Harkey Investor Letter - March 12, 2013

Last things first...  At the end of this blog entry we have posted the second in a series of emails Dan Harkey selectively circulated to certain investors. Many of these folks are unaware that Point Center is in bankruptcy and that their investment portfolio is in a shambles. Immediately following the Harkey letter is a response from Danny Sullivan, who Harkey refers to in his message.

In the email, Harkey complains of a "never ending" court battle but fails to disclose that the long trial delays were by Dan Harkey's own hands. He and his counsel's refusal to comply with over 18 Motions and related Court orders compelling him to produce documentation, not making himself and employees available for depositions, created more delay than any other aspect of the case against him to date. The case could and should have been done years ago.

With respect to "relentlessly torment, badger, and harass Point Center and its employees", I wish to quote Shakespeare: "The lady doth protest too much, methinks." Many investors, not just plaintiffs in the current civil trial, believe they were defrauded and have demanded that Harkey abide by his "absolute obligation to repay". Many investors are confused about the creation of CalComm Capital and what role it played in their investments. Many investors wanted to talk to their counterparts about Harkey's fees and management practices but were told to pound sand. These people have every right to be upset,  challenge Dan Harkey and his staff, demand, and receive the information that they requested comprehensively and in a tangibly useful format.

Dan Harkeys claims of "preferential treatment" is an empty dodge designed to misdirect your attention from his own unjust enrichment. Freezing investor assets while paying himself fees in itself compromises the preferential treatment that he proclaims. Doesn't paying his wife, Assemblywoman Diane Harkey, from assets frozen to investors seem like preferential in treatment?

But isn't the civil lawsuit like preferential treatment? No. The civil lawsuit is about seeking justice. The plaintiffs wanted to approach each investor but their efforts to acquire Point Center Financial's investor contact list was blocked by Dan Harkey at every turn. Furthermore, many investors at that time were kept distracted by events in residential real estate and were not willing to consider the core issues the civil lawsuit contemplated.

With respect to the constant waste of your money Harkey had no business paying his legal expenses from investor funds. Anyone experienced in business maintains errors and omissions insurances and/or contingency reserves paid from profits. Investor money was not Harkey's to dip into as he saw fit. To actually speak of wasting your money is equivalent to an admission of Harkey's inappropriate use. Furthermore, if plaintiffs in the civil case prevail, investor funds are excluded from collection because they are investor property held in trust.

Harkey uses ancient history not relevant to the current issues at hand. He speaks of a 1996 LA Times article, he blames the real estate industry, he refers to email "extracts" from 2008 from targeted investor plaintiffs that he calls "disgruntled". If you knew then what you know now, wouldn't you be disgruntled?

The letter from Lee & Associates raises an interesting issue. Who is the buyer? Has Dan Harkey ever revealed to investors who the buyers are, the selling price, details of the sale, how much back taxes are due, what the agent/broker commissions are, or who will be receiving the proceeds? If history is any example, the answer is no. Why? Because ignorance is bliss and Dan Harkey is counting on complete investor submission regardless of the outcome.

The email from Mark Van Mourick of Optivest to the Orange County Register's Morgan Cook is no more than a put-up job from a Harkey Crony who admittedly worked with Dan Harkey for over 20 years, contributed thousands to Diane Harkey's political campaign, and was paid by Harkey to bring investors into Point Center (above and beyond what he earned in investor commissions.) Mr. Van Mourick never examined plaintiffs evidence and he failed to disclose that his meeting with plaintiffs' counsel was for his deposition. Like his friend Dan Harkey, Mr. Van Mourick was recently sued by a Point Center investor for fraud. His credibility is suspect. Birds of a feather...

We'll examine another Harkey misdirection, the "economic meltdown" in another posting on another day in detail. Suffice to say that predatory commercial lending and loan servicing practices bears little relationship to the implosion caused by the residential lending community and their loan bundling/rating practices. The reality is that banks that failed or were seized did so because they did something wrong. Harkey is trying to sell you the sizzle without giving you the meat. Where's the meat, Dan?

At the close of Harkey's letter he refers to two contrived investigations. Harkey maintains both web sites at Point Center in Aliso Viejo, CA and both are designed to misdirect your attention from his depleting your assets to pure rubbish. The sites use typical political hack techniques to personally denigrate their target. You should ask yourself three questions: What is the credibility of the information presented, why do I care about this other investor, and what if anything has Dan Harkey done to live up to his "absolute obligation to repay" me?

Harkey's tactic to entice investors to contact plaintiffs counsel would be humorous if it wasn't so sad and pathetic. Here the man who claims to be "embroiled" in a "never ending battle" inappropriately using fear tactics to manipulate investors (and by proxy plaintiffs' counsel). He coins the fear-phrase "preferential representation" then feeds it to you as an imperative. This isn't a game. It's very serious business and the stakes are high. A success in the civil action against the Harkeys and Point Center lays important ground work for the benefit of other investors.

Please read on...


From: Dan Harkey <dharkey@pointcenter.com>
Date: Tue, Mar 12, 2013 at 3:20 PM
Subject: Attention All Point Center Investors
To:

Please review the attachment

--------------------------------------------

Dear Investor,

As you are well aware, Point Center Financial has been embroiled in what seems to be a never ending battle with a small band of disgruntled investors for the past five years. This group is led by Lloyd and Stella Charton.  Lloyd’s group continues to relentlessly torment, badger and harass Point Center and its employees as though some miraculous new result will be achieved that will gain them special and preferential treatment. Point Center continues to treat all investors equally and will not give in to their requests to get their money back sooner and in larger amounts than that which other investors are entitled. This constant persecution wastes the time and money of all parties including Point Center, you and the perpetrators themselves.

This methodology is what Charton is noted for.  In a 1996 article from the Los Angeles Times Lloyd Charton is “Noted for Splashy Tactics”. An excerpt from the article reveals “The splashy case, replete with lawsuits, suggestions of possible criminal wrongdoing and sensational media coverage, has inspired a classic Lloyd Charton performance.” And “Charton, who has hosted his own radio show and carries press credentials, has made a living with unexpected moves that throw opponents off balance.”

Does this sound familiar? The only problem for Lloyd is that his strategy is backfiring on him. Enough research discloses the truth. Lloyd and Stella’s group, including Steve Cash, Kurt Sipolski and Danny Sullivan may want to re-assess their sleazy tactics.

You will see by the attached letter from Lee & Associates that you and your fellow investors are about to lose a viable sale. It seems that either Mr. Cash cannot be controlled by his lawyers in getting him to cooperate so that your property can be sold, or they and Lloyd are using Mr. Cash to create disruption. In any case, the inability to sell your property costs Mr. Cash’s fellow investors money. Very ironically, not only are the investors being held hostage by him but so are his fellow plaintiffs who share the same investments and coincidentally the same attorney. Perhaps the old adage “the enemy of my enemy is my friend” doesn’t quite fit.

Point Center cannot just sit idly by when it receives the vitriolic communications such as what was received from Danny Sullivan last week. Excerpts include that I “… should fade off into existence before you get thrown in jail and raped” and “When things get bad for me I say – at least I’m not that piece of shit Dan Harkey. I will smile the day you die Dan.”

In response to him we wrote: “A few like you want to blame me for the largest economic meltdown since the Great Depression. People like you will not admit that the borrower who owned real estate defaulted, not point center. Your hatred is like most who refuse to take responsibility for their decisions. I like you have lost. However, in your case I would like you to agree to subordinate the return on capital to Lloyd. He is your savior, your lord, and guides you. All his correspondence is about preferential payments to him and not you. Please acknowledge this is ok.”

You would think that Lloyd and Stella’s group would turn to their own lawyers rather than spew venomous comments. This is evidence that Grant, Genovese & Baratta have lost control of their clients as they fail to rein in their use of email and My PCF for filthy, down and dirty purposes.

We have completed and attached a synopsis of the economic events and what famous people had to say before, during and after the start of the mid 2007 meltdown. How could anyone expect Dan Harkey and Point Center to have advance awareness if many famous economists and leaders in the USA did not?

You are encouraged to contact Catherine Convey-Harrison to quit the games. Express the urgency of getting your investments back now rather than allowing Charton etal. to gain preferential representation over you. Her contact information is:

Catherine Convy-Harrison, Esq.

Chad J. Brandel, Esq.
Grant, Genovese & Baratta, LLP
2030 Main Street, Suite 1600
Irvine, CA 92614
Telephone:  (949) 660-1600
Facsimile:   (949) 660-6060
Email:  catherine@ggb-law.com”

We will continue to provide you with updates as we obtain them. We also invite you to view www.lloydchartoninvestigation.com and read about the Lloyd and Stella Charton Retreat investigation at  www.theretreatinlagunainvestigation.com. Thank you for your continued confidence and support.

Best regards,

Dan Harkey

President

Point Center Financial, Inc.

7 Argonaut │ Aliso Viejo, CA 92656 │ Toll-free: 1-800-544-8800 Ext. 6201 Direct/Fax: 949-276-6201 www.pointcenter.com

Real Estate Broker - CA Dept. of Real Estate #00745721

Join me on LinkedIn: http://www.linkedin.com/in/danharkey

Attachments:

Van Mourick (Optivest) email to Morgan Cook (OC Register)
Hart (Lee & Assoc. broker) letter to McNamee (realtor)
Major Economic Events v2_final - (Harkey)
Harkins email to C. Convey-Harris (GGB)

UPDATE: Danny Sullivan has granted us permission to publish his response to the above letter from Dan Harkey:

On Mar 12, 2013, at 6:13 PM, Danny Sullivan <{redacted}@yahoo.com> wrote:

Thanks for the email Dan. Next time, just pass on all of the emails for the rest of the investors and I can cc them on everything we discuss. I'm not at all concerned with what I wrote and only you know the truth Dan. You've committed fraud and you obviously are twisting the truth at this point to futher disrupt the due process. What I fail to understand is if we're the ones stalling, why did PCF file BK?

The fact that other investors failed to sue you exhibits how clueless they are about what you've done. Those of us who are seasoned through the school of hard knocks know better than to turn a blind eye to the corruption that has gone on here. As far as my attorneys losing control of their clients, I do not answer to them. I am my own individual and I wanted to speak my mind to you personally. I'm glad you responded because now I've gotten you to reflect a little bit and you lashing out in defense tells me I'm in your head. 

Apparently you do not recall our conversation that I quoted in my deposition from 2009 regarding liquidating these dwindling assets. Your exact quote at that time was to "put on my big boy pants and make a big boy decision, pony up the cash calls, and hold the property." You also had stated you had people that would buy out my position for 20k - pennies on the dollar in your words  (I had 72k in.) You never performed Dan and I ended up with a whopping 3 cents on the dollar. I don't think there's much more damage you can do than that to investors. That reeks of failure and even the most distressed assets I sell are nowhere near that level of losses. The only losses that were that bad were part of Jay Miller's mess and Estate Financial's fallout, all of which was fraught with corruption and deception. Which means DCP and likely your other loans were filled with.... Inflated appraisals, collusion, corruption, short funded loans, impounds that weren't there as advertised, etc.etc etc. I don't really care if you put me on blast to the world Dan. No one knows me and no one cares. It just looks more and more like you are trying to scramble which means at least now I am getting to you.

You asked me the other day if the DCP loan was my only concern. Are you admitting you screwed up then? I have no interest in any other loans and I did not invest in other loans, so why should I be concerned with other loans? I am too busy trying to make up for the losses I've incurred so I can't spend my life chasing you down and researching every wrong move you made. What I do know is that I lost my ass on this deal and PCF did not heed any warnings that I had expressed early on. Ultimately, it took years to finally foreclose and then you guys gave yourselves a 150% raise upon taking back the property as an REO. After a few years of bobbling the property and managing dirt, you finally sold it at the rock bottom of the market for a paltry 4 million when the original appraisal reflected 72M in value. That's a pretty big disparity in my opinion, one which you cannot blame on the market.

I'm not trying to start a pissing match with you. We obviously disagree and that's fine by me. I'll let the attorneys and the court handle it at this point and you can go back to whatever you were doing as well. In the meantime, consider for just a second how many lives you've affected. If you have no soul then it won't affect you. In hindsight, I take back what I said. I won't smile when you die and that was wrong to say. I forgive you for you were lured by greed and self preservation. I hope someday you concede that you made a wrong decision and ask your maker for forgiveness.

Danny Sullivan