Ed Okun Denied Freedom: Judge Payne Hammers Defense Attorney’s Explanation

Courtesy Gordon Gecko Wiki

Sensing his fleeting chances at freedom, 1031 Tax Group investment criminal Ed Okun made what looks to be his last feable attempt for release yesterday–he was denied! Okun’s attempt centered around a defense motion for release based on a 3rd party custodian (required terms for his release) a Mr. Alex Carrera. The defense attorney in the case, one of a long line who have come and gone no doubt at either taxpayer’s expense or that of Okun’s victims, originally proposed that Mr. Carrera would be present at the November 5 hearing: Carrera was a no show.

The following is the tip from ever present and well informed Okun victim Elizabeth Callanan. Elizabeth has been a huge source of information and guidance in my 1 1/2 years of coverage on the Ed Okun rip off and eventual prosecution. The following comment will give all involved a much clearer picture of what has just transpired. This comment came in the last 24 hours. Certain passages were highlighted for reader convenience:

“Judge Payne DENIED Okun’s motion for release. The 3rd party custodian (required for Okun’s release) originally proposed in the defense’s motion, an Alex Carrera, was a no-show at the hearing, despite the Defense’s new attorney (a private attorney with an office in Washington, DC, named Barry Pollack — so Okun now has THREE attorneys, including the two from the public defender’s office, at US taxpayer expense!)telling the Judge he’d spoken to Carrera the previous afternoon and had every reason to believe he would be there and couldn’t explain why he wasn’t. Interestingly, his absence could not have been a surprise to Simone Bolani (Okun’s Brazilian bride), since she’d recruited a substitute, Edwin Escobar, the night before the hearing (odd she wouldn’t have shared that information with her husband’s attorney, isn’t it?) who did appear in the courtroom. However, under questioning by the US Attorney, Escobar had to admit that he was apparently guilty of one of the same offenses with which Okun was originally indicted, namely asking Okun to pay him $10,000 he was owed for some reason in increments of less than that to avoid IRS reporting limits! Judge Payne must have thought that wasn’t the most stellar qualification for a third party custodian and denied the motion. He also expressed chagrin that Carrera, described in the defense motion as a “family friend,” had in fact only met Okun once, at Simone’s Feb 2008 birthday party, and had not seen Okun since. He cautioned the defense not to bring any further such motions unless they’d personally interviewed the proposed custodian and assured themselves of the facts being claimed and that they were in fact suitably qualified to serve in that capacity. Thanks to Judge Payne and the US Attorney (Michael Dry), it looks like Okun’s appearance at his criminal trial which begins Jan 19 has been assured.”

Ed Okun Attempting Appeal For Freedom November 5: Victim Instructions Here

Newsflash: Ed Okun is attempting a final bid for his freedom with a renewed appeal for release. The news came from original Ed Okun “Train Wreck Victim” Elizabeth Callanet. This is an outrageous and disturbing turn of events that every victim should be aware is happening. Elizabeth’s request is in accordance with deansguide’s approval as one of the only sites certified to deliver important information to the victims of these heinous crimes. The following is Elizabeth’s message in it’s entirety:

——————————————————–

“Okun’s renewed appeal for release pending his criminal trial in Jan will be heard in Richmond this Wed, Nov 5, at 1:30pm (New courthouse address: 701E. Broad St. 7th Floor). If any victims plan to attend they should let Kim Ulmet, the Victims’ Assistance Specialist ( contact information provided below). She’s very helpful and informative about the players and the proceedings and will ensure victim’s get to the right courtroom and/or know if the hearing has been delayed, relocated, etc.

In addition, several of Okun’s victims are asking the Court to permit telephonic participation (i.e. a service that would permit Okun/Coleman’s victims around the country to listen to the criminal proceedings by phone) since, thanks to them(Okun-Coleman), none of the them (victims) can afford to actually travel there! Any victims having interest in listening to the trial by phone (there is a cost, but it applies only to the length of time during which one listens, and one could listen to some or all of just some sessions and not others), they should write to the court asking that they approve of using that service (a first for this court jurisdiction).

Write, FAX or email letters to Kim at the address below and she will make sure they get forwarded to the appropriate office:”

Kim Ulmet, Victim/Witness Specialist
United States Attorney’s Office
600 E. Main Street
Suite 1800
Richmond, VA 23219
Fax (804) 771-2316
email: kimberly.Ulmet@usdoj.gov

Very Important Notice to Okun Victims Regarding Your Address:

“On a final note, 1031 victims are receiving in the mail copies of a proposed settlement between the Trustee (McHale) and Cordell. Any victims who have not received it, should write to McHale, the Trustee at jerrym@trustee1031taxgroup.com , to let him know that he ( and perhaps the bankruptcy court) don’t have your address/or your correct address. To ensure the Bankruptcy court has your correct information, also write to:”

Kathleen Farrell-Willoughby
Clerk, U.S. Bankruptcy Court
One Bowling Green
New York, NY 10004-1408

“It is vitally important they have your contact information if and when there is any kind of of settlement (we shouldn’t all hold our breaths!) and to receive these updates in the interim. Many of the court documents are available on the Trustee’s website at:”

http://trustee1031taxgroup.com

A big thank you to Elizabeth for her announcement. Our hopes and prayers are with all the victims for some good news in these tough times!

U.S. Trustee McHale “Continuation of Bankruptcy-Criminal Proceedings Collectively Serving The Interests of Justice”

United States Trustee Gerald McHale recently brought suit against Wachovia Bank, and affiliates, for the recovery of “$43 million of conveyances allegedly made to Wachovia in the form of cash and mortgage liens, and the imposition of equitable liens and constructive trusts on several properties in which Wachovia continues to hold liens, or the proceeds therefrom.” Allegations abound that Wachovia not only helped Ed Okun in his scheme but perpetuated it’s continuation despite their (Wachovia’s) knowledge that Okun was violating many banking laws in his business practices.

Today Gerald McHale announced that he has filed a “Statement of Position and Response” to judge Payne’s order in the Ed Okun criminal case. The statement was filed in regards “to the effect of the pending bankruptcy cases of the 1031 Debtors on the likely availability of funds for the purpose of restitution in the criminal case.” The statement was filed October 15, 2008.

3 Key Points

1. McHale agrees “concurs” with the presentation set forth in the Government Statement filed September 12, 2008. See US vs Okun (Government Position) pdf bottom of article.

2. McHale submits that the continuation of the bankruptcy proceedings and the criminal proceedings “are collectively serving the interests of justice and judiciary effciency.”

3. McHale asserts that “Victims of the criminal case are better served by the bankruptcy process which is well underway and has already resulted in the liquidation of many tangible assets and other recoveries.”

Sad But True

The saddest but most likely true statement is the one McHale uttered at the end of his announcement:

“Victims could see some recovery through the bankruptcy process sooner than the time that would be required for the defendant’s convictions in the criminal case will be final.”

Ed Okun or Michael Okun: What’s With The Okun Name And Scandal?

Chicago Sun-Times published this deansguide article September 11, 2008

A New York man, Michael Okun, was recently arrested for bilking a Hillsborough, California woman of $510,000 in a ponzi scheme disguised as an investment vehicle. Okun contacted the victim in 2001 and brought the scheme into full swing according to a San Francisco Chronicle story. Does Ed Okun have a evil twin, lost son, or family member here? Here is why I keep writing about rip offs

What Happened?

1. According to a San Francisco jury indictment, Okun wrote a letter to the victim claiming to have a patent for a search engine and was working on a deal with Microsoft related to developing the technology

2. Okun claimed he was amongst a group of investors “ trying to raise $25 million to secure Microsoft’s participation and persuaded her to wire $260,000 to a New York bank account in the name of Media World Communications,” the indictment said

3. Over the course of the next 2 years Okun recruited a second investor with the idea of paying off the original investor with the new investors initial cash investment: a typical ponzi scheme

Analysis

Although the amounts of money are far below the levels of Ed Okun, is it just coincidence that two men with the same name ran ponzi schemes on investors? The name Okun is not Smith. Is there a connection between the two men? Three things are clear in this case different and similar from the Ed Okun case:

1. Due Diligence: the Hillsborough victim: never performed any due diligence on Michael Okun, search engine technology, or where her money was being sent. The cash was going directly into Okun’s personal bank account just like the money that Ed Okun was stealing went into his personal accounts onshore and maybe offshore

2. “Player”: Google search of the name Michael Okun and nothing comes up on page one today about this con artist. Imagine if the Hillsborough investor had performed a Google search in 2001 and nothing showed up on a search query. That would not be out of the norm for that time period, except for the fact that Michael Okun claimed to be a player. He should have showed up somewhere with a trail of former clients, investment firms, employment history, or something to investigate

3. Denial: everyone wants to believe they are not being ripped off. It is this embarrassment factor, that allows the Michael Okun’s and Ed Okuns of the world to continue their schemes. It is also the reason a person loses more than the initial investment

Has A New Ed Okun Arrived On The 1031 Exchange Scene: Vesta Strategies LLC Staggers From Wall St. Journal Story

In another apparent blatant rip off of 1031 exchange investor funds, Vesta Strategies of San Jose, California “has closed its doors, leaving investors scrambling to recover millions and pointing to flaws in the largely unregulated industry” according to the Wall Street Journal report “Behind the Boom and Bust of Real- Estate Player Vesta.”

Do we have another Ed Okun 1031 Tax Group on our hands?

The Founders

Chicago businessman John Terzakis and partner Robert Estupinian were the principles at Vesta Strategies. They founded Vesta in 2004 amid a firestorm of legal problems

History

According to WSJ’s Kris Hudson’s report:

“Mr. Terzakis had a history of failed real-estate deals and soured relationships — information Mr. Terzakis isn’t required to disclose to potential clients. Now the two men are accusing each other in separate lawsuits of diverting millions of dollars from Vesta for personal use.”

The Losses Sound Familiar

Christina Pappas a California investor, a familiar story to the “Trainwreck Victims of Ed Okun”, is out $2.5 million she handed to Vesta in April 2008 from the “sale of a property.”

When Ms. Pappas found a replacement property, another building, to purchase within the IRS’s 180 day exchange period, she requested her funds be wired in order to close the deal. To her utter horror, but familiar to the people following this industry, Ms. Pappas maintains that the “Vesta representative failed to wire her money to complete the property exchange by the June 16 closing, and still hasn’t done so”

The Numbers

According to WSJ story, Mr. Estupinian was quoted as saying that “Vesta Strategies held $10 million to $30 million in client money at any one time.” Okun like no, but no small sum of money in any case

Vesta Infighting And Meltdown

In a scene worthy of Ed Okun, the two principles Terzakis and Estupinian ended up in court with Terzakis initiating the legal action.

Mr. Terzakis allegations included

1. Estupinian misappropriated several million dollars of Vesta’s money for his family’s use

2. $96,000 salary for Mr. Estupinian’s wife, who allegedly did little work for the company

3. Expenditures on a $1.3 million house

4. A $160,308 oceanfront apartment in Long Beach

5. $50,000 for a pair of dogs-doesn’t everyone have $50,000 twin dogs?

6. $42,795 in tuition toward Mr. Estupinian’s doctorate degree-education is expensive

The Countersuit by Mr. Estupinian

1. Embezzlement of about $25 million and the following quote by Mr. Estupinian:

“Beginning as far back as 2000, John Terzakis has been treating the client funds as his own personal piggy bank in order to fund his many personal business and development projects”

Final Final

If this does not sound like the Okun case it certainly sounds like a close facsimile to it. The bottom line for Ms.Pappas and fellow investors serviced by Vesta Strategies could be the same fate suffered by Okun victims: no return on investment, IRS nightmare tax bill, and the prospects of a lost retirement fund spent in a lavish lifestyle befitting a crook

Okun Victims Notice: Judge Authorizes “Telephonic Participation” In June 11th Fee Application Hearing

According to US Trustee Gerald McHale’s latest notice the following developments have taken place for the upcoming June 11, 2008 Fee Application hearing. This hearing is taking place to review the application for payment of fees by the many entities that are being utilized by the Okun victims in their fight to recover their stolen monies. The following is from McHale’s June 5th notice:

“PLEASE TAKE NOTICE that the Honorable Martin Glenn, United States Bankruptcy Judge, has authorized counsel and parties appearing in this case to attend and participate telephonically, via Courtcall, in the hearing to be held before the Court on June 11,2008 at 11 :00 a.m. (the “June 1 1 Hearing”) concerning the First Interim Fee Applications for Allowance of Compensation and Reimbursement of Expenses of (i) Gerard A. McHale, Jr., the Chapter 11Trustee.”

The first round of negotiations of fee applications begins as the monies being sought for victims again take a hit. It seems like everyone wants to get paid but the people most deserving are getting nothing and have lost the most.

Okun Criminal Trial Date Set October 20, 2008: Is This The Final Act?

IBS affiliate Winston-Salem, North Carolina published this deansguide article May 23, 2008

Please Read My Story and Follow The Links. . .

Over the course of the past two years the 1031 Exchange industry has been hit with two devastating and perception crushing scandals: Donald McGhan’s Southwest Exchange and Ed Okun’s 1031 Tax Group (see my 40+ articles on this disaster at deansguide).

I have followed Ed Okun and chronicled the devastation he wrought on so many investors. Since the beginning of this series in April of 2007, I was contacted by and consulted with Forbes magazine editor Mike Maiello, contacted by the US Trustee for the victims Gerald McHale, left sinister messages by the man I dubbed “my mystery caller” from Miami who made incredible predictions many which came true, contacted by over 20 of Okun’s victims and employees, was admonished by an attorney representing JPS Capital (read bottom of story in link!!!) whose principles have a very sleazy past and I have had 4 articles published by major media sources.

It’s been a long and crazy ride. But we may have seen the end of Ed Okun. After his appeal for bail was denied on May 9th in the Eastern District of Virginia, having lived in VA I will verify that they don’t mess around in the South, for what the judge termed “facts that point to Mr. Okun being a flight risk”, the Ed Okun saga may be over-maybe.

The Final Chapter?

Once prominent and now disgraced 1031 Tax Group swindler Ed Okun’s criminal trial date was set for October 20, 2008 in accordance with Eastern District of Virginia Judge Payne’s ruling. The date was announced during Okun’s failed attempt to persuade the court to grant him bail at his May 9th Bail hearing.

In US Trustee Gerald McHale’s “Trustee Newsletter #6″, McHale reported that the final pieces of jewelry had been recovered and were being readied for auction. In April according to McHale “the sales of the vehicles, boats, planes and water-craft (“Toys”) netted approximately $1.6 million for the bankruptcy estate.”

A mere pittance of the monies stolen or squandered. More galling is the fact that this represents roughly 1% of the total monies Okun stole during his retirement account plundering days. It isn’t nearly enough to compensate the professionals who are now standing first in line, ahead of the victims, to be paid for services meant to recover stolen assets (the victim’s retirement funds in many cases) for restitution.

To make matters worse, the official word, to my knowledge, has not come down yet as to how the IRS is going to handle each individual case. Will these victims be held accountable for tax bills on the money they had stolen from them?

Newsflash: Ed Okun Denied Bond, Remains Incarcerated

This just in courtesy of the “mystery caller”: Ed Okun’s attempt to secure bail and his freedom was denied today at his bond hearing in Richmond, Virginia. The hearing, which ran from 2pm to 5pm EST, was previously postponed so that Okun could build a case for gaining bail. Okun charged with multiple counts in relationship to his “ponzi” like scheme which bilked investors out of $160 million, was denied bail as:

1. Flight risk

2. Danger to the Community at large

His court appointed attorney was present; and according to the “mystery caller” original Miami attorney Michael Rosen was also in attendance.

Analysis

There is a very sad and ironic problem with keeping Ed Okun incarcerated. There is no way to force Okun to pay restitution if he is incarcerated. Not that Okun would have the ability, means, or method to legitimately pay back Train Wreck Victims.

But with Okun incarcerated, there is no hope at all in recovering anything that he may have hidden, if he hid anything at all, or forcing him to “work” for his victims.

Now it seems the only hope that victims of Ed Okun’s collapsed 1031 scheme have in recovering their monies is to go after the insurance companies involved in the transactions.

Judge Moves to Seize Okun Assets: Confiscated Assets Will Be Liquidated for 1031 Tax Group Settlement

U.S. Bankruptcy Court judge Martin Glenn recently ordered the seizure of assets from 1031 Tax Group owner Ed Okun as the next step in attempting to pay back monies owed to investors aka creditors. According to the Associated Press, this agreement allows the 1031 Tax Group to seize control of it’s owner’s (Okun) assets for liquidation to meet debts outlined in the settlement. Judge Glenn was quoted as saying “This agreement immediately results in the debtor’s recovering assets that can support a liquidation plan and distribution to creditors.”

In the original settlement, creditors rejected the deal because that deal would have allowed Ed Okun to keep ” his four houses, four airplanes, seven boats and 20 cars” The assumption, and nobody from Okun’s camp has chosen to prove otherwise, is that these assets were purchased with creditor’s monies. The old “other people’s money” strategy of investing.

The list of assets seized: a helicopter, Learjet, and two Gulfstream jets. In addition 7 boats will be taken amongst them are a 38ft Cigarette go-fast boat and a 37ft Heim wooden replica vessel. Even more impressive are the cars an incredible collection beginning with two Indy race cars, two Ferraris, two Lamborghinis, a Bentley, and a Rolls.

Although this is a good beginning to recovery, what is puzzling is the fact that the judge is taking all of Okun’s assets away. . . or is he? In the deal, according to Associated Press reports, the judge specified, that “Mr. Okun would be allowed to keep two multimillion dollar homes in New Hampshire and Florida and two cars. Okun will also be able to negotiate a living allowance.”

Granted it is very possible that the two multi-million dollar houses and two cars were assets earned prior to his maneuvers with the 1031 Tax Group. Unfortunately that is not much consolation to people who have lost absolutely every dime they owned in this deal. For those investors, their retirement days will be filled with work trying to rebuild from scratch. Hopefully everyone will be able to walk away with something including Mr. Okun.