Christopher Alberto – Case not settled
Despite confusion on whether a $5 million civil action against felon William W. Lilly and developer Valerie E. Kaan had been resolved, U.S. District Court Judge William Young agreed last week to reopen the government’s case against the pair and two other men.
“This case was reported settled,” Young told Assistant U. S. Attorney Christopher Alberto at the outset of the hearing last Thursday in Boston’s John Joseph Moakley federal courthouse. But while that belief apparently led to the case being closed earlier this year, Alberto said the notion was incorrect.
“I don’t know who reported that,” said Alberto, who heads up the Justice Enforcement Team, which is pursuing the matter against Kaan and Lilly. “The United States attorney certainly did not.”
According to Alberto, JET thought it had reached an agreement with Kaan to repay the $5 million in restitution owed by Lilly, her live-in boyfriend, for real estate fraud committed in Massachusetts in the 1980s and early 1990s, during which time he adopted the self-proclaimed moniker of the “Condo King.” In the civil action filed last fall, JET charged that Lilly was actually the mastermind behind Kaan’s expansive real estate empire, one launched while Lilly was serving five years in federal prison. JET alleges that Lilly directed Kaan, an aspiring ventriloquist, on which properties to buy and how much to pay for them, as well as other related details.
Alberto told Young that a settlement had been drafted after months of negotiations, but that the deal fell apart in the closing moments when Kaan refused to sign the document. While Alberto did not say why, and declined comment later when asked by Banker & Tradesman, other sources have claimed that Kaan wanted the government to agree not to file criminal charges against her. In the civil action, JET calls the efforts to conceal assets a “conspiracy” amounting to an effort to defraud the government. Also named in the civil suit is Boston attorney Robert G. Kline and former Andover resident William F. Harkins, both longtime associates of Lilly.
In reopening the government’s action, Young gave JET 10 days to file a case management order, and said that he still plans to use the failed settlement as a starting point when the matter resumes. He would not elaborate on that point.
Neither Lilly nor Kaan appeared at the hearing. Both Massachusetts natives, the two now live in a $3.6 million mansion in Boca Raton, Fla., where they moved to in 1999, two years after Lilly was released on probation. Many of the projects run by Kaan’s real estate company, Bay Communities, and several offshoot firms are located in Florida, although she has recently begun buying property again in Massachusetts.
Kaan’s attorney, Thomas E. Dwyer Jr., declined comment regarding last week’s court actions, saying only, “What took place at the hearing speaks for itself.”
In 1991, Lilly was sentenced to five years in Allenwood Prison Camp in Pennsylvania, residing there between 1992 and 1997. During that time, Kaan suddenly began acquiring properties with financial backing from Kline. She later purchased real estate in New Jersey before turning her attention to the Sunshine State. Harkins appears to head up day-to-day operations at Bay Communities, although former employees and JET have both claimed that Lilly plays the lead role in the operation.
