The yacht ‘We Won’ is pictured while docked at Rowes Wharf in Boston last week.
Living well is said to be the best revenge, but it is anyone’s guess what has prompted the recent moorings of a luxury yacht near the Moakley Federal Courthouse on Boston Harbor, a vessel entangled in the protracted saga of real estate felon William W. Lilly and his longtime girlfriend, Valerie E. Kaan.
Given the yacht’s eye-catching handle – the “We Won” – some observers suggest its arrival at Rowes Wharf is a subtle affront to U.S. Attorney Michael J. Sullivan, whose courthouse office is located barely 100 yards away from where the vessel has been berthed. The prosecutor has wrested approximately half of a $5.1 million restitution order imparted upon Lilly for real estate and banking crimes committed in the late 1980s and early 1990s, but the levy has apparently not been enough to quash the controversial couple’s ostentatious lifestyle, or so the “We Won” would seem to attest.
“There’s certainly a message,” opined one law enforcement official aware of the vessel’s presence at Rowes Wharf. “The audacity is astounding,” added the official, who requested anonymity.
The self-proclaimed “Condo King” spent nearly five years at a federal penitentiary in Pennsylvania, during which time he allegedly created a national real estate empire employing Kaan and several cohorts, including failed Massachusetts developer William F. Harkins and Lilly’s former attorney, Robert G. Kline. A consortium of companies led by Bay Communities Inc. has since acquired hundreds of condominiums, commercial buildings and raw land from Massachusetts to Florida. The entities list Kaan as the principal owner but federal officials have long claimed they are actually controlled by Lilly.
Charging that the operation was crafted to skirt the restitution order, Assistant U.S. Attorney Christopher Alberto and Sullivan’s Justice Enforcement Team (JET) forced Kaan in 2002 to agree to repay Lilly’s fine if he cannot afford the levy. A system was established where Kaan ostensibly submits the payment after Lilly defaults, with the schedule spread out over several years. In the latest go-round, in which $1.5 million was paid in April, Kaan submitted the check nearly a month overdue and only after Sullivan’s office threatened to begin seizing assets.
Banker & Tradesman has been unable to identify exactly who owns the yacht, a Ferretti that one tipster said had been purchased slightly used in southern Florida, where Kaan and Lilly now reside. A deck hand approached last week at Rowes Wharf declined to identify the owner or occupants and said no one was available to discuss the matter. A few hours later, the “We Won” had departed. Officials at Equity Office Properties, which owns Rowes Wharf, would not provide details on the vessel’s repeated stays at the hotel/residential complex.
No local sightings of Lilly have been confirmed since the yacht was first spotted at Rowes Wharf during the week of the Democratic National Convention, but one source insisted the Condo King has indeed been in the area of late while a law enforcement official familiar with Kaan reported recently seeing her lounging on the rear of the yacht.
Sullivan spokeswoman Samantha Martin and Alberto did not return phone calls regarding the yacht by Banker & Tradesman’s press deadline, but one source within the U.S. Attorney’s Office stated that the craft “didn’t go unnoticed.”
‘A Significant Act’
The same appears true outside Boston’s waterfront hall of justice. Several people have contacted B&T to report sightings, while one caller claimed the issue has been a hot topic among Lilly colleagues with whom the source regularly interacts. “It’s a big joke,” said the source, who requested anonymity.
Kaan’s attorney, Thomas E. Dwyer Jr., did not return phone calls by press deadline last week, but in an interview last month after the “We Won” first appeared, he insisted the civil settlement has yielded no resentment toward the government. “It was a very professional negotiation,” said Dwyer, although he also maintained that Kaan only opted to strike the agreement in order to put the matter behind her rather than being a tacit admission of guilt.
“She did not want to deal with five or 10 years of harassment,” said Dwyer, adding that “it certainly is a significant act for her to help her friend Lilly and pay the $5 million.”
Dwyer also boasted of his earlier predictions that there would be no criminal sanctions stemming from the case. In the civil lawsuit that led to the agreement, JET calls the Bay Communities operation a “conspiracy” and “scheme to defraud” the U.S. government, but Sullivan’s office has heretofore not filed any criminal charges against Kaan, Lilly or co-defendants in the civil case such as Harkins and Kline. As part of the civil settlement, the quartet did agree to waive any statute of limitations protections until the payment is made in full.
Rather than being a mock at Sullivan, Dwyer offered another potential target of the Ferretti’s name: Banker & Tradesman, which has run several dozen articles regarding Kaan and Lilly since 1997. “She [Kaan] beat you,” Dwyer said in speculating why the yacht was so christened. “Despite everything you did, she has won.”
According to Dwyer, the articles unfairly cast Kaan as a mere straw in Lilly’s plot to rebuild his real estate career when instead she was the true driver of Bay Communities’ rapid growth along the East Coast. “The company is all her doing,” said Dwyer.
In its filings, Alberto’s team provided documentation to demonstrate that Kaan was both unqualified and unmotivated to run such a large real estate operation. Along with phone transcripts from the federal prison in which Lilly is heard giving Kaan precise orders on how much to bid on properties, which contractors to employ and how to market assets, JET also submitted affidavits from colleagues of the couple further advancing its argument. In one instance, a nanny who cared for the couple’s two children from 1989 to 1994 said Kaan resisted Lilly’s efforts for her to get a real estate sales license, and charged that she was more focused on a career as a ventriloquist. “Valerie showed no interest in the real estate field,” said the nanny, Lisa Miller, describing her employer as “a passive listener” whenever Lilly called from jail with real estate instructions. In another deposition by Alberto, Kaan could not name the companies she had started, loans that she was seeking or projects involving Bay Communities.
Ironically, the morning Kaan was supposedly seen in the rear of the “We Won” at Rowes Wharf, her company was being denied a permit for a major condominium project just north of Daytona Beach. Dwyer declined to discuss that matter, and said he is not involved in any of Kaan’s Florida activities.
Even so, Dwyer vowed that there are no improprieties in his client’s Sunshine State dealings. Banker & Tradesman has several times detailed unusual real estate transfers involving Kaan and her various companies in Florida. The transactions have supposedly led to investigations at both the state and federal level, but Dwyer appeared unimpressed. “They are not going to find any problems,” he predicted, calling Kaan “a Class A player” in Florida.
Still, Bay Communities and other Kaan companies have been involved in countless payment disputes with employees, contractors and vendors, including an ongoing imbroglio in which several salespeople charge they have been denied commissions for units sold on the behalf of Kaan-controlled companies. In another instance, a homeowners association controlled by Bay Communities officers was sued by Wachovia Bank after it failed to return a $74,000 payment incorrectly wired to the organization. The payment was only made earlier this year after the local sheriff prepared to auction off a community clubhouse owned by the homeowners group.
Others in the homeowners group at Matanzas Shores in Florida’s Flagler County have criticized Bay Communities officials for failing to provide adequate documentation on expenses at the development, leading to a lawsuit and even a mass picket outside the firm’s headquarters in Palm Coast, Fla., when the guard detail threatened to leave for non-payment of nearly $100,000. An offer to discuss the various issues involving Bay Communities with Kaan was turned down by Dwyer. “There is zero possibility that Valerie Kaan will talk to you.”
