Denver Business Journal - By Renee McGaw

Local employees of 1031 Tax Group are facing lawsuits from clients who say they lost hundreds of thousands of dollars apiece when the company went bankrupt last year.

Daniel and Shirley McCabe owned Investment Exchange Group(IXG) in Denver until it was acquired by Richmond, Va.-based 1031 Tax Group in August 2006. After that, they were employees of 1031 Tax Group.

"We believe that the McCabes misused and mishandled funds that were under their control," said Jeffrey Cohen, a Denver lawyer representing people who lost money when the company failed.

The former clients allege in court documents that 1031 Tax Group was operated as a "Ponzi scheme," draining clients' funds for owner Ed Okun's personal use, and then using new clients' funds to pay back old clients. Eventually, they allege, it ran out of money, prompting it to file for Chapter 11 bankruptcy protection in New York on May 14, 2007.

Source: http://www.bizjournals.com/denver/stories/2008/06/23/story3.html