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December 20, 2007
Judge Says 1031 Tax Trustee Can Pay Crew of Okun's Yacht
By Patrick Fitzgerald
A federal judge gave the go-ahead to the court-appointed trustee running Edward Okun's troubled tax shelter business to pay the wages of the crew of the Miami businessman's 131-foot luxury yacht until the ship can be sold to pay back Okun's creditors.
Judge Matrin Glenn of the U.S. Bankruptcy Court in Manhattan, Thursday signed off on 1031 Tax Group Trustee Gerald [sic[ McHale's bid to pay the crew of the yacht, christened the Simone, about $25,000 a month.
McHale had argued he needed to pay the crew or they would quit. A crew of eight must be on board the ship at all times or the boat -- which has been valued at more than $14 million -- loses its insurance coverage. Absent the crew, the value of the yacht could fall dramatically, according to the trustee.
Okun and his wife, Simone Bolanji, signed over most of their luxury "toys" -- including the yacht, several jets and more than a dozen exotic cars -- in order to pay back creditors of Okun's 1031 Tax Group.
After McHale took control of Okun's assets in October, the yacht was seized for past due dockage fees by a South Florida marina. The trustee paid off the marina and also had to pay the Simone's crew back wages "in order to entice them back to employment."
The asset sales are necessary to make sure 1031 Tax Group's investors, many whom lost much of their life savings when the company went bankrupt, get some of their cash back. The trustee said he hopes to have Okun's assets sold off within two to nine months.
The Simone, now in the Bahamas, is on the auction block. Fort Lauderdale yacht broker Moran Yacht & Ship has the yacht up for sale. The ship, which sleeps 10 plus room for crew of 8, comes complete with Jacuzzi, plasma TV and "exotic Tahitian paintings."
1031 Tax Group was a "qualified intermediary" that let investors, who sell investment properties, defer capital-gains taxes if they invest the proceeds in similar-type properties within 180 days.
Okun has been accused of fraud in operating his company, which has served as a real estate tax shelter. The company collapsed after Okun allegedly "borrowed" $150 million of his investors' money, according to court filings.
The U.S. Attorney's Office in Richmond, Va. [sic], and the U.S. Postal Inspection Service are investigating Okun's dealings and the conversion of funds from creditors. Okun has previously said in court papers that he's cooperating with that investigation. DBR.
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