden, had overseen the HOA case until the Washington prosecutors took control.

Bogden ran the U.S. attorney's office from 2001 until 2007, when the Bush administration forced him out in a political purge of top federal prosecutors.

After his election, President Barack Obama, at the recommendation of Senate Majority Leader Harry Reid, D-Nev., reappointed Bogden to the office in 2009.

The FBI raids in the HOA case came during the interim, and after his reappointment, Bogden disclosed that he owned a condominium at one of the developments under FBI scrutiny.

He also removed himself from making any administrative decisions in the HOA investigation, turning the case over to Myhre.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.