BOCA RATON, Fla. – Valerie E. Kaan is apparently no fan of surprise visits, or so it seemed one recent Friday afternoon when the doorbell rang unexpectedly at her $3.6 million mansion here along Florida’s tony Intracoastal Waterway.
“Get out of here!” Kaan shouted upon being asked to respond to questions from Banker & Tradesman regarding her controversial real estate firm, Bay Communities. “Get out!”
Kaan’s interview ended there, with the Massachusetts native slamming the heavy wooden door in a deafening retort to a request to see her live-in felon boyfriend, William W. Lilly. It is unclear whether Lilly was home at the time, although the couple’s white Jaguar was missing from the circular brick driveway in front of the house.
Given that the residence at 646 Osprey Point Circle is tucked well inside the walls of a gated residential complex, The Sanctuary, it is understandable why its owner was caught off guard by the unannounced appearance at her doorstep. It is also possible that the casually dressed Kaan was angry for being disturbed at home in the middle of a workday in what may have been a rare respite from the rigors of running a multimillion real estate operation.
Subsequent efforts to contact Kaan’s attorney, Thomas E. Dwyer Jr., were unsuccessful by press deadline, but the response from Kaan did indicate she has no desire to discuss the ongoing maelstrom concerning Bay Communities and the federal government. In a complaint filed last autumn, a series of law enforcement agencies known as the Justice Enforcement Team charged that Kaan is merely acting as a straw in her role as owner of Bay Communities, with Lilly allegedly the true chief.
The impetus for the supposed deception, according to JET, is to help Lilly circumvent payment of a $5.1 million penalty owed to the Federal Deposit Insurance Corp. The fine stemmed from massive fraud perpetrated by the self-styled “Condo King” in the early 1990s involving two banks that had been financing his condominium development activities, most of which occurred in Massachusetts. A native of Revere, Lilly ultimately was sentenced to five years in Allenwood Prison Camp in Pennsylvania and is now serving five years’ probation.
The action against Lilly, Kaan and three colleagues was taken “to pierce the facade of false ownership meant to defraud Lilly’s victim of the restitution payments,” JET said in filing the charges. Kaan, who was destitute during the early 1990s, allegedly aided Lilly by mailing potential acquisitions to him while he was in prison and then bidding on properties in Massachusetts, New Jersey and Florida.
Lilly and Kaan have subsequently agreed to pay the fine, with the couple and JET supposedly nearing the end of those negotiations. U.S. Attorney Donald K. Stern has not indicated whether criminal charges will be pursued once the civil case is completed. His Boston-based office oversees the JET team, which also includes the U. S. Probation Office, the U.S. Marshal’s Office and the FDIC.
‘Top Dog’
Whoever the true owners are, Bay Communities is undeniably in an active development mode at present, its projects stretching up and down the eastern coast of the Sunshine State. According to a spokeswoman answering the phone at the firm’s Palm Coast headquarters, Bay Communities is converting a historic building in St. Augustine into condominiums; will break ground later this year on an eight-story, 190-unit project at Matanzas Shores in Palm Coast; and has acquired 167 house lots in Ponce Inlet, a seashore community just south of Daytona Beach. A hotel in Miami Beach will also be converted to residential uses, while a gated community in Palm Coast, also known as The Sanctuary, is currently under construction.
“We’re the top dog here,” said the saleswoman, who declined to give her name. The saleswoman said company President William F. Harkins was unavailable for comment. Harkins also turned down an interview by B&T at his Palm Coast office last week, and did not respond to subsequent requests to discuss the situation. Harkins is one of the three colleagues charged with helping Lilly conceal his alleged involvement in Bay Communities.
The saleswoman described Harkins and Kaan as “part owners” in Bay Communities, but said Kaan “very seldom” appears at the headquarters. Others referred inquiries about Kaan and Lilly to a Boca Raton phone number, with a company representative at the Matanzas Shores office also stating that Kaan rarely visits the property. Boca Raton is about 250 miles south of the Bay Communities headquarters.
While Bay Communities did recently begin marketing a 34-unit residential project in nearby Highland Beach, most of the activity is located outside the Boca Raton area. One local business owner who has worked with the company said last week that Kaan and Lilly typically held joint meetings, sometimes at their residence and others at the business owner’s offices.
The source, who requested anonymity and is no longer working with Bay Communities, said Lilly maintained a “strong” demeanor in the sessions. Although Kaan would also offer suggestions, the source said Lilly was usually an active participant.
“He was very forthright with ideas and plans and strategies,” said the source, who added that Lilly’s criminal past was never mentioned.
“It saddens me terribly,” said the source of having been involved with the company. “I just wish they would go away.”
Others have also encountered troubles with Kaan, including Stephen D. Linehan and the management of the Boca Raton Sanctuary development. Kaan and Linehan are embroiled in a legal dispute in which the plaintiff charges Kaan reneged on a $94,000 deposit when a planned purchase of Linehan’s home soured in 1999. Kaan has charged Samual Mina and Julie Ramos Giachetti with improprieties in the deal. Mina and Giachetti work for the owners of The Sanctuary, in which Linehan’s home was located.
Giachetti, a broker, was unavailable for comment, while Mina referred calls to his attorney, who did not return those inquiries.
