Okun Victim Speaks Out on LandAmerica: 1031 Exchanger’s Warning A Must Read

Due Diligence Warning: The following article is in it’s entirety a comment from a deansguide reader. I am neither an attorney or practicing investment professional. I support the victims of any 1031 exchange debacle yet the following are the opinions and thoughts of Beth Callanan solely and not necessarily supported in it’s entirety by dean guadagni or deansguide–but if you have read this blog you understand my thoughts on the 1031 industry. When considering any investment, always perform your due diligence first and protect yourself at all times.

Important Note: I assume and have seen some evidence that many 1031 exchange companies are viable, honest, and worthy companies. Not all 1031 exchangers or Qualified Intermediaries are suspect. Many people have built their life and reputation in this industry. It is the sleaze bags like Ed Okun that crush the good name of these other hard working business people.

*President elect Obama please pay attention while you are trying to fix Wall Street consider fixing this industry too.

My #1 Question: While reading this incredible comment sent to deansguide consider the one question I have asked but has never been answered. Why are many exchange companies allowed to invest exchanger monies when their sole purpose as a Qualified Intermediary is purportedly to simply execute the process of an exchange?

What is easily the longest, most detailed and greatest comment in the history of this blog, Beth Callanan one of the 350 Ed Okun 1031 Tax Group Victims, provides a MUST READ for any investor currently in a 1031 exchange or anyone consider this instrument.

What you are about to read will shock you, it will sadden you, it will anger you, and it will have your head shaking in disbelief. Normally I edit such long comments. But in this case I want to give Beth’s comment the full benefit. The only editing of this text was to underline, bold, or change font colors to bring out information.

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Beth Callanan’s comment:

“When will the IRS and the US Department of Justice (which, I understand, oversees bankruptcy courts) step up to the plate and rectify through regulation and reform the ongoing pillaging of innocent 1031 exchange victims first by unscrupulous 1031’s (or hilariously misnamed “qualified” intermediaries) and then by the bankruptcy courts wherein they all seek refuge once they have absconded with (Southwest Exchange, the 1031 Tax Group) or squandered (LandAmerica, the most recent case) the exchange funds entrusted to them? The following excerpts from documents filed in relation to the “bankruptcy” of LandAmerica’s 1031 are all too familiar and the fate of those exchangers all to painfully obvious to those of us who have already been there.

1031 Exchangers should beware:

1) Not to be lulled into assuming that the 1031 business of a corporation or entity whose other functions (title company, insurance, banking) are otherwise subject to federal regulation is also subject to regulation or oversight. Like LandAmerica, the corporate structure is such that the 1031 aspect is sufficiently separated to NOT be subject to such regulation.

2) Not to expect that any so-called “fidelity bonds” (endorsed by the FEA) presented to unsuspecting exchangers as assurance of the security of their funds in the event of “error or ommission” or criminal malfeasance, even where the face value greatly exceeds the amount of their exchange fund deposits, will be available to them to cover any loss of their funds since policies pay the 1031 (and become part of the “estate” in any bankruptcy), not the exchanger, and in any case the insurers will insist that the “per occurrence” terminology refers to the total loss of funds, not just their individual funds. (Since exchangers can’t possibly know the total amount of funds on deposit with the 1031, they can’t possibly know if the face value of coverage is adequate to cover them and, if the funds go to a bankruptcy estate, they can expect that the total will go to cover “administrative fees” of that court in any case.)

3) that even a segregated account may not protect them. While posters to this site have discussed the advisability of insisting that your exchange funds be deposited in a segregated (NEVER COMMINGLED!) account associated with your name and Tax ID number, and suggested that any transfers require the signature of your attorney or a bank officer (to implicate the bank in the liability for any improper transfers), as is clear from LandAmerica’s filings (and the bankruptcy court’s track record in the Okun 1031 embezzlement), the court may nevertheless insist that your exchange funds are property of the bankruptcy estate and thus available to pay its own “adminstrative fees.”)

4) that their funds are deposited in secure bank accounts and not invested at the discretion of the 1031 in any other money making scheme (the supposed benefit of which the exchanger will never see in any case).

5) even deposit in a banking institution is problematic since the FDIC coverage limit, were the bank to go under (an increasingly likely possibility in this economic climate), is $250,000 per depositor. If the 1031 is the “depositor” then any exchange funds in their name are clearly at risk since they’d be expected to have millions on deposit at any given time — and if the exchanger is considered the depositor anything over the FDIC limit is at risk. How does the FEA propose to protect exchangers given that scenario?

6) bankruptcy court will almost certainly guarantee the absolute loss of their funds. Rather than construing exchangers of 1031’s in bankruptcy as victims of negligence, malfeasance or criminal activity or their exchange funds as “held in trust” and therefore exempt from inclusion in debtors’ estates (as the exchange agreements in the case of Okun’s 1031 Tax Group explicitly stated), they have so far relegated exchangers to the status of “unsecured creditors” or investors and thus the last in line to receive any of the funds actually retrieved from the increasing number of 1031 failures.

The bankruptcy process is beyond broken and in need of reform. So far (18 months into it), the costs of Okun’s having put his 1031’s into bankruptcy are $24 million against which less than $2 million has been retrieved from the liquidation of his various “assets.” (The court will claim that it has “retrieved” $10 million, but nearly $8 million of that amount were exchange funds held by a bank in Colorado that Okun had not managed to steal – the costs of the court action to seize those being among the “admin fees” exchangers funds have already been used to partially offset adding the grossest insult to that injury!)

Excerpts from recently filed LandAmerica documents:
(anything in italics are my notes — boldfacing was added by me for emphasis)

From the affadavit of G. WILLIAM EVANS, CHIEF FINANCIAL OFFICER OF LANDAMERICA FINANCIAL GROUP, INC. AND VICE PRESIDENT
OF LANDAMERICA 1031 EXCHANGE SERVICES, INC., IN
SUPPORT OF CHAPTER 11 PETITIONS AND FIRST DAY PLEADINGS

Footnote page 10 (of 17):
3 LES expects that there may be competing claims made against and disputes regarding the Exchange Funds (especially those that have been commingled), including whether such funds constitute property of the estate. LES intends to seek a determination from the Court as to the appropriate characterization of such funds.

(Note to potential exchangers – be sure your funds are in SEGREGATED ACCOUNTS, and not allowed to be commingled, but also note that even those are segregated are not assured protection unless some signature other than the 1031 is required to transfer them — ideally a bank officer’s, so if they are moved improperly the bank’s assets are liable to cover your loss. However, in another cautionary development the outcome of which may put ALL exchange funds at risk, even those in traceable segregated accounts, LES in its bankruptcy petition has apparently already made the claim that even the segregated account funds are their property and not the property of the exchangers (see the Adversary Motion below.) )

(ii) Unregulated Operations (footnote “2″)

(Note: LES, LandAmerica’s 1031, “LES”, appears correctly under “Unregulated Operations”)

(Footnote “2″ reads as follows:
“2. Although not regulated by a State Department of Insurance, many of LandAmerica’s “unregulated” subsidiaries are in fact regulated by different types of State or Federal agencies.”)

Unfortunately, as we’ve all discovered, the 1031 industry is TOTALLY UNREGULATED by any federal government entity, least of all the IRS whose regulations created this monster, and hardly regulated by the few states (Nevada and California?) that have made even a feeble attempt to promulgate regulations that would demand licensing, accountability, transparency, criminal or civil penalties or other meaningful oversight.

9. In addition to underwriting title insurance, LFG subsidiaries provide, among other things, appraisals, home inspections, and warranties for residential real estate transactions and perform specialized services primarily to its national and regional mortgage lending customers, such as real estate tax processing, flood zone determinations, consumer mortgage credit reporting, default management services, and mortgage loan subservicing.

10. LES, one of the Debtors, is one of these subsidiaries. Prior to the Petition Date, LES operated as a “qualified intermediary” under section 1031 of the Internal Revenue Code (the “Tax Code”). Generally, the Tax Code imposes taxes when property is sold or transferred and a gain is realized. Pursuant to section 1031 of the Tax Code, if a taxpayer adheres to certain guidelines, then all or a portion of the gains from the disposition of business or investment property can be deferred or reinvested into a new replacement property. These deferred gains, as well as the gains from the new property, are not taxed unless and until the new property is transferred and fails to qualify for tax deferral. To qualify for such tax deferral, the taxpayer must structure the transaction as an exchange of one property for another of “like kind.” 1031 exchanges typically are facilitated by a qualified intermediary, like LES.

11. During the course of its operations, LES entered into agreements (“Exchange Agreements”) with its customers whereby it would acquire the net proceeds of the sales of relinquished properties (the “Exchange Funds”) in accordance with requirements of the Tax Code in order to facilitate a like-kind exchange. Pursuant to the Exchange Agreement, LES takes sole and exclusive possession, dominion, control and use of all Exchange Funds, including interest, if any, earned on the Exchange Funds until the earlier of the consummation of a like-kind exchange or such other date or event as provided in the Exchange Agreement (as applicable, the “Termination Date”). The Exchange Agreements further provide that a Customer shall have no right, title, or interest in or to the Exchange Funds or any earnings thereon and that a Customer shall have no right, power or option to demand, call for, receive, pledge, borrow or otherwise obtain the benefits of any Exchange Funds, including interest, if any, earned on the Exchange Funds except that the balance of Exchange Funds, if any, held by LES after applying such Exchange Funds in accordance with the Exchange Agreement shall be paid to the Customer on the applicable Termination Date. As of the Petition Date, the Exchange Funds maintained by LES included funds acquired from approximately 450 customers pursuant to separate Exchange Agreements. While not the norm, approximately 50 of the Exchange Agreements (each, a “Segregated Exchange Agreement”) required LES to segregate the applicable Exchange Funds (the “Segregated Exchange Funds”). The remaining approximately 400 Exchange Agreements have no segregation requirement.

Segregated accounts SHOULD be “the norm!”

400 new innocent exchangers are about to enter bankruptcy hell wherein they will find the lifesavings they entrusted to their 1031, to the extent they weren’t already squandered on bad investments by LES, dissipated over months/years of self-perpetuating litigation the real point of which appears to be to tally up billable hours and “administrative fees” of court appointed functionaries to the point that they quickly outstrip any potential recoupment of their exchange funds. Case in point: as of September 2008, nearly 18 months after the 1031 Tax Group (Ed Okun’s grand embezzlement scheme) filed for bankruptcy, his 350 victims have received nothing, the court has retrieved less than $2 million from liquidating Okun’s assets but has toted up and filed claims for $24 million in “administrative fees” and they stand first in line with their hands out before any of Okun’s (or LES’ )victims will receive a dime!)

(ii) LES

16. As of the Petition Date, approximately $138.6 million in Segregated Exchange Funds were maintained in segregated LES accounts. These funds equal or exceed the claims of customers that are a party to one or more Segregated Exchange Agreements. In addition, as of the Petition Date, LES maintained approximately $46 million backed by investments in government treasury bonds and approximately $201.7 million (par value) in auction rate securities. These assets, which represent Exchange Funds acquired from approximately 400 customers (the “Commingled Customers”), are commingled. In the aggregate, Commingled Customers hold claims equal to approximately $191.7 million against LES.

If I’m reading the foregoing accurately, 50 exchangers had deposited $138.6 million with LES in segregated accounts which miraculously LES still has on deposit so they may actually see their funds again if they don’t get sucked into bankruptcy court and that court doesn’t acquiece to LES’ claims that even the segregated accounts are their property, not the exchangers’, as claimed in LES’ bankruptcy petition. In the Okun case, the bankruptcy court actually authorized the attorneys for the Debtors to pursue the exchange funds still held by the Colorado Capital Bank arguing that those funds were the property of the 1031, not the exchangers — some of which have since been used to pay adminstrative fees of the bankruptcy proceeding! The cozy “settlement” negotiated by the debtors attorneys with those of the bank provided for the bank and its attorneys to receive more than $800,000 in fees and an additional quarter million to cover future cost that might arise — all of which will come out of exchangers’ own funds — effectively including the costs of both sides of that litigation! Only in bankruptcy court would this not seem a huge step “Through the Looking Glass”!).

Of the $191.7 million LES owes its other 400 exchangers whose funds were “commingled,, it seems to have on deposit only $46 million (about 24% of what it owes those exchangers) having effectively blown the balance ($145.7 million) on a get rich quick scheme for its own benefit (does anyone seriously believe this investment of exchanger funds was intended to benefit the exchangers as LES will no doubt try to argue? — aka the Okun argument, which his defense attorneys appear poised to make in criminal court — “I was trying to get my clients a better return on their exchange funds, Your Honor…!” — pulleez!) Since those investments effectively have no monetary value today (see their sad, sad tale below), the bankruptcy court functionaries will certainly file motions to seize the $46 million because it represents “commingled accounts” and is thus considered easy pickins with which to pay their administrative fees…

Page 8
Since 2002, LES invested a portion of the Exchange Funds transferred to it in investment grade securities rated A or stronger at the time of the investment, including auction rate securities (“ARS’s”) backed by federally guaranteed student loans. An ARS typically is a debt instrument with a long-term nominal maturity for which the interest rate is regularly reset through a dutch auction. Until earlier this year, banks pitched ARS’s to corporations and wealthy individuals as highly-liquid and safe alternatives to cash, and LES’s investment goals on the Exchange Funds were to maintain the full liquidity necessary to meet customer claims.

19. The ARS’s purchased by LES, which were sold to it by certain financial institutions, were highly liquid for many years. Unfortunately, as has been widely publicized, the ARS market froze earlier this year and LES has been unable to liquidate the ARS’s previously purchased at any price near their par value. Indeed, although the aggregate amount of the cash and par value of the ARS’s held by LES exceeds the value of all funds received from LES’s customers, LES’s inability to sell, or borrow against, these securities ultimately precipitated its decision to cease additional customer transactions and terminate operations.

The boldfaced lawyerly-crafted sentence above is one of my favorites — a carefully parsed deliberately obtuse way of saying “Through greed and stupidity, we lost nearly $147 million of exchangers’ funds entrusted to us.” (Not to mention “…and what we didn’t lose, we’re now claiming belongs to us”!)

The following is excerpted from an Adversary Motion filed by Lubexpress, a company, which apparently had $9 million in what it thought was a segregated exchange account with LES that it is trying to get returned (good luck to them…As a non-lawyer myself, but based on the judicial abuse to which we Okun bankruptcy victims have been subjected, seems to me other LES segregated account holders would be well advised to join this motion as a class to minimize their individual costs, lend strength and expedite their own claims. Time is of the essence, you poor things…!):

15. On the Petition Date, counsel for LES stated on the record at the first day hearing
that LES (i) does not intend to consummate the Section 1031 exchanges that are the subject of its executory exchange agreements, and (ii) believes that the funds it is holding in both segregated and commingled bank accounts constitute property of LES’s estate. Further, the Court has entered an order prohibiting LES from, among other things, transferring funds from such bank accounts. These events constitute a breach of the Exchange Agreement.

19. LES is holding the Funds in trust for the Plaintiffs. LES and the Plaintiffs had the
capacity and intent to enter a trust agreement and the Exchange Agreement constitutes such agreement. The relinquished properties first constituted the res of the trust, which were then substituted by the Funds. The Funds are segregated in the Accounts and are clearly identifiable. LES is the trustee and the Plaintiffs are the beneficiaries of the trust.

20. Under the Exchange Agreements, the Plaintiffs and LES affirmatively agreed that
the Funds would be held for the benefit of the Plaintiffs. Section 6(b) of the Exchange
Agreement states that “LES IS ENTERING THIS EXCHANGE AGREEMENT SOLELY FOR THE PURPOSE OF FACILITATING TAXPAYER’S EXCHANGE OF THE RELINQUISHED PROPERTY FOR THE REPLACEMENT PROPERTY.”

21. Section 6(d) of the Exchange Agreement states that “LES shall only be obligated
to act as an intermediary in accordance with the terms and conditions of th[e] Exchange Agreement and shall not be bound by any other contract or agreement, whether or not LES has knowledge of any such contract or agreement or of its terms or conditions.”

22. Section 3(a) of the Exchange Agreement sets forth the requirement that LES hold
the Funds in the Accounts associated with the Plaintiffs’ names and taxpayer identification numbers.

23. Section 3(b) of the Exchange Agreement provides that the Plaintiffs get the
benefit of the accrued interest and assume the responsibility to pay any income tax on the interest.

24. Nothing in the Exchange Agreement confers to LES any beneficial interest in, or
risks associated with ownership of, the properties or the Funds. Rather, the Exchange
Agreement requires LES to accept the relinquished properties, transfer them to the buyers, hold the proceeds for 180 days or less, accept title to the acquired properties, and then transfer them to the Plaintiffs.

25. Section 7 provides that LES’s compensation for this trustee service is limited to a
$1,200 plus reimbursement of expenses. In contrast, the Funds exceed $9 million.

26. By reason of the foregoing, the Plaintiffs seek a declaratory judgment under
section 541 of the Bankruptcy Code that LES is holding the Funds in trust for the Plaintiffs and are thus not property of LES’s estate.

If I had any money left with which to bet (no longer a temptation thanks to Ed Okun and the Bankruptcy Court of New York’s Eastern District), I’d lay odds that the bankruptcy court will deny the motion since by LES’ own admission, the lion’s share ($138.6 million) of the exchange funds it currently holds are in those segregated accounts (plus a pitiable 24% ($46 million) of what it owes the poor exchangers whose funds were “commingled.”) Since bankruptcy court is a self-financing enterprise, all the court appointed functionaries will fight valiantly to make sure that $138.6 million is construed as assets of the “estate” and available to pay their salaries and expenses over the next several years thus fully insulating them from the nation’s current economic woes while plunging the innocent exchangers, whose funds they rightfully are, into financial ruin.

Vesta Strategies “Sales Pitch” Marketing Information They Forgot To Pull?

Information about Vesta Strategies LLC is beginning to come into view–and the view is quite ugly. Attempts to find old information about Vesta on the other hand is difficult to find. Yet with some digging, reminents of their marketing campaign can be found. The following is a pitch found on a social networking site for a Vesta Strategies employee:

Vesta’s Sales Pitch

“Just as McDonald’s doesn’t actually sell hamburgers, Vesta Strategies LLC doesn’t really sell 1031 exchange solutions. We sell personal service. For most anyone who utilizes the services of a qualified intermediary or accommodator, peace of mind and security are of high importance. As an established national provider of 1031 exchange solutions, Vesta Strategies LLC differenciates itself from the competition through personal, hands-on service. In addition to my own expertise, cour clients can draw from our large offering of resources in legal counsel, real estate practices, title questions, NNN leases, DST’s, and TIC’s.”

Final Pitch

At Vesta Strategies LLC, we specialize in virtually anything related to 1031 exchanges. We provide expert information about how to structure exchanges, how to find replacement properties, and whether or not an exchange makes sense for you on a particular transaction.”

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

Newsflash: Denver “Okun Victims” Sue Former IXG Founders

IBS affiliate WX1112.com Greensboro Winston-Salem, NC published this deansguide article June 21, 2008

The plot continues to thicken as swindled investors scramble to recover what few pennies exist from their embezzled 1031 exchange funds, many representing investor life savings, in the fallen Ed Okun 1031 Tax Group “Ponzi” scheme.

A concerned “citizen” sent the following link to a June 20, 2008 Denver Business Journal storyEx-clients sue IXG founders in 1031 Tax Group Bankruptcy.” According to writer Renee McGaw ex-Okun employees Daniel and Shirley McCabe are the subjects of the lawsuit and controversy.

The McCabes were the original owners of the Investment Exchange Group (IXG) in Denver until Okun purchased the business in August of 2006 through his 1031 Tax Group business.

In the Denver Business Journal article Jeffrey Cohen, attorney for Denver based victims of the McCabes and Okun, stated:

We believe that the McCabes misused and mishandled funds that were under their control”

Main Source

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

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?

Judge Lauck’s “Specific Findings of Fact that Okun was a Flight Risk”: If This Is True-Hidden Assets Must Exist

Norman’s Cay Cocaine Kingpin Carlos Lehder’s hideout courtesy cache.boston.com/…/10/05/1191605832_7450.jpg

After rereading the US Trustee’s Newsletter #6 a phrase struck me even though I read it a number of times. At the end of the newsletter in the last paragraph from Gerald McHale US Trustee for the Ed Okun case “Trustee Newsletter #6”:

“Edward Okun’s bail hearing was held on May 9, 2008 and Judge Lauck in the Eastern District of Virginia, the location of the criminal proceeding, denied bond and made specific findings of fact that Okun was a flight risk.”

“. . . specific findings of fact that Okun was a flight risk.”

What Can We Assume About The Judge’s Statement?

1. Ed’s “crying poor” plan, with nary a dime to his name, was an elaborate ruse to lull the court into thinking he was unable to run

2. Ed’s new court appointed attorney, usually reserved for people without any money, could be considered part of this ruse in order to persuade the court to free him on bond

3. If Ed were broke then why was his Miami attorney Rosenberg, who does not work for free, in Virginia during the bond hearing-that according to the “mystery caller”?

4. If Judge Lauck has proof that Okun is a flight risk then it is not difficult to deduce that there must be stolen funds hidden somewhere off shore or otherwise–you can’t escape the US Government on the cheap!

5. If Okun is a flight risk with hidden funds, it only makes sense that he would need accomplices in order to execute an escape plan–is the “mystery caller” such an accomplice? Hidden assets are not only monies but people willing to help or harbor an individual

6. The Bahamas, where Okun had his ill advised cash infusion smuggled, has been a notorious fugitive hideout for centuries having harbored Medillin Cartel heavyweight Carlos Lehder and international embezzler Robert Vesco

Newsflash: Ed Okun’s Bond Hearing Postponed To May 9

This just in from the Department of Justice and one of our train wreck friends Elizabeth, Ed Okun’s bond hearing scheduled for today (April 29) was canceled. The new date for Okun’s bond hearing is Friday May 9 at 2pm. The reason for the postponement? Okun’s appointed public defender asked for the postponement so your guess is as good as mine: preparation issues?

How do you represent a criminal like Okun to a court of law in hopes of gaining his freedom-even if it is a short lived freedom?

Here are the challenges Okun’s attorney faces

1. Ed is reportedly flat broke
2. Ed may have hidden funds offshore
3. Ed is definitely a flight risk
4. Ed has embezzled, without recovery to victims, at least $132million
5. Ed’s credibility and word are worthless

Against All Odds: Cases That Attorneys Represented the “Unrepresentable”

1. The OJ Case–Simpson walked to the amazement of the world
2. The “Nightstalker”— Richard Ramirez sits on death row the best he could have ever gotten
3. Polly KlausRichard Allen Davis how could anyone represent this piece of _hit?
4. Scott Peterson–Did anyone and I mean anyone ever believe this punk?
5. Rodney King’s Cops–just change the venue and everything goes bye-bye