California Victims of 1031 Exchange Rip Offs and Industry Professionals: You Better Look At This SB 1007 And Make Your Voice Heard Or Forever Hold Your Peace

SB 1007 is an attempt to wash away any memory of Mike Machado’s ignorance of the entire 1031 Exchange process, it’s rules, and the unregulated Dodge City atmosphere the industry has operated in (with impunity) to this point in it’s history.

If I were a California Qualified Intermediary, investor, or anyone involved in this industry who is an honest businessman I would be screaming from the mountain top. Be heard now or forever hold your peace!

In “No Wonder the 1031 Advance Fiasco Is Littered With ‘Dead Financial’ Bodies” I outlined the following:

1. May of 2007 when asked by the San Jose Mercury News about the 1031 Advance-1031 Tax Group fiasco led by Ed Okun, Machado was quoted as say:

“It appears the consumers are not protected. . . This is unforgivable. We’re looking at how best to address that.”

2. Why or how could a politician acting as the chair for the California Senate’s Banking, Finance, and Insurance Committee be so out of touch and ignorant to his job?

The following is the contact information for the Senate Rules Committee both address and phone number. I provide this information so that you may make your voice heard. After reading the committee’s provisions in the “Third Reading” dated Jan 18, 2008 you might wish to call:

SENATE RULES COMMITTEE | SB 1007|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524| |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |

Interesting provisions of this session begin on page 3 “Provides that a EF (Exchange Facilitator) is NOT any of the following:”

A. The taxpayer or a disqualified person as
those terms are defined under specified Treasury
regulations.

Analysis: What Treasury “regulations”? And why are we involving more government bureacracy without involving any criminal arm of the government directly?

B. A financial institution that is not facilitating exchanges, but is acting as a depository for exchange funds or is acting solely as a qualified escrow holder or qualified trustee, as those terms are defined under specified Treasury
regulations.

Analysis: Again we find Treasury regulations mentioned with no specifics provided.

And the most curious of all–

D. A person that teaches professionals about tax-deferred exchanges or trains them to act as EFs.

Analysis: How does teaching professionals about tax-deferred exchanges automatically disqualify that person from acting as a EF and why?

Final Word:
Again the fact remains the same: Dual Signatures is the only method that ensures that the investor has the ability to monitor the progress of the transaction in a transparent, above board, honest manner without any illegal removal of funds for purposes of gain by the Ed Okun’s or Donald McGhan’s of the world.

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2 thoughts on “California Victims of 1031 Exchange Rip Offs and Industry Professionals: You Better Look At This SB 1007 And Make Your Voice Heard Or Forever Hold Your Peace

  1. BRAVO! AMEN!! Couldn’t have said it better!

    Thank you,
    Beth Callanan (aka “Okun Victim”)

    By the way, your readers might be interested to know that Okun has had the temerity to submit a motion to the Bankruptcy Court to terminate the Asset Transfer Agreement signed by him and his wife in October. The ATA is a pathetically inadequate vehicle supposedly intended to result in “restitution” to those whose exchange funds he absconded with (inadequate since he had freighted all those “assets” with debt before transferring their skeletal remains to the Trustee!). The premise for his motion is that the Trustee has breached the terms of the Agreement by failing to prevent others from going after the assets he was allowed to keep (his two manses valued by him at more than $20 million and his Hummer and Lambourghini!) AND (and this is really the best part) because the Trustee has failed to negotiate a “living allowance” for Okun, spouse and spawn (I told you this was good) such that they are now forced to live a life of “indentured servitude” (I kid you not — verbatim from the motion!) — although the abject level of “servitude” to which the Okuns have been subjected apparently allows for the acquisition of yet another vehicle — specifically, a Porche he has not yet surrendered and has asked to purchase from the Trustee. Not only that, but his victims will all be thrilled to know that the brilliant financier whose empire was built Ponzi-style on funds taken illegally from others has offered the Trustee his services to help manage the financially dessicated wasteland of properties he has so generously transferred to the Trustee. Be still my heart!

    There is a hearing on the motion in NYC on Monday (Feb 11) that I suspect will be very well attended since Judge Glenn has commanded that Okun, the lovely Simone and their attorney actually appear and be prepared to testify! Anyone wanting to read the actual text of this travesty should go to the Committee website at http://www.committeeinfo.com/1031/case_dev.htm , go to “court documents, scroll down to “Pending Motions” pour yourself a stiff drink grab a big box of hankies and begin reading everything in “3. Motion to Vacate Order Approving Transfer Agreement.” It’s a real tear jerker.

  2. Pingback: Okun Attempting To Terminate Asset Transfer Agreement According To 1031 Tax Group Victim: “Indentured Servitude” Never Looked This Lucrative « DeansGuide

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