Diane Harkey Seeks State Tax Board Seat as Husband's Company Goes Belly-Up to Stop Suits

Categories: Court, Politics
Thumbnail image for Thumbnail image for Harkey.JPG
After many starts and stops, the day in court seemed to finally arrive Thursday for 80 investors who felt they had been hornswoggled by the husband of Assemblywoman Diane Harkey (R-Dana Point).

But now a fatal blow to the $43 million lawsuit against Dan Harkey and his Point Center Financial has likely come instead.

Bankruptcy protection Point Center Financial is filing for this week would stop the Orange County Superior Court civil trial.

"I am devastated," one plaintiff tells the Weekly.

The suit accused Dan Harkey of fraud, using investments to fund the Harkeys' lavish lifestyle, and contributions from developers of doomed projects financed by Point Center Financial to pay for Diane Harkey's political career.

The assemblywoman is not part of the fraud allegations, but what's curious is she originally campaigned three terms ago as a self-made woman who would use her own funds from her successful financial career to win office, and then apply her business acumen to legislating. It was later revealed Point Center Financial developers had actually ponied up tens of thousands to put her in her Assembly seat.

And yet, as the termed-out assemblywoman has now announced plans to run in 2014 for a seat on the State Board of Equalization (which collects California taxes), she is still pointing to her business career. Having also expressed an interest in graduating to the state Senate in 2014, Harkey has put this out to solicit interest in a March 21 fund-raiser for the Board of Equalization campaign:

Serving you in the California State Assembly since 2008, I have witnessed first-hand the difference having a strong advocate on your side can make. Skills acquired in my previous career spanning 30 years in banking and corporate finance, provided me with an in-depth understanding of finance, business, taxation, and economics. I have spent my time in the Legislature serving on all budget, finance and taxation committees. Applying real-world experience, I have argued for, drafted and supported taxpayer and business-friendly legislation, while struggling to help you, the entrepreneurs, corporate executives and hard-working taxpayers, through the Sacramento financial maze.

We have a lot of work to do to return the gold to California, and I respectfully request your support for member of the State Board of Equalization in 2014. Working together, we can make a difference!

Her husband's Point Center Financial is making a difference by seeking bankruptcy protection not because of the Orange County fraud case, but to stop a separate lawsuit in San Diego County by a builder owed millions from a court judgment against Harkey's company. The defense claims the builder was going after investor funds and had to file for bankruptcy as a strategy to stop that.

Wrap your head around that: Investors who say they've been ripped off by Point Center Financial won't get relief in court (for now) because Point Center Financial is filing for bankruptcy to protect investor funds.

That repeated popping sound you just heard was from 80 heads exploding.

Follow OC Weekly on Twitter @ocweekly or on Facebook!


Advertisement

My Voice Nation Help
9 comments
Augustine25
Augustine25

I've seen Diane Harkey speak and she does refer to her business experience. :-) I'm a Republican and this looks awful to me. The more I read up on the lawsuit, the worse it looked. As far as I can tell, she has been listed as an employee of Center Point Financial in the past. I expect that the GOP will get better at vetting candidates thanks to this experience.

JimDuck
JimDuck

This is far from over.  Harkey and his wife have assets that were gained from fleecing his investors.  They will pay.

canman619
canman619

Yes, Mr. Scepticboy, and where-o-where did those hundreds of millions disappear?  And why do Diane's fiscal reports for PCF  always show a profit?  The fat lady hasn't sung in this opera...

ScepticBoy
ScepticBoy

I'll guess the bankruptcy protects other investor's money from the losses on a particular loan that their investments had nothing to do with.  Sounds like wealthy sophisticated commercial real estate investors who invested in high risk, high return loans that went sour need to quit whining and suck it up.  It is unreasonabble to expect Dan Harkey could've foreseen the worst RE downturn in 70 years was coming when nobody else did either.  BTW, I gathered rather indirectly from the article Diane Harkey was not involved in Point Center Financial operations and that her husband helped with her compaign.  So what's the point besides some kind of Democrat smear compaign?

Dweezle
Dweezle

As I recall a bankruptcy can be denied if debts were for fraudulent purposes. Example funds were loaned for development of real property but were actually diverted to maintaining a lifestyle beyond their means or were used to fund a political campaign, it might help if the real properety had been developed as promised but as I understand from this article, I do not think that happened. How do I know? I followed the case of AZ former Gov J Fife Symington who tried to file Ch 7 as he was being prosecuted for many federal fraud charges I followed the stories in your sister paper the New Times.

briansays
briansays

do as i say not as i do--gop mantra

paullucas714
paullucas714 topcommenter

Didn't Jesse Jackson Jr  and his wife just resign and are facing prison time for something similar? I mean using campaign funds for lavish lifestyle items. And isn't using ill gotten gains (fraudulent funds) to fund a campaign illegal as well?

canman619
canman619

Mrs. Harkey has proven that she is not real, real good at handling other peoples money but confidently predicts she will be good on the board of the B of E.  She is adept at making a profit (look at her annual fiscal statements) out of others' misery. I, as a plaintiff have to admire her for her tenacity! 

JimDuck
JimDuck

@ScepticBoy Harkey has been delaying this lawsuit for 4 years because he has been caught red handed lying to his investors.  He made misrepresentations in his loans in order to get people to invest with him.  You either work for him or are one of his lemmings who he has lied to for years.  He will never pay another dime to any investor other than the ones that are suing him. 

Now Trending

Anaheim Concert Tickets

From the Vault

 

Fashion

General

Loading...