Hertel and Fowler caught up in yet another scandal
March 5, 2009
By THE EDITORS
Securities and Exchange Commission investigators are probing California Assemblywoman Diane Harkey (R-Orange County), her husband Dan, and his hard-money lending company, Point Center Financial, regarding the Harkey’s relationship with R.W. Hertel and Sons.
The investigation is said to focus on Dan Harkey’s dealings with R.W Hertel and Sons, a company owned by Ronald Hertel and Robert Fowler, and the Burnett Development Company. Both companies donated to Diane Harkey’s campaign before receiving loans from Point Center. Each defaulted on their loans, which were subsequently found to have been massively overvalued. Thousands of investors have been left holding the bag and some are accusing Harkey of perpetrating a Ponzi scheme.
Investigators are looking into accusations that Diane Harkey’s husband’s lending company passed out loans with inflated appraisals to those who supported his wife’s campaign. The lawmaker said she had no affiliation with her husband’s company, asserting that she used $1.1 million of her own money to fund her campaign.
Hertel and Sons is the company that lost its contractors license in December, was forced into involuntary bankruptcy in January, and for years has been the recipient of numerous lawsuits regarding defective construction. Hertel and Fowler built approximately 1,000 homes in central California, many in San Luis Obispo County.
For more information, check out the following Los Angeles Times articles.