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!
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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.