Bay Communities plans to develop a seven-story, 34-unit luxury residential building in Highland Beach, Fla., which will be called Azure Highland Beach.

BOCA RATON, Fla. – In Boston, everybody seemingly knew his name, but things are apparently much different for William W. Lilly in his new home here on the eastern coast of Florida. The self-professed “Condo King,” whose luxurious Massachusetts lifestyle was supplanted with a five-year prison sentence during the early 1990s, garners little recognition by locals ranging from public officials and civic leaders to real estate brokers and others in the Greater Boca business community.

“Doesn’t ring a bell,” Robert Dawson of the Highland Beach planning department told Banker & Tradesman last week in response to inquiries about Lilly. A tiny sliver of terra firma barely an eighth of a mile wide, Highland Beach is the home of a new residential project planned by Bay Communities, the Massachusetts real estate company that Lilly’s longtime girlfriend, Valerie Kaan, ostensibly launched in the early 1990s while Lilly was jailed at the Allenwood Prison Camp in Pennsylvania.

Bay Communities is pushing ahead with the seven-story, 34-unit building amidst efforts by the federal government to wrest more than $5 million owed by Lilly for helping cause the collapse of two banks during the real estate crash of the late 1980s. The Justice Enforcement Team of the U.S. Attorney’s Office in Boston maintains that Lilly was the driving force behind Kaan’s amazing rise to fiscal success, and claims he is merely using the Winthrop native as a straw to avoid repaying the hefty fine.

But while the saga of Kaan and Lilly is well known in Massachusetts, most of those spoken with last week in Boca Raton and other local communities said they know little about the mystery man who occasionally appears at local events, as Lilly did last summer at a convention sponsored by Arvida Realty Services.

Arvida, a leading real estate firm in Southern Florida, is assisting Bay Communities in marketing what is being called the Azure Highland Beach development. Arvida Realtor Geri Penniman, who works out of the downtown Boca office, said she has “no idea whatsoever” about Lilly or his past, despite Bay Communities’ involvement in a major gated community in Boca, The Sanctuary, where Lilly and Kaan now live along with their two children and her family.

“I never even heard of Bill Lilly,” added Robyn A. Friedman, a reporter for the local SunSentinel. Friedman wrote a story last month regarding the Azure development. Friedman said her only contacts were with Kaan and her brother, Ronald Kaan, who is serving as marketing director for the project.

Maxine Adler, the head of a Florida public relations firm whose release prompted Friedman’s story, said she has met Lilly, but acknowledged that, “I know very little about Bill’s past.” Although she declined to discuss the matter, Adler stressed that she is terminating her business relationship with Bay Communities as of this week.

Dispute Resolution
Lilly’s Floridian anonymity is certainly in stark contrast to the image he enjoyed during the 1970s and 1980s, a time in which he developed thousands of condominium units in New England. Living in a luxurious mansion in Marblehead, Lilly shared matching Rolls Royces with his former wife, held flamboyant parties and constantly promoted himself to anyone who would listen.

But while he is seldom seen or heard amongst the ubiquitous palm trees and pastel-colored properties which dominate the Florida coastline, Lilly is hardly a non-entity there, at least according to JET. In a civil complaint filed last fall, the compilation of federal law enforcement agencies charged that Lilly merely relocated his operation from Massachusetts in the autumn of 1999 and “now operates his multimillion-dollar real estate business from his Boca Raton residence.”

To support its charges, JET filed a series of documents that include transcripts from thousands of telephone calls made by Lilly during his incarceration between 1993 and 1997, after which he was released on probation and moved into a $500,000 mansion in Lynnfield. Among the transcripts are conversations with former Lilly colleagues William F. Hawkins, Robert G. Kline and Richard G. Kayne, a felon who now lives just down the street from Lilly and Valerie Kaan in Boca Raton. Harkins, Kline and Swampscott contractor John Thompson are listed as co-conspirators in the alleged effort to hide Lilly’s assets.

Prior to the creation of Bay Communities, Kaan had been virtually destitute, borrowing money from friends and even getting evicted from a Lynnfield home as she pursued a career as a ventriloquist. According to JET, Lilly convinced Kaan to obtain her real estate sales license, then had her funnel pictures of buildings to purchase to him at Allenwood, telling her how much to bid and then leading the marketing and sales efforts of those properties from jail.

Under threat of additional legal action, Kaan and Lilly have agreed to pay the restitution in full, and are currently in negotiations with JET on a final agreement. JET chief Christopher Alberto declined comment last week on the status of that situation, while Kaan’s attorney, Thomas E. Dwyer Jr., said through a spokewoman that it is his understanding that “all disputes between the federal government and Valerie Kaan and, for that matter, Bill Lilly as well, will be resolved within the next two to three weeks.”

In the meantime, Bay Communities is pushing ahead with the Azure Highland project. The Kaans have been telling local officials that they will proceed with construction even before the units have been sold. The properties will range in price between $529,000 and $1.5 million-plus, according to a sign in front of the parcel.

Most of the other information about Bay Communities appears to be coming from behind the walls of The Sanctuary, inside which Kaan and Lilly live in a $3.6 million mansion. Arvida representative Jan Fierst said she was told that the company has developed housing up and down the East Coast, and is supposedly still based in Lynnfield. Fierst said that she met Lilly at the Arvida convention, but was not apprised of much detail regarding his relationship with Kaan or Bay Communities.

“I know they have a very good reputation up [that] way,” Fierst said.