Dan Harkey, Legislator's Husband Tossed from Belly-Up Investment Firm, Targeted by State
So far, the personal fortune of dethroned investment guru Dan Harkey and his Assemblywoman and state Board of Equalization candidate wife Diane Harkey (R-Dana Point) have survived lawsuits against the patriarch and bankruptcy proceedings for the development-lending company he founded.
But now California's Department of Real Estate has Dan Harkey in its cross-hairs. Finally, some might be wont to say.
Like the legal complaints that proceeded it, the state regulators' proposed disciplinary action accuses Harkey of misleading investors. And the punishment being sought would rob him of his livelihood, suspending or revoking the corporate broker license issued to his companies Point Center Financial Inc. (PCF), National Financial Lending Inc. and Calcomm Capital Inc.
The accusation was filed Nov. 19, but an administrative hearing has yet to be scheduled.
Jeffrey Benice, Harkey's attorney, reportedly told the Los Angeles Times' Stuart Pfeifer that his client did nothing wrong and that he expects the Department of Real Estate "will dismiss its accusation."
Harkey promised investors healthy returns by using their money to finance hundreds of millions of dollars in loans to developers. But many of those projects fell through, borrowers defaulted, loans went into foreclosure and so much for those healthy returns.
An Orange County Superior Court jury in July ordered Harkey and PCF to repay investors more than $10 million, but actual payment of that damage award has been complicated by bankruptcy proceedings that included Harkey being removed from control of the company.
Many investors have characterized themselves as retirees who were counting on those returns to survive, but Harkey has labeled them "wealthy" and aware of the risks they were taking.
Perennial office-holder Diane Harkey has trumpeted the business acumen she developed in the private sector as a reason to elect her to the board that administers taxes collected by the state. The business acumen of her husband? Not so much these days.