“Dodge City” 1031 Tax Group/Ed Okun-Southwest Exchange: Will the 1031 Industry Ever Be Completely Trusted by Consumers?

The recent spate of 1031 disasters brings back memories of the wild west “Dodge City” days of the 1980’s when Savings and Loans like Lincohn S & L were being looted by crooks like Keating and his brethren. It also reminds one of 1980’s Miami, Florida where retirees soon found themselves trapped in a city under violent siege by cocaine cowboys and cartels looking to carve out their vision of the American dream.

Since the 1031 Tax Group and Southwest Exchange disasters, the media spotlight has shown harshly on an industry without state and federal legislative regulations. Anyone and “his brother” can start a 1031 exchange company and call themselves “Qualified Intermediaries.” According to victims who have commented on this blog, there is no fail safe formula for performing due diligence on a 1031 exchange company.

Many companies claim to have the answers to the “due diligence” investigative questions that every prospective investor should ask their Qualified Intermediary. Yet of all of these suggestions, claims, and postulations, not one company mentions the dire need for regulation of the 1031 exchange industry through “Get Tough” federal and state laws.

The industry remains “Dodge City” where the actions of very few can wreak havoc for the majority of honest forthright Qualified Intermediaries.

The following are examples from a sampling of 1031 exchange/Qualified Intermediaries who have Google search engine “juice.” That is to say that these companies showed up on my Google search with the query: “1031 Exchange embezzlement.” Here is what these experts had to say:

#1 Exeter of Irvine,CA “Choosing a SAFE 1031 Exchange Qualified Intermediary” This company recognizes and states that there is “no regulation within the industry.” It also states that “there is very little written or published guidance. . . regarding the safe and successful administrative practices for 1031 exchanges and/or protecting and safeguarding your 1031 exchange assets.” Yet Exeter titles their website piece “Choosing a SAFE 1031 Exchange Qualified Intermediary.”

Exeter calls the following points “Critical Risk Criteria”

1. Technical capability of the Qualified Intermediary

2. Internal processes and audit controls to safeguard your 1031 exchange


3. Protection from potential errors or omissions by the Qualified Intermediary

4. Protection from potential theft or embezzlement of 1031 exchange funds

Unfortunately I have had dozens of people claim to have taken all of these Risk factors into consideration; they have also retained attorneys, in some cases, to help in the due diligence process. The results were the same. They were victims of a 1031 rip off.

#3 All States 1031: They provide 5 “talking points” .

Will I have any control over the exchange funds?

Great question but often it does NOT mean that consumers can’t be embezzled

Are my funds segregated in a separate, identifiable account?

Another good question but again identifiable does not mean that the exchanger can’t embezzle and run with consumer monies

Where are my funds being held and are they invested in a cash account?

This one according to some victim’s comments has little effect in keeping cash from disappearing.

What is the reputation of the qualified intermediary and its owners?

This is the biggest disappointment as many reputable QI’s have left town with embezzled funds. Reputation will not always overcome the very human greed element involved in performing exchanges with large sums of cash.

Is the qualified intermediary bonded and insured?

According to a few victims this means zilch! Insurance companies do not wish to pay out until an exchanger is proven guilty of fraud or embezzlement. By the time the Insurance company is begrudgingly ready to pay up, the time frame for the exchange is usually long gone and the IRS is breathing down the victim’s neck for back taxes “owed.”

Consequently there are many more well meaning 1031 exchange companies adding their ideas on how to chose a solid Qualified Intermediary. The unfortunate problem is that consumers can not rely on this information to safeguard them from a rip off. The only true deterrent will be harsh penalties, by federal or state laws, landing the accused into one of this nation’s ugly penal institutions. I am not for punishment via prison but what alternatives will have enough of a deterrent impact to stop this crazy behavior?




San Rafael’s “Earthquake Preparedness Supply Company”: Realtors Can Make A Difference for Every Home Owner In Earthquake Country!

In the most active seismic zone in the United States, Californians surprisingly are woefully ill prepared for the very real fact that an earthquake can and will strike sometime during their lifetime. With the recent tragic events in Lima, Peru, we Californians are still far from ready for a sizable earthquake. Instead of waiting for the inevitable, it only makes sense for homeowners to be ready.

For Realtors and real estate professionals wishing to be consultative sales people and one stop informational sources, it makes sense that part of their offerings include information or material on earthquake preparedness. Many real estate professionals buy their clients gift baskets or other trinkets in order to show their appreciation for the business transaction they just completed.

Instead of that gift certificate to a restaurant or some other nicety, why not gift your clients with a earthquake preparedness “package”? This gift shows concern and care for clients, provides much needed rarely purchased potential life saving items, and it heightens awareness within the real estate community. How does it heighten awareness of earthquake preparedness? Simple-every agent worth his/her salt keeps tabs on the best agents in his/her area. When one agent is providing a service or gift that is unique, most agents take notice.

Consequently I made my way to San Rafael’s Earthquake Supply Center for more information. Owner Michael Skyler was both amiable and helpful in my quest for information. We sat and talked about blogging as well as his business. Without a doubt, Earthquake Supply Center and their staff are consultative in their approach to each clients needs. Their website http://www.earthquakesupplycenter.com is a vast library of survival products. The categories include: Survival Kits, Water, Food and Cooking, Warmth and Shelter, Communications, Lighting, Safety Items, First Aid and Hygene, Fastners, and Storage Packs. According to Michael, Earthquake Supply Center specializes in the following:

  • We specialize in 72 Hour emergency kits for Home – Car – Office – School
  • We have a variety of kits to prepare you and your family while meeting your budget and needs
  • Our food and water is United States Coast Guard Approved, and unlike supermarket supplies, has a minimum five year shelf life
  • It is our goal to sell reliable, affordable, quality products to help protect you, your family, your home, business, school, and vehicle
  • We have been in the disaster preparedness business since 1995, and have an extensive client list of government agencies, national corporations, schools, institutions, businesses and individuals

Michael also pointed out, and I can vouch for this fact, that his staff is well trained and versed in all aspects of earthquake survival gear and products. They are experts in their field.

If you are a Realtor, real estate professional or affiliate consider giving a gift of life for that special client. Earthquake preparedness “packs” will set you apart and leave a lasting impression.

Iron Horse Vineyards: The Most Friendly Tasting “Room” in Russian River Valley

Iron Horse Wine

In what has to be the only “outdoor” tasting room in the Western Hemisphere, tasting at Iron Horse Vineyards is a truly unique experience. Imagine driving to a remote location, down a secluded unpaved trail, up the side of a hill, to reach the top where you are treated to a 360 degree expansive view of vineyards nestled into rolling hills which give way to a green valley floor. Welcome to paradise Iron Horse style. It is the Green Valley appellation of Russian River Valley at it’s finest with a fantastic winery at it’s finest too!

As you walk from the parking area you see what looks like a plank sitting on top of wine barrels housed in a cabana style protective covering. When you get right up to this “structure” you realize that this IS the tasting room. Turn around and you have a Thomas McKnight like picture postcard view of the Green Valley.

For more information go to sf gate’s fine article.

What makes this such a great tasting room? First the staff is extremely friendly. We began our tasting with Dawnelise and she was both exuberant and knowledgeable about the wines and the region. When Dawnelise was busy with new customers, Aaron or one of his cohorts filled in without a hitch. The attitude is so friendly and based on pleasing the customer. The staff is clad in shorts and beach wear which lends to the festive atmosphere. This atmosphere of casual elegance takes over the tasting crowd too. People tend to chat and compare their thoughts on the wine, staff, and the view. We met some wonderful people and we believe it was due to the staff’s efforts to maintain such a fun and positive ambiance.

Gorgeous topography, festive ambiance, a friendly and knowledgeable staff are not the only great features of this tasting experience: the wine ain’t half bad either! To be more exact the wine is exceptional in most cases. Here are a view examples of the buzz Iron Horse is creating:

Chef Charlie Palmer’s top pick is Iron Horse. “The Green Valley literally blossoms in the spring,” he says, “Nothing beats sipping Iron Horse and looking down into the vineyards.” Palmer owns nine restaurants, including Aureole in New York and Las Vegas and Healdsburg’s Dry Creek Kitchen.

Bobby Flay, Chef, Restauranteur, Cookbook Author, TV Personality

“Whenever I’m grilling fish with spicy flavors or slow-roasting chicken crusted with fresh herbs, I always reach for Iron Horse Chardonnay. It’s a perfect partner for the foods I like to cook.”

The following are the 3 wine flights offered the day we tasted at Iron Horse:

Sparkling Flight: 2001 Blanc de Blancs-$37; 2002 Classic Vintage Brut-$31; 2002 Russian Cuvee-$31; and the 2004 Wedding Cuvee-$37

Seasonal Flight: 2005 Viognier-$25; 2005 Un-Oaked Chardonnay-$26; 2004 Estate Chardonnay-$27; 2006 Rosato di Sangiovese-$13; 2005 Estate Pinot Noir-$36; and the beautiful 2004 BDX Meritage-3-$3.

Reserve/Library Flight: 2006 Cuvee R-$26; 2003 Estate Chardonnay-$30; 2006 Rose de Pinot Noir-$16; 2003 Benchmark-$100; and the 2005 Late Harvest Viognier-$26.

The first two flights have a tasting fee of $10 each; the Reserve/Library Flight tasting fee is $15. But wait! We were never charged a tasting fee. In fact we had so many wonderful discussions going on simultaneously with each staff member, that they began offering us wines not on the flight list. When we finally concluded our tasting, both satisfied and a bit tipped, we purchased one bottle and we were never asked to pay a tasting fee.

We made friends with staff, fellow tasters, and overall our afternoon at Iron Horse Vineyards was the highlight of our weekend.

“Joe Realtor” Beware: Online Reputation Management and Blogging’s Critical Roll in Keeping Your Good Name!


Courtesy of http://www.seroundtable.com/

Online Reputation Management, the new buzz term in Real Estate, is a very critical part of creating an online marketing presence. Sites like Yelp and Angie’s List allow consumer’s to post, for the world to see, their review and feelings about a real estate agent after their transaction. These sites are not only providing a voice to the consumer but, according to Pat Kitano of transparentre.com, fueling the concept of “radical transparency” the trend towards personal visibility on the internet.

Consequently disgruntled consumers now have a place where they can and will post a bad review on a Realtor’s performance. Due to the powerful search engine optimization of these review sites, that bad review will show up on Google within a matter of hours. If the reviewed Realtor does not have a solid online presence on Google, that bad review will sit on a page one Google search of the offending Realtor for a very long time. If new consumers to the market perform a Google search of the agent or broker by his/her name that bad review may be the first thing a consumer encounters.

Bad reviews are becoming a big reputation management headache for the real estate community. Equally troubling for “Joe Realtor” is the idea of creating an online marketing presence. If consumers search “Joe Realtor’s” name on Google and they do not see “Joe’s” web site on the page one search, they will often times conclude that “Joe” is not an expert in the community he serves. In addition the consumer will see “Joe Realtor’s” competitors filling “Joe’s” page one Google search, they will see the bad review(s) by the review site, and they will ultimately have a difficult time choosing “Joe Realtor” as their agent.

What can our friend “Joe Realtor” do to avoid these reputation management problems? First “Joe” must devise a strategy to create his next generation online marketing presence. The goals are to populate as many of the top 10 slots on any Google search of “Joe’s”name, search of the area “Joe” serves, and keep “Joe’s” competitors out of his page one Google searches as often as possible.

The best strategy to accomplish these goals is to start authoring a blog. Blogging is the best, most effective, and fastest method to creating your online presence. The new articles, content, help to drive search engine optimization. There are many critical components to blogging and it is not for every person. But for those “Joe’s” that blog, reputation management becomes a non issue, an online marketing presence begins to effectively take hold, and “Joe” then has a voice of expression that can lead to a successful online marketing presence and radical transparency.

55th Annual Sausalito Art Festival: America’s Greatest Art Show!


This Labor Day weekend marks the 55th Anniversary of the Sausalito Art Festival, in Marin County California, one of the greatest art festivals in the country. Every year the Sausalito Art Festival provides a wealth of musical talent, legendary stars, representing everything from rock to classical music. Drool inducing American junk food favorites like Cotton Candy can give way to restaurant fare as eclectic as chili lime soaked oysters on the half shell. And yes the works of art are magnificent. From materials like steel, wood, water color, ceramic, acrylic, and stone come everything from eclectic furniture, murals, paintings, home decor, museum quality pieces, down to the simple door knockers! As my best friend used to exclaim “It ain’t braggin if you can do it!” and the Sausalito Art Festival CAN DO IT!

The Musical lineup for the festival can be found at www.sausaltoartfestival.org/entertainment.html. The following are the headliners each day:

Saturday Sept. 1: Jefferson Starship and Quick Silver Messenger Service

Sunday Sept. 2: Blind Boys of Alabama and Tainted Love

Monday Sept. 3: Marshall Tucker Band and New Riders of the Purple Sage

Be ready for unannounced special guests lurking in the crowd ready to jump up on stage and play. A few short years ago, Carlos Santana bounded up on stage to help back brother George for a set. During a Todd Rundgren unplugged set, Phil Lesh appeared and jammed with the band. Many Bay Area rock legends find their way to this party and eventually add to the scene. Bring a camera because you might just get lucky!

Every year the Sausalito Art Festival commissions an artist to produce a “signature” festival poster. This year’s poster was created by Aptos, California artist Liz Lyons Friedman using hand colored “linocut.”


The Festival begins Friday August 31 at 6pm with the Gala Premiere. The weekend festivities run Saturday and Sunday 9am-6pm and Monday Labor Day from 9am-5pm. For detailed recorded information try the Sausalito Art
Recorded Information HotLine 415.331.3757.

If you would like more information or have a story to tell please comment here. Thank You!

Marin County’s Superstar Realtor: Olivia Hsu Decker


Every industry throughout the business world has it’s icons, mavericks, power brokers, and superstars. In San Francisco Bay Area real estate that powerhouse is Marin County’s own Olivia Hsu Decker. Miss Decker is the owner of Decker Bullock Sotheby’s International Realty. According to her website, Olivia is most “experienced at handling expensive properties and has the broadest, most substantial client base for luxury homes. She consistently represents the highest level of clientele.” Before ticking off Olivia’s incredible list of accomplishments, let’s look at her impressive background.

Miss Decker is a true story of struggle and triumph. She immigrated to the United States in order to escape communist controlled China in 1975. Once settled, Olivia began her career in real estate in 1979 where she fostered her “unique ability to connect with an unequaled clientele of wealth and influence. As if this was not enough to fuel a very powerful career, Miss Decker completed her studies at the University of Oxford, England in 1990.

Miss Decker’s specialty is luxury properties from $3,000,000 to $20,000,000. She currently has 12 properties listed on her web site. The most interesting is retired tennis superstar Andre Agassi’s Tiburon estate offered at $21,000,000; her own Chateau Villete location for the film “The Di Vinci Code” near Paris offered at $33,000,000 furnished or for a mere $9,500 per day; and a Belvedere estate considered one of the finest properties in the San Francisco Bay Area.

The list of publications Miss Decker has been profiled by are as follows: The Wall Street Journal, USA Today, New York Times, International Herald Tribune, Sunday Times (London), San Francisco Chronicle, Robb Report, LP-Luxury Property magazine, Success magazine, W magazine, People magazine, California Homes & Design, San Francisco Business Times, Nob Hill Gazette and many others.

The most flattering reviews were given by the Wall Street Journal and the San Francisco Chronicle. The WSJ stated “If you have a very expensive home to sell, her (Miss Decker) name comes to mind before anyone else’s.” The Chronicle made this impressive distinction about Miss Decker: “Perhaps the nation’s best known residential real estate broker”.

When Miss Decker is not working, she spends her time living between Belvedere, California and her two french chateaus Chateau Grimaldi in Aix-en Provence and Chateau Villette near Paris.

Ancestoral Heirloom Lost in Debacle: Texan’s Ordeal with 1031 Tax Group Affiliate 1031 Advance


In what is becoming a long parade of 1031 Tax Group victim comments, the following is from a native Texan describing her family woes. The Arthur family’s tradition was to pass along a 100 year old ranch to generations that followed. This tradition was to continue with the Arthur’s looking to exchange the heirloom property for a better property in a more remote part of Texas. That is until they ran into the 1031 Tax Group owned by Ed Okun.

Diane Arthur, author of this comment, tells her story and describes the aftermath of their situation as it stands today:

  1. Diane Arthur | darthur@gvtc.com | IP: Dean -I am from Boerne, TX, a rapidly growing community north of San Antonio on IH 10. My husband and I are also victims of Ed Okun. We placed $1.5 million with 1031 Advance, Inc. (they had a satellite office in Boerne). This exchange was for the purpose of a real estate and construction exchange. The real estate exchange of $806,000 actually occurred but the remainder of the funds, $684,000+, were for building improvements, i.e. hunting lodge, barns, and fences on the ranch. These funds are now included in the bankruptcy. The property that was sold was farm/ranch land that has been in my family for 100 years. Because we are in a rapidly developing area we felt it was time to sell the ranch and purchase another in a less developed area. This property was passed down to me by my ancestors and we had hoped to continue this tradition. Mr. Okun has not only stolen our money he has stolen our heritage. The sale of this property was also a major factor in our retirement plan – that has now been put on hold. Unfortunately the Bankruptcy Judge and Creditors Committee seem to have let Mr. Okun pull the wool over their eyes because there actions seem to be more in Mr. Okun’s favor than in favor of the creditors. There are many others in this area who are also victims of Okun and whose stories are worse than ours.I just recently saw an article that stated Okun was one of A.J. Foyt’s sponsors – guess my money is out there running around a race track. Wonder if A.J. knows what kind of man he is doing business with –Thanks for the exposure you have given this matter.DianeAug 22, 9:39 PM — [ Edit | Delete | Unapprove | Approve | Spam ] — 1031 Tax Group Assets: By Land, By Sea, By Air

WARNING TO ALL REALTORS AND BROKERS: The Future is Now When Parents Are Buying Domain Names for Babies!


photo of The Pankow Family by Paul Connors, AP

Technology and innovation are roaring into the Real Estate space at warp factor 5 and there is nothing agents and brokers can do about it but accept the sweeping changes that are taking place. The next generation of online marketing through Google, for the Real Estate community, is blogging. A big factor of this new wave is Web 2.0, widgetry, and the idea that no matter who you are or what you do-you must have a presence online in order to be taken seriously.

With all of this said, the trend continues with the fact that Harvard, the icon of all American Universities (Sorry Kevin!), is suggesting that each applicant write a blog and show that they have an online presence. Consequently it is of great interest that more and more parents are securing domain names for their unborn children. Anick Jesdanun wrote an excellent article on this growing trend. “It is the starting point for your online identity” according to Warren Adelman, president of registration company GoDaddy.com Inc.

Adding to Adelman’s claims is Peter Grunwald, Grunwald Associates, who specializes in researching kids and technology. “Given the pace of change on the Internet, it strikes me as a pretty impressive leap of faith that we’re going to use exactly the same system and the same tools 15 to 20 years from today.”

What does this mean to the Realtor or broker who is scratching his/her head at these notions? The focus is not on these unborn children who will have a domain name waiting for them in the year 2022 when they will need to begin looking at colleges. The focus for a Realtor or broker is the fact that these home buying parents, like the Pankows, are looking for agents and brokers who speak their language, understand the internet, and show the same concern for online identity/presence.

For those agents or brokers winding down their careers, this message is really a moot point. But make no mistake about the facts. For agents and brokers building a career, in mid career, or looking for lead generation tools-an online presence on Google using blogging and technology is akin to Career Survival 101.

“Walk Score” Awesome Widget for Realtors: My San Francisco Digs vs San Rafael Digs-Can You Dig It?


In another of a plethora of fun widget sites, www.walkscore.com rates your home’s proximity to “walkable” landmarks, plotted on a map, within a neighborhood. The landmarks are then listed by name and address in the left sidebar for your convenience.
According to Walk Score: “ We help home buyers, renters, and real estate agents find houses and apartments in great neighborhoods. Walk Score shows you a map of what’s nearby and calculates a “Walk Score” for any property. Buying a house in a walkable neighborhood is good for your health and good for the environment.” For information on how Walk Score derives their “Walk Score follow this link: How It Works.

If you drill down on the “Walk Score” link provided above you will see that my former digs in San Francisco received a very high Walk Score of 91 out of a possible 100. This is a information rich tool and it does give any newbe to a neighborhood tons of ideas for exploration.

On the other hand, the sensitivity to distance seems to be a real issue with Walk Score. Most of the bars and restaurants listed were within a few blocks (.25 of a mile) of my former address in the Lower Pacific Heights neighborhood of San Francisco. These bars and restaurants were mom and pop joints which I visited infrequently. Why? Fillmore Street was only 4 blocks away and crowded with some of the best restaurants, bars, and people watching in the city!

An example of the curious results: Walk Score’s listing of John Lee Hooker’s Blues Club “The Boom Boom Room” which is a long walk from my old condo. Why is this odd? They failed to list incredible world class restaurants that were half the distance yet reside on the same street (Fillmore Street) as the Boom Boom Room.

In Walk Score’s favor is the fact that they provide a transparent page about why Walk Score doesn’t work called: “How It Doesn’t Work: Known Issues with Walk Score.”
I found this a saving grace and a very important reason to like Walk Score.

In the same vein as my questions about bar and restaurant choices within my San Francisco Walk Score, I was left to wonder why natural beauty was being left off the criteria list. I live on the water with full use of a boat dock, marina, and yacht club-I don’t own a boat. Yet Walk Score never took this into consideration when calculating my new suburban digs score. Even though all of these facilities are open to the public, within a stones throw of my doorstep, none of the water related facilities were mentioned in my scorecard.

Consequently my San Rafael score, a below average 31 out of 100, took an unfair beating in my opinion. But of course that is the fun of Walk Score-nobody will ever agree and it leaves tons of room for debate.

I would love to propose to the Walk Score folks the idea of a board game for adults. Make it a cross between “Charades” and “Mad Libs” with adults testing their neighborhood knowledge.

To add your Walk Score widget to your blog or website go to http://www.walkscore.com and follow the simple instructions for your free widget.

If you have further questions please comment here or write Dean Guadagni at ddguad@aol.com. Thanks!

1031 Tax Group Assets: By Land, By Sea, By Air

The San Jose Mercury News has become a leading source of information on the ongoing saga of victims of the 1031 Tax Group fiasco. They have concentrated on the mess that is 1031 Advance, based in San Jose, one of the 1031 Tax Group companies. Deansguide highlighted the assets of Ed Okun( “Is This Where the 1031 Tax Group Victim’s Monies Disappeared?”) as reported by the San Jose Mercury News through U.S. Bankruptcy Court records. The following is a more detailed list of assets as outlined in the August 4, 2007 article “Ed Okun’s Assets” published in the San Jose Mercury news:

On land

1967 Sunbeam Alpine

1979 Ferrari 400

1999 Cobra replica

1982 Manta

1982 GTO replica

2001 Ferrari 550 Barchetta

2002 Dodge Caravan

2003 Aston Martin

2003 Hummer H2

2004 Lamborghini Murcielago

2005 Gallardo Lamborghini

2005 Bentley Continental GT

2005 Harley Davidson

2006 Harley Davidson

2006 Land Rover Supercharged

2006 Rolls Royce Phantom

Four Indy racing cars

In the air


78 Lear Jet 25D

69 Gulfstream G2 N511BA

70 Gulfstream G2B N982B

On the water

26-foot Morin boat

37-foot Heim Wooden replica

Ski Nautique



38-foot Cigarette

Jet Skis (4)

26-foot 1979 replica Dodge Gold Cup Racer

I can not say that I would not want to own a list of cars, boats, and planes like the one above. I hope that this mess can be straightened out, debts repaid in full, IRS penalties against delinquent exchangers removed, and new laws enacted to bring this industry back to respectability in the public eye.