Former Carmel exec goes from fast lane to jail cell     
Sat. July 26 - 2008    
Greg Andrews -  This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
IBJ staff

Just a few years ago, Carmel businessman Edward Okun was living the high life. By last year, his personal holdings had grown to include four mansions, a helicopter, three airplanes, 20 automobiles, and a 130-foot yacht.

Today, Okun is in a Virginia jail, is represented by a public defender, and faces the prospect of spending the rest of his life behind bars.

And, angry investors say, rightfully so. They charge—and government investigators agree—that Okun financed his lavish lifestyle by misappropriating more than $130 million he was supposed to be holding in escrow for hundreds of investors in real estate properties nationwide.

This month, the feds lowered the boom on Okun, who moved his base of operations to Miami after buying a 6,500-square-foot waterfront mansion there in 2005. On July 10, a federal grand jury in Richmond, Va., charged the 57-year-old with 27 counts of wire fraud, mail fraud, money laundering and other felonies. Also charged was Lara Coleman, former chief operating officer of one of Okun’s real estate companies, Virginia-based Investment Properties of America.

That firm plunged into bankruptcy last year, as did his other principal business—Virginia-based 1031 Tax Group—and more than a dozen affiliated companies.

The 1031 Tax Group was named for a section of federal tax code that allows certain commercial property owners to defer capital gains taxes by reinvesting proceeds from property sales into other real estate. Money held by 1031 Tax Group was sheltered from taxes until investors put their gains into other properties later.

But last year, investors nationwide began complaining that money they had entrusted to Okun had vanished.

In fact, according to the 32-page indictment, Okun was running a massive ponzi scheme—using new investors’ money to repay earlier investors and to buy planes, cars, homes and other possessions.

Investigators say Okun launched the scheme in August 2005, a few months after splitting with his wife at the time, Dorothy Okun of Carmel. He later wed Simone Bolanie, a 29-year-old who had owned a beauty salon in Miami Beach, The Miami Herald reported.

Okun had a low profile here until the spring of 2005, when he emerged as the winning bidder for Chicago Express, a commuter airline then owned by locally based ATA Airlines. He pledged to make Chicago Express “the premier regional airline in the country.” But a few weeks later, Okun pulled out, saying it would take too long for federal regulators to review the deal.

The following month, locally based Dreyer & Reinbold Racing LLC sued Okun, charging he failed to make $450,000 in payments for an Indianapolis 500 sponsorship. Okun countered that it was the racing team that breached the agreement.

Okun and his attorneys hope to explain away the criminal case, as well, but prosecutors say the evidence is overwhelming.

At Okun’s July 18 arraignment, Robert Wagner, one of his public defenders, said his client needed time to collect evidence showing he believed he always had money to repay the investors, The Richmond Times-Dispatch reported.

But Assistant U.S. Attorney Michael Dry countered: “This case is not about Mr. Okun’s belief that he could repay the victims. … He lied to get their money.

“This case is not complex,” Dry said.

Source: http://cms.ibj.com/ASPXPages/6iframes/FrontEndArticlesDetailPage.aspx?ArticleID=17820&NoFrame=1 (Accessed on 7/28/2008)