December 21, 2007
Cordell Funding Sues 'Alleged Fraudster' Okun for $42M
Bt Patrick Fitzgerald

    A Florida investment firm is suing embattled Miami real-estate developer Edward H. Okun to recover $2 million it loaned to him as his business empire tumbled into bankruptcy.
    Cordell Funding LLC is suing Okun and a half dozen of his companies, including commercial real estate firm Investment Properties of America Inc., for money it loaned the developer before his complex web of businesses collapsed earlier this year.
    "Okun is an alleged fraudster, whose method of operation is to move assets among organizations within his control," the Miami-based investment firm said in the lawsuit filed Wednesday.  Cordell had initially sued Okun in New York state court, but earlier this month a federal judge transferred the suit to the U.S. Bankruptcy Court in Manhattan.  That's where Gerald [sic] McHale, the court-appointed Chapter 11 trustee of Okun's 1031 Tax Group, is selling off Okun's assets.
    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 - to pay back creditors of Okun's 1031 Tax Group.  Cordell wants a share of the proceeds of the asset sales.
    The asset sales are necessary to make sure 1031 Tax Group's investors, many of whom lost much of their life savings when the company went bankrupt, get some of their cash back.
    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 served as a real estate tax shelter.  The company collapsed after Okun allegedly "borrowed" $150 million of his investors' money, according to the court filings.
    The U.S. Attorney's Office in Richmond, VA., 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 the investigation. DBR

 

Daily Bankruptcy Review - 12-21-2007 Excerpt (BMP)