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By Andrea Papagianis and Jim Shilander

Last week jilted investors involved in a fraud lawsuit against an Orange County real estate lender, and naming a state assembly member, called upon the official to step down.

The lawsuit accuses Dan Harkey of defrauding more than 80 investors—many of whom are elderly—out of more than $43 million, and alleges that investor money helped fund the elections of Harkey’s wife, state Assemblywoman Diane L. Harkey (R-Dana Point).

Harkey, who is serving her third and final term in the state Assembly, announced her candidacy last month for the state Board of Equalization in 2014. Something former investors in her husband’s Point Center Financial Inc., of Aliso Viejo, say she shouldn’t do.

“That money came from elderly people who’d lost their life savings,” said Lloyd Charton, the lead plaintiff in the lawsuit. “I believe she should consider stepping down.”

Originally filed in 2008, the lawsuit has been continued several times and is currently postponed due to a bankruptcy filing by Point Center. The company’s defense attorney, Jeffrey Benice, said the bankruptcy petition was unrelated to the fraud case and was intended to block receiver actions from a San Diego County judgment, to protect investor funds.

Plaintiffs in the Orange County lawsuit are seeking relief from the bankruptcy filing. The fraud case could proceed to trial if a U.S. Bankruptcy Court judge removes an automatic stay placed on the case—an injunction blocking any action—at a hearing on Tuesday, March 19 in Santa Ana.

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