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Developer Dan Harkey sues Palm Desert victim

Several years ago, Sipolski invested about $150,000 into a real estate development deal led by Dan J. Harkey, CEO of Point Center Financial out of Orange County.  Last summer, Sipolski was one of about 40 plaintiffs who sued Harkey, husband of Assemblywoman Diane Harkey, R-Dana Point, for fraud. 

Kurt Sipolski, who says he now lives nearly from hand to mouth, is being sued for at least $50 million by the same person who he says drained his retirement options in a failed real estate deal. 

“Right now, I’m not quite sure about where I’m going to go,” said Sipolski, 67, of Palm Desert, speaking about his lack of legal defense options. 

Several years ago, Sipolski invested about $150,000 into a real estate development deal led by Dan J. Harkey, CEO of Point Center Financial out of Orange County.  Last summer, Sipolski was one of about 40 plaintiffs who sued Harkey, husband of Assemblywoman Diane Harkey, R-Dana Point, for fraud. 

After an almost four-month trial in Orange County Superior Court, Dan Harkey was found guilty of breaching his “fiduciary obligation” to his clients and doing so with “malice, fraud and oppression,” said attorney David Grant of Irvine.  He was ordered to pay $4.5 million. 

The jury awarded Sipolski $17,000 for elder abuse and $48,000 for breach of fiduciary obligation, according to Desert Sun reports at the time.  Sipolski said he has seen none of this money. 

Harkey, who was found not guilty on other charges, has since filed suit against Sipolski and others, alleging malicious prosecution and breach of indemnity agreement, according to the lawsuit filed in Orange County Superior Court on July 17. 

The suit alleges Sipolski and others “conceived a malicious scheme in or about 2007-2008 and continuing to date to destroy Plaintiff’s (Harkey’s) credibility and reputation in the private lending business.” 

“The key element in the scheme was to persuade other PCF (Point Center Financial) investors to become plaintiffs in a merciless fraud action filed against Plaintiff (Harkey); and to thereafter distribute the meritless action to the media or Internet in an attempt to destroy Plaintiff,” the lawsuit continues. 

Harkey is asking for damages no less than $50 million, punitive damages, indemnity including attorney’s fees and costs, among other awards. 

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“He’s just one of about 35 defendants that we’re suing,” said Jeffrey S. Benice, Harkey’s attorney, referring to Sipolski. “ All of the defendants who pursued Mr. Harkey for six years, purposely, who lost, are now being sued, as is Mr. Harkey’s right, and the other third parties that were wrongfully sued, as is Mr. Harkey’s wife, Diane Harkey, to recoup the fees and damages they suffered as a consequence of this group of people — about 35 people wrongfully suing Mr. Harkey. 

“Mr. Harkey is just pursuing his legal claims under the existing agreements that were all in place that governed the rights of the parties,” Benice added. 

Sipolski, who walks with a cane because of childhood polio, now lives on $654 a month in Social Security, according to a recent article in USA Today. 

“And he (Harkey) certainly knows that I’m living on a very limited income, and there’s no way I can even spare a quarter,” Sipolski told The Desert Sun on Thursday. 

“You cut out all the luxuries like dinners out and plays you might have gone to, and travel,” he told USA Today. “ Basically, you are home bound.  My car is an 11-year-old Saturn.  You can’t upgrade anything.  Chores I would have hired people to do, like gardening, I have to do myself.  The swimming pool I need for exercise.  Taking care of the pool is on my back.  Most of the time, I have to use a cane or crutches.”