Fourth District Court of Appeal justices Thursday issued a ruling Thursday siding with victims of a Ponzi scheme led by the ex-husband of former Assemblywoman Diane Harkey in their efforts to collect on a $12.5 million judgment against a Harkey company.
The panel of justices granted a request for judicial notice of the trial court award of the $12.5 million from Daniel Harkey’s companies. The appellate justices last year upheld the judgment, but since then a bankruptcy trustee, Howard Grobstein, has been “actively competing” with the victims of the Ponzi scheme to collect from National Financial Lending, one of Harkey’s companies.
The victims were given the right to go after the money from National Financial Lending because they could not collect from Daniel Harkey and his other investment firm, Point Center Financial Inc., because it went bankrupt.
“In this appeal, (Grobstein) contends we must overturn the enforcement orders against (National Financial Lending) because a judgment can be enforced only against a judgment debtor and NFL is not a judgment debtor,” the justices write in the ruling. “We find no merit to the trustee’s arguments.”
The bilked investors filed a lawsuit against Daniel Harkey and his companies in November 2008 and in 2013 a jury awarded the plaintiffs more than $12.5 million in compensatory and punitive damages for breach of contract, breach of fiduciary duty and financial elder abuse.