California regulators have accused the husband of an Orange County assemblywoman of misleading investors in his real estate lending business.
The Department of Real Estate accused Dan Harkey, husband of Assemblywoman Diane Harkey, of self-dealing and "making misrepresentations of fact to investors."
The agency is seeking a disciplinary hearing to determine whether to suspend or revoke the corporate broker license issued to Harkey’s three companies, Point Center Financial Inc., National Financial Lending Inc. and Calcomm Capital Inc.
Regulators filed an accusation against Harkey and the three companies Nov. 19. A hearing on the allegations has not been scheduled.
Harkey’s attorney, Jeffrey Benice, said Harkey did nothing wrong and will defend himself vigorously. "We expect the DRE will dismiss its accusation," he said.
Using videos and live presentations, Harkey attracted wealthy investors to his lending business, using their money to finance hundreds of millions of dollars in loans. The company began to falter about 2007 when many of its borrowers defaulted, sending the loans into foreclosure.
In July, an Orange County Superior Court jury ordered Harkey and Point Center to pay more than $10 million in damages to investors. They had accused Harkey of using their money to issue ill-advised real estate loans and pocketing exorbitant fees from loans on failed projects.
Lloyd Charton, a neighbor of Harkey who was an investor in the company, said he was pleased to learn that the state agency had taken action.
"One of the reasons we filed the lawsuit was to make sure Dan Harkey would not be allowed to do it to another group of investors," Charton said. "Now the public will be protected from Dan Harkey."
Point Center filed for bankruptcy earlier this year.
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