An attorney for Quincy auctioneer Daniel Flynn III said he “vehemently denies” allegations of financial misconduct that have resulted in a series of judgments against Flynn topping $6.1 million since March.
The civil lawsuits were filed by former business partners of Flynn and investors in Quincy-based Opportunity Holdings LLC, which Flynn founded in 2008. A New Jersey man also is seeking to collect a $1.4 million judgment issued against Flynn in that state on Feb. 27.
Attorneys for construction company Lee Kennedy Inc. of Quincy have asked a judge to add 18 limited liability companies formed by Flynn as defendants after winning a $900,032 judgment against Flynn on April 13. The company claimed “there is a significant danger that (Flynn) will convey, conceal or dissipate assets.”
Lee Kennedy Inc. loaned Flynn $600,000 in April 2011 at 18 percent interest and never was repaid, according to a lawsuit the company filed in September 2012.
Flynn’s attorney, Francis Crimmins Jr. of Stoughton, said Flynn and his various companies have not transferred any assets they control in the past year.
“Dan Flynn is not trying to ‘make himself judgment-proof.’ He merely owns properties under separate limited liability companies as do most real estate investors,” Crimmins wrote in an emailed statement to Banker & Tradesman.
Flynn is founder and CEO of Daniel J. Flynn & Co., a Quincy real estate auction house that thrived during the real estate downturn. The lawsuits against Flynn, however, relate to his other role as a real estate investor and his use of investors’ and business partners’ funds.
Attempts to collect the damages hinge upon whether plaintiffs can locate and confirm what assets Flynn currently holds.
“It appears that Flynn has attempted to make himself ‘judgment-proof’ by using a variety of legal entities to hold title to his assets,” attorney Patrick Hannon of Boston argued in a September 2012 court filing. The plaintiff in that case, Jay Derenzo of Needham, won a $115,000 judgment on March 12 for a loan to Flynn that was not repaid.
Derenzo’s current attorney, Joshua McGuire of Newton, said Flynn did not attend a scheduled deposition this summer.
“We were seeking some post-judgment asset discovery and subpoenaed both Flynn and a representative from the auction company, and they didn’t show up,” McGuire said in an interview. “So my next step is to try to get a judge to order him to appear.”
‘Making Whole’
Crimmins, Flynn’s attorney, said Flynn did not appear at the deposition because of a scheduling conflict.
“(Flynn) has every intention of making whole the partners who shared the risk in this investment with him,” Crimmins said.
Two of the lawsuits claim Flynn intentionally failed to record mortgages at the Registry of Deeds so that he could take out additional loans on the same parcels.
The largest judgment of $2.8 million against Flynn stems from his management of the DJF Real Estate fund, which he co-founded in 2008 with hedge fund manager Alec Petro of Duxbury. Petro and a group of 25 limited partners claim Flynn used their money to buy a condo complex in Quincy for $2.4 million in February 2011 without telling them. Flynn allegedly transferred the title to a newly-formed company that he controlled. He then granted a mortgage on the property to another party to whom he owed money, the lawsuit stated.
Additionally, Flynn issued checks from the DJF Real Estate Fund to individuals and entities under his control, and created at least seven phony promissory notes that the fund purchased for a total of $2.3 million, according to the lawsuit.
A separate lawsuit filed in October 2012 claims Flynn intentionally failed to record a mortgage on a Boston parcel so he could use the property as collateral on another loan.
The complaint states that Shaughnessy Real Estate Investments LLC of South Boston loaned Flynn $200,000 in July 2009 and Flynn agreed to repay $230,000 by January 2010. The loan was supposed to be secured with a mortgage on 116 Quincy St. in Boston, it states.
“Flynn intentionally failed to record the mortgage so that he would have the ability to pledge the property as collateral for another loan without the Shaughnessy mortgage appearing on the title,” it alleged.
Flynn did not file responses to the lawsuits, resulting in the court issuing default judgments against him. In a statement to Banker & Tradesman in August, Flynn said his attorney was unable to work due to health problems.
Crimmins, his new attorney, issued a statement Sept. 9 on Flynn’s behalf.
“Dan Flynn vehemently denies these allegations and looks forward to resolving the matters,” the statement said.
Meanwhile, a new lawsuit filed in Norfolk Superior Court on Aug. 5 by plaintiff Dennis Clarke seeks to collect a $1.4-million judgment issued against Flynn on Feb. 27 in New Jersey. On Aug. 22, Judge Kenneth Fishman approved a $1.5-million attachment on all real estate owned by Flynn in Norfolk County.
Flynn’s address is listed as 211 Dudley Lane in Milton, where an 8,000-square-foot mansion built in 2007 is assessed at $1.66 million. His wife Margaret is listed as the owner.
