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Fed investigations hover over developer suits

Sandra Chereb

Allegations of corruption, embezzlement, death threats and criminal associations are flying in dueling lawsuits between high-profile former partners locked in a legal fight over a stalled Nevada land development.

But those claims may be just a sideshow after federal authorities launched unrelated investigations into business practices connected to both parties.

One inquiry into the political contributions of Harvey Whittemore, a once powerful Nevada lobbyist, lawyer and land developer, prompted prominent Nevada politicians, including Senate Majority Leader Harry Reid, a Democrat, and Republican Sen. Dean Heller, to shed thousands of dollars in campaign contributions to charity.

At issue is whether employees of Whittemore's former company and its subsidiaries contributed to political campaigns and were then illegally reimbursed with company money, according to Las Vegas Review-Journal reports that relied on anonymous sources.

The FBI is investigating Whittemore contributions, according to a person with knowledge of the case who confirmed the probe to The Associated Press on the condition of anonymity because the person was not authorized to speak about it publically.

On the other side of the fractured Nevada community development _ which once envisioned 160,000 homes on 43,000 desert acres _ are California homebuilders Tom Seeno and his brother, Albert Seeno Jr., owners of Seeno Homes and subsidiaries. They were partners with Whittemore in Wingfield Nevada Group Holding Co. from 2004 until the relationship imploded in 2010.

The Seenos also hold Nevada gambling licenses and are part owners of six casino properties, including the Peppermill in Reno.

The Seenos have had their own share of controversy, and company subsidiaries are referenced in a recent FBI affidavit filed in federal court in San Francisco, where a top sales executive for Discovery Homes, a subsidiary of Seeno Homes, is facing charges of wire and bank fraud. The Seenos are not charged in the case.

The Whittemore case is expected to be presented to a federal grand jury in Reno on Wednesday. However, officials with the FBI and Nevada U.S. Attorney Daniel Bogden's office in Las Vegas have said they could not confirm the investigation.

Whittemore was once an influential figure in Nevada politics and legal circles. As a lobbyist, he represented big casino clients and tobacco companies, and was a partner in the powerful Lionel, Sawyer & Collins law firm. He now has a small private law office in Reno.

Whittemore's lawyer, Dominic Gentile in Las Vegas, declined requests for comment. A Whittemore spokeswoman said previously that the federal investigation stemmed from a legal battle between Whittemore and former partners in the Coyote Springs master-planned community about 60 miles north of Las Vegas.

Federal Election Commission records show Whittemore, family members and employees contributed nearly $150,000 to Reid's campaign on a single day, March 31, 2007. Most of the donations were for $4,600, the maximum amount allowed for a primary and general election cycle. Reid and other Nevada politicians who received contributions from Whittemore, including Heller and Rep. Shelley Berkley, said they were donating the funds to charity.

"We believe it's the right thing to do," said Stewart Bybee, Heller's communications director.

Federal records also show members of the Seeno family contributed at least $38,800 to Reid three days earlier, on March 28, 2007.

At the time, the Wingfield partners were developing the massive Coyote Springs community, but the collapse of Nevada's housing market a year later has the project in limbo.

Whittemore obtained water use rights and overcame federal land use restrictions including an agreement with the federal Bureau of Land Management to swap land at the center of the 67-square-mile Coyote Springs site for land on the fringes to be designated as a preserve for the endangered desert tortoise.

In 2004, Congress agreed to accept $10.4 million from Whittemore to move a federal power line easement across U.S. 93 to allow the development to proceed.

Wingfield also developed Wingfield Springs and the Red Hawk golf course in northern Nevada.

The Seenos in their civil lawsuit filed Jan. 27 in Clark County District Court in Las Vegas, accuse Whittemore of bilking them out tens of millions of dollars and using Wingfield assets to finance lavish lifestyles; buy homes; subsidize a research facility at the University of Nevada, Reno; even sponsor a pro golfer.

"Whittemore made sure that friends, family and political and lobbying associates enjoyed his unauthorized expenses as well," the Seenos said in their suit, which claims Whittemore embezzled more than $40 million.

Whittemore and his wife, Annette, in turn filed suit against the Seeno brothers and Albert Seeno III in U.S. District Court in Reno. They accuse the Seenos of making death threats against their family; having ties to the Hells Angels motorcycle gang and convicted felons; and forcing them through intimidation to turn over homes, cars, jewelry, money _ even a Steinway piano.

That suit alleges Albert Seeno Jr. became "disgruntled" with his investment in Wingfield Nevada Group when the economy tanked and began falsely accusing Whittemore of embezzlement.

Meanwhile, Discovery Homes sales director Carey Hendrickson, 36, of Martinez, Calif., is accused of trying to buy four of her employer's homes simultaneously in 2008 as part of what the mortgage industry calls a "builder's bailout," described by mortgage giant Freddie Mac as a scheme in which builders provide excessive incentives to buyers that are kept secret from the lender, which can lead to inflated home appraisals and false property values.

Hendrickson maintains her innocence and intends to enter a not guilty plea at her arraignment scheduled March 8 before U.S. Magistrate Judge Laurel Beeler in federal court in Oakland, said John Runfola, the San Francisco-based defense lawyer representing her.

An FBI affidavit filed in Hendrickson's case said she received nearly $480,000 from Collateral Financing Group, a subsidiary of Seeno homes owned by Albert Seeno III. She returned $122,000 when the purchase of one home fell through.

The FBI also said she received $169,000 from another Seeno company, West Coast Homebuilders, over six months in 2008 to help her make mortgage payments on her own home.

The allegations against Hendrickson and her connections to the Seenos could draw the attention of Nevada casino regulators.

"We take a general stance that we're always monitoring the actions of our licensees," said Nevada Gaming Control Board Chairman Mark Lipparelli, who would neither confirm nor deny that his agency is looking into the California allegations.

The Seenos have come under the scrutiny of casino regulators before. In 2004, Seeno Jr. was fined $775,000 for associating with outlaw bikers. Seeno III was fined $25,000.

The Associated Press