Embattled real estate player Valerie E. Kaan has purchased several units at The Oaks, a condominium development in Malden.
Valerie E. Kaan has returned. In a way.
The Massachusetts native, charged with helping her felon boyfriend illegally rebuild his real estate empire, is back doing deals in the Bay State nearly two years after departing for Florida. According to records at the Middlesex South Registry of Deeds, Kaan has acquired several units in The Oaks condominium project in Malden, a two-building property located just outside the city’s downtown district. Beyond marking Kaan’s first acquisitions locally since 1999, the deals have brought together some of the same parties embroiled in her battle with the federal government.
In a civil action initiated by U.S. Attorney Donald K. Stern’s Justice Enforcement Team, Kaan and three former confidantes of William W. Lilly are accused of helping the self-described “Condo King” acquire real estate in diverse locations ranging from Massachusetts to Florida while Lilly was incarcerated at Allenwood Federal Prison Camp in Pennsylvania. Lilly, who owes the Federal Deposit Insurance Corp. $5 million for defrauding two banks during the late 1980s and early 1990s, now lives with Kaan in a $3.6 million mansion in Boca Raton, Fla.
One of the players cited in the JET case, Boston attorney Robert G. Kline, figures prominently in the recent Malden dealings, with his Regal Funding Corp. providing $630,000 for Main Street LLC to buy 783-795 Main St. last June from Stratford Management Corp. Regal was instrumental in funding Kaan’s earliest purchases in Massachusetts, beginning with a lone condominium unit in Charlestown in 1993. In one instance in South Boston, Regal provided $330,000 for Kaan to purchase several condominium units in that community. Kline was Lilly’s attorney in the 1980s.
Calls to Kline were not returned by Banker & Tradesman’s press deadline. Also not responding were Christopher McKinney and Richard J. Arnone Jr., whose Lynnfield office is home to Main Street LLC and also answers the phone for The Oaks, the name given for the condominium project. McKinney is listed in registry documents as having been given limited power of attorney to buy units at the project on behalf of Kaan, while Arnone is cited as manager of Main Street LLC.
It is unclear what, if any, connection Kaan has to Main Street LLC, with the Massachusetts Secretary of State’s Office stating that it only has Arnone in its database. Arnone is, however, named in several transactions Kaan has done in Florida, while she lists McKinney’s and Arnone’s office at 200 Broadway in Lynnfield as the address of several companies she currently operates in Florida, including the recently formed Las Olas LLC.
In addition, two former employees of Kaan’s Florida development company claim McKinney has played a longstanding role in the firm’s financial matters.
“Nothing gets approved without going through Chris first,” one of the former employees told Banker & Tradesman. “He’s got his finger in everything they do.”
‘Interesting’ Deals
If there is a direct connection between Main Street LLC and Kaan, it would mimic a pattern uncovered recently by Banker & Tradesman in Florida, with Kaan repeatedly acquiring condominium units or land parcels already purchased by her own company, obtaining more than $1 million in mortgages through that process. In some cases, she has then formed another entity that buys the property back a third time. The matter is now under review by the Florida Division of Banking.
Locally, Kaan has acquired several of The Oaks condominiums directly from Main Street LLC, purchasing Unit Nos. 793-2 and 793-8 in late March. The $125,900 purchase of No. 793-2 was financed via an $86,100 loan from the Sherwood Group. The Worcester company also loaned $86,800 to Kaan to buy No. 793-8 for $126,900.
Last month, Sherwood loaned $74,000 to Kaan for the purchase of Unit No. 7 at 785 Main St., and a similar amount for her $105,900 purchase of Unit No. 1 at 783 Main St. Washington Mutual Bank has also helped Kaan acquire condominiums in the 20-unit development. Efforts to contact Sherwood officials were unsuccessful by Banker & Tradesman’s press deadline.
JET chief Christopher Alberto said last Friday that he was unaware of the Malden deals. Alberto called the transactions “interesting,” and said they would likely be included in the agency’s review should a receiver be appointed to analyze Kaan’s holdings. A hearing to do exactly that was slated for last week, but has now been postponed until Thursday, May 31. Alberto would not give a reason for the delay, although Kaan has vigorously fought previous efforts to have a receiver become involved.
JET had been negotiating since last autumn on a settlement which would have Kaan repay her boyfriend’s $5 million levy, but those talks broke down several weeks ago. JET is now moving to appoint a receiver, Alberto said, “to make sure there is enough money to satisfy the judgment.”
Should a receiver be named, “Malden would become relevant to the case,” Alberto said, but added that he is confident the government already has enough evidence to pursue the matter. Besides Stern’s office, other federal agencies involved in JET include the FDIC, the U.S. Marshall’s Office and the U.S. Probation Office.
Kaan’s attorney, Thomas E. Dwyer Jr., would not discuss the Malden transactions, but said he does believe “the [restitution] matter is very, very close to final resolution,” indicating that his client is still hopeful of a negotiated agreement. Currently, he said, “We are attempting to establish some ground rules in order that there be a further opportunity for a final settlement.”
Dwyer also disputed the notion that JET wants a receiver to be appointed, calling it a “misnomer” given that a receiver is typically hired to take control of a subject’s assets. Calling Kaan’s assets “highly collateralized,” Dwyer said he does not believe that is JET’s intent.
