A Bureau of Reclamation official targeted in an FBI-led corruption investigation sat on the boards of two public companies tied to an accounting firm agents raided last month.
The focus of the investigation is allegations of bribery and kickbacks related to a $1 million financial audit of Hoover Dam. The accounting firm of LL Bradford &Co. won the contract last year, and the Bureau of Reclamation official, Fredrick “Rick” Zaffarese-Leavitt, was among those who oversaw the work.
Leavitt’s Henderson home, the Bureau of Reclamation regional office in Boulder City and LL Bradford’s office in Las Vegas were searched by FBI agents in mid-February.
Records show Leavitt, the financial management director of the federal agency’s regional office since 2010, has been a director of Vestin Realty Mortgage II and MVP REIT, two companies run by Vestin Group founder Michael Shustek. Leavitt also has chaired the audit committee of Vestin Realty Mortagage II, records show.
Ira Levine, legal counsel for the Vestin companies, acknowledged that Shustek and Lance Bradford, one of LL Bradford’s managing partners, have had business dealings, mostly involving real estate, over the years. Bradford also served as the Vestin Group’s chief financial officer from 1998 to 2003.
“No one has informed the company that there’s any connection between what the government is investigating and Vestin,” Levine said.
Shustek and the Vestin companies share an office building with LL Bradford at 8880 W. Sunset Road. FBI agents executed search warrants at the accounting firm’s third floor offices Feb. 18 but did not seek evidence from Vestin’s second floor offices. The building is owned by Vestin Realty Mortgage I and II.
Leavitt had served with Shustek on Vestin Realty Mortgage’s board since January 2006, company filings obtained by the Las Vegas Review-Journal show. He was paid $500 for each board meeting he attended. Latest records show he collected a total of $4,500 in director fees for that board in 2014.
Since 2012 Leavitt, a certified public accountant, has been paid $25,000 a year to sit on the MVP REIT board, plus $500 for each meeting, filings show. Leavitt earned a total of $30,500 in director fees for the MVP board in 2014.
On Feb. 23 the Vestin companies filed paperwork with the U.S. Securities and Exchange Commission showing Leavitt resigned from the boards on Feb. 19, the day after the FBI raids.
Shustek has been at the helm of the Vestin Group since 1999 and part of the real estate and mortgage communities for a quarter century.
Leavitt’s defense lawyer, David Chesnoff, declined comment on the FBI investigation. So did Bradford’s attorney, Richard Wright.
The Hoover Dam investigation is being led by the FBI’s public corruption squad in Las Vegas, but the agency has said little about the probe.
No arrests have been made in the investigation, which is in its early stages. An FBI affidavit citing probable cause for the raid has been sealed by a federal judge.
Hoover Dam is run by the Bureau of Reclamation, which oversees sale of electricity harnessed from the Colorado River to cities and power companies in the West. The Bureau of Reclamation has said it is cooperating in the investigation.
Contact reporter Jeff German at firstname.lastname@example.org or 702-380-8135. Find him on Twitter: @JGermanRJ