"Edward Okun's investors trusted that he would keep their funds safe," assistant attorney general Lanny A. Breuer says in an announcement from the Department of Justice. "But evidence introduced at trial showed that Mr. Okun instead used those investor dollars to finance a lavish lifestyle and to grow his own business holdings. Today's sentencing provides a measure of justice for those who lost so much to Okun's deceit."
"Because of Edward Okun's crimes, many victims in this case experienced near financial collapse and personal pain," US attorney Dana J. Boente adds in the DOJ announcement.
The government sought a sentence of as much as 400 years. In its sentencing memorandum, the government argued that "unlike other recent high-profile fraud prosecutions, Okun's victims never asked the defendant to invest and risk their money. Instead, the victims entrusted their money with the defendant relying on the defendant's promises that he would hold their money safely in bank and escrow accounts for a short, defined period of time." The memorandum also states that "To date, Okun not only continues to refuse to accept responsibility for his criminal conduct, but also continues to make misrepresentations that he did nothing wrong and blames others for his criminal conduct."
In a filing with the court on his behalf, attorneys for 58-year-old Okun argued "that a fair and reasonable sentence for Mr. Okun would be no more than 15 years, as any greatersentence would effectively be a life sentence." According to filing, "Mr. Okun suffers from significant health problems--he had a triple coronary bypass surgery in 1990 when he was 39 years old." His filing included comparisons to the recent cases and sentencings in two other high-profile fraud cases, those of Bernard Madoff, sentenced to 150 years, and Marc Dreier, sentenced to 20 years.
Okun lived in Miami when he was originally arrested on a three-count indictment in March 2008. After being held at a Florida detention center he was transferred to a jail in Virginia, and has remained behind bars since. Among his other business interests was a commercial property investment firm, Investment Properties of America, which sold tenant-in-common investments.
In July 2008, Okun was charged again, in a 27-count superseding indictment. Also named in the superseding indictment was former IPofA chief operating officer Lara Coleman. Coleman ultimately pleaded guilty to several charges, according to the Department of Justice, and agreed to a 10-year prison sentence as part of her plea bargain. In addition, two other former Okun employees--Okun Holdings Inc. CFO Robert D. Field II and Richard B. Simring, chief legal officer of Okun Holdings and, at one point, interim CEO of 1031 Tax Group--each pleaded guilty to conspiring to defraud 1031TG customers. Coleman, Field and Simring are scheduled for sentencing on August 13. They also agreed to forfeiture.
In addition to his 100-year sentence, Okun was ordered by Judge Payne to forfeit $40 million. It is likely that he has few assets remaining, however; most of his assets were handed over to the trustee in the 1031 Tax Group's chapter 11 bankruptcy case, which was first filed in May 2007. In his latest newsletter posted on his website, the trustee, Gerard A. McHale Jr., indicates that distributions to exchange client victims could be made before 2009 is over, if a number of legal proceedings progress as expected, including an October 7 confirmation hearing for his reorganization plan. A class-action suit filed against a number of individuals and entities in connection with the 1031 Tax Group scheme is pending in a California court, as well.
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