Former Massachusetts developer William F. Harkins now resides at this Florida estate, located at Hammock Dunes just north of Daytona Beach.

PALM COAST, Fla. – It is hard to say just how lightly William F. Harkins traveled when he departed Massachusetts for Florida in the mid-1990s, but he certainly left a lot of baggage behind.

Not making the move to his new home just north of Daytona Beach was acknowledgment of a failed real estate business saddled with foreclosures and bankruptcy filings, a bill of more than $40,000 for unpaid child support and charges that Harkins smuggled 750 pounds of marijuana into Lawrence Airport in 1993.

Upon arriving in Florida’s Flagler County in 1997, the ruddy-faced Irishman cast himself as a wealthy pilot and devoted family man scoping out real estate opportunities along the Sunshine State’s Atlantic coastline. Almost overnight, he became immersed in the local fabric, coaching lacrosse at the Palm Coast high school, becoming active in the Catholic Church and aggressively raising funds for Flagler’s Republican Party political machine.

“He’s well established within the community,” Flagler County Republican Party Chairman Patricia Sloan-Jones told Banker & Tradesman in an interview last year. “I can’t say enough nice things about Bill and his family.”

Reached again last week, Sloan-Jones refused to comment further on Harkins, except to insist that she still considers him “a good guy” and pillar of the community.

But the federal government offers another view of Harkins, claiming that the 52-year-old president of Palm Coast-based Bay Communities Real Estate Inc. is actually a front for felon William W. Lilly. In pressing the self-professed “Condo King” to pay more than $5 million in restitution owed for real estate crimes committed in Massachusetts more than a decade ago, the U.S. Attorney’s Office in Boston claims Harkins is one of four cohorts who helped Lilly illegally rebuild his real estate empire while jailed at a federal prison in Pennsylvania.

“Our complaint alleges [Harkins] conspired to assist Lilly in concealing his multimillion-dollar real estate business,” Assistant U.S. Attorney Christopher Alberto reiterated last week, adding that the agency continues to pursue the matter even though Lilly agreed last month to repay his overdue levy.

Harkins has yet to sign a decree allowing the statute of limitations in the government’s case against him to be extended until Lilly completes his repayment schedule during the next five years. Harkins has not yet retained an attorney, said Alberto, who vowed to proceed to trial within 60 days if the extension is not signed. Meanwhile, the specter of whether criminal charges will be filed in connection with the alleged conspiracy continues to linger over Harkins and Lilly, as well as the others involved in the recent civil action. Those include Lilly’s girlfriend, Valerie E. Kaan, Boston attorney Robert G. Kline and Swampscott contractor John P. Thompson.

Harkins, the government charges, was involved almost from the outset in Lilly’s prison-based operation. In several 1996 telephone transcripts made while Lilly was at Allenwood Federal Penitentiary, the convict and Harkins are overhead discussing real estate deals in Massachusetts. At one point, with Lilly angry about the slowness with which one transaction was proceeding, Harkins is overheard saying, “Tell me what you need … I’ll go do it.”

The pair later discussed the acquisition of several dozen condominium units at a project in Amesbury, of which Kaan later emerged as the registered owner. Harkins, according to the charges, arranged for a straw named Mohammed Khurso to buy the units from Boston developer Jonathan Davis before flipping them to Lilly’s Bay Communities. According to law enforcement transcripts, when Lilly states that Davis would never complete the deal if he knew the convict was behind it, Harkins responds by saying, “That’s why I’ve never told Mohammed who it was. He [and] everyone keeps wondering who I run over to grab the phone from.”

In the tapes, Harkins does little to hide his disdain for Kline, an attorney with whom Lilly had done business with for several years prior to his conviction. He relays one instance in the Khurso property flip when he had finished speaking on the phone with Lilly. “I said, ‘Here’s how we’re going to do the deal,’ and Valerie and Kline are standing there just nodding their heads,” Harkins relays to an amused Lilly.

According to the federal government, Lilly made nearly 10,000 phone calls from prison during one 10-month period in 1996, including nearly 500 to phones in Harkins’ name. At one point in another transcript, Harkins remarks to Lilly that, “The only thing I want outta all this: forget the money … when the book comes out, I want one chapter.”

‘Beautiful Homes’

Harkins did not return several phone calls made last week by Banker & Tradesman and was not available during a recent visit to the Bay Communities headquarters in Palm Coast. According to former employees and residents who have dealt with him at several Flagler County developments owned by Bay Communities, Harkins is prone to fancy automobiles and holding lavish parties at his home in Hammock Dunes, a gated community where he lives with his wife, Donna J. Harkins, and their children.

Harkins projects the image of a high-flying millionaire, according to local observers, although Bay Communities has had persistent problems paying contractors and service providers for work done on various projects. Despite the display of harmony in the home, however, at least one former employee claims she and Harkins had an 18-month affair soon after he arrived in the area, one that lasted until she broke it off last year to get married. That employee, Karen Salle, was subsequently fired and is now involved in a legal action against Bay Communities. A sexual discrimination lawsuit is part of the filings.

Salle, whom Kaan’s lawyer last year claimed is unreliable, nonetheless continues to stick to her version of the events. As with other employees, including former marketing manager James Fleming, Salle insists that Harkins consistently took marching orders from Lilly in business matters related to Bay Communities, all the while denigrating Kaan’s role in the operation.

Although Kaan ostensibly is the main principal in Bay Communities, supposedly controlling an operation that has purchased more than 750 properties from New England to Florida since 1994, Salle said Harkins regularly concurred with the government’s contention that Kaan is merely a front for Lilly, who is banned from working in real estate and banking due to his 1991 conviction. “He used to tell me she doesn’t know anything about real estate,” Salle said, adding, “Bill Lilly runs everything.”

Salle said Harkins also often inflated his professional background. For example, he cites his involvement as the successful developer of Governor’s Park in Winthrop, Kaan’s hometown, although that particular condominium project was one of the biggest apartment conversion busts of the real estate crash of the late 1980s and early 1990s in the Bay State. Most of Harkins’ Massachusetts companies ultimately were dissolved, and his activities led to property foreclosures by the Federal Deposit Insurance Corp., the agency to whom Lilly owes the $5 million restitution.

Harkins was one of eight men indicted in 1994 for importing marijuana into Massachusetts. Although most of the others were ultimately convicted, Harkins was acquitted in a second trial after a hung jury was unable to convict him in an earlier trial. Prior to that verdict, Harkins discussed the case with Lilly in a prison phone call, telling the Condo King that he planned to testify that, “I did it, but I didn’t know I did it.”

Another legal issue that followed Harkins to Florida was the child support bill, funds owed as the result of an affair he had that produced a child. The Massachusetts Department of Revenue, which is charged with pursuing cases of deadbeat parents, placed a lien for $40,875 against a home Harkins resided in with Donna J. Harkins in Andover. DOR spokeswoman Nicole St. Peter told Banker & Tradesman last summer that the 1998 lien was still active, but it was unclear last week whether the debt had been paid. Registry of Deeds records do show that Donna Harkins subsequently sold the residence in 1999 for $270,000. Ironically, the home at 15 Sagamore Ave. was once owned by Mark and Gina Lunardo, a couple who aided Lilly in an illegal property-flipping scandal in the early 1990s for which the Condo King was also later found guilty.

Despite the child support issue, those who know Harkins say he unabashedly exudes the image of a rich developer in Palm Coast, rubbing elbows with the local elite and driving expensive automobiles, including a vintage Thunderbird he has been seen in of late. In one letter penned to Catholic Bishop John J. Snyder in 2000, head of the St. Augustine Diocese, Harkins relays how he has “secretly always wanted to be asked by a bishop to assist in fund-raising or donating my talents and money.”

“I have owned many millions in real estate, beautiful homes, airplanes, Rolls Royces,” Harkins writes. “However, none of this has brought me as much joy internally than to be approached by you and asked to assist in helping the Church; truly, it is a dream come true.”

Massachusetts Developer Polishes Image in Florida

by Banker & Tradesman time to read: 6 min
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