Real estate exec with lavish lifestyle accused of $160M fraud

A high-flying Carmel businessman who moved his base of operations to Miami a couple of years ago is accused of burning through
$160 million of investors' money in the collapse of his real estate empire.

Edward Okun and his Richmond, Va.-based Investment Properties of America owned Crossroads Transportation and Logistics in
Park 100, and a strip center at Michigan Road and 79th Street. Big holdings elsewhere included the 1.1-million-square-foot
West Oaks Mall, in Houston, and Central Regional Mall, in Salina, Kan.

Investigators believe Okun–who made headlines locally in 2005 when he pulled out of a deal to buy ATA Airlines commuter
carrier Chicago Express and move it to Indianapolis–used investor money to fund a lavish lifestyle that included four mansions,
a helicopter, three airplanes, 20 automobiles and a 130-foot yacht.

Investment Properties filed for Chapter 11 bankruptcy in November. His investment firm, The 1031 Tax Group, and more than
a dozen affiliated companies around the country, sought bankruptcy in May.

The 1031 Tax Group was named after a section of federal tax code that allows certain commercial property owners to defer
capital gains taxes by reinvesting proceeds from property sales into other real estate. Money held by 1031 Tax Group was sheltered
from taxes until investors put their gains into other properties later.

But last year, investors began complaining that money they entrusted to Okun had vanished.

In fact, Okun and his Investment Properties had "borrowed" funds investors had placed in 1031 Tax Group, according
to a report by James Lukenda, a managing director of Huron Consulting Group. A New York bankruptcy court appointed Lukenda
as 1031's chief restructuring officer last year.

The borrowings, in the form of unsecured notes, totaled at least $132 million, Lukenda said in filings.

It was all a big scam, according to attorneys for investors.

"Okun looted at least $150 million that was entrusted to the [1031 Tax Group] in exchange for promissory notes for which
there was no reasonable basis of repayment," wrote Jay Teitelbaum, a White Plains, N.Y., attorney representing nine investors
who claim they're owed $5.2 million.

Suits brought by 1031 investors around the country allege their money supported Okun's outsized lifestyle. Locally, court
records show, his holdings included a home at 10548 Coppergate Drive in Carmel that Okun valued at $1.9 million.

A criminal investigation apparently is under way. Court filings indicate that the U.S. Postal Inspection Service in 2007
seized records from one of Okun's Virginia offices. Lukenda stated in court filings that the U.S. Attorney's Office
in Richmond launched a probe last year.

Neither Okun nor his Miami-based criminal attorney, Michael Rosen, could be reached for comment. Miami apparently has been
Okun's base of operations since 2005, when he moved into an oceanside estate there.

One thing is clear: Sifting through the rubble of Okun's real estate holdings to figure out what's left for creditors
won't be easy.

"To put it mildly and colloquially, as with most of Okun's entities, the accounting was a bit of a mess," bankruptcy
trustee Gerard A. McHale Jr. told investors and creditors this month.


Few around central Indiana heard of Okun until April 2005, when he became winning bidder for Chicago Express, a fleet of
Saab turboprop aircraft that once ferried passengers to and from ATA Airlines' Chicago Midway Airport hub.

Indianapolis-based ATA had filed for Chapter 11 bankruptcy in October 2004 and was desperate to shed assets. In 2005, Okun's
attorney boasted in The Indianapolis Star that Okun, who lived in Carmel with then-wife Dorothy, would make Chicago
Express "the premier regional airline in the country."

But a few weeks later, the deal collapsed. Okun cited concerns it would take too long for federal regulators to review the
deal. He told IBJ that ATA "misrepresented the transaction substantially" and fought to get back his $100,000
security deposit from ATA.

The following month, locally based Dreyer & Reinbold Racing LLC sued Okun's Investment Properties, charging it failed
to make $450,000 in payments for an Indianapolis 500 sponsorship. Okun countered that it was the racing team that breached
the agreement.

Around the same time, his marriage was falling apart. In April 2005, he filed a petition for legal separation in Hamilton
Circuit Court.

Okun turned his attention to building his empire. Lukenda found that in August 2005, Okun began purchasing 1031 property-exchange
companies, ultimately snapping up six for a total of $27.5 million.

He also wed again. The Miami Herald reported that Okun, who is in his late 50s, now is married to Simone Bolani,
a 29-year-old who had owned a beauty salon in Miami Beach.

Court records describe Okun as a "Canadian-born businessman and race-car enthusiast" and say he paid $6.7 million
in 2005 for the couple's 6,500-square-foot mansion on Miami's Hibiscus Island.

In 2004 and 2005, Okun also acquired two houses in New Hampshire–one for $1 million and another for $10 million. And there
was his home in Carmel, which he'd owned since 2001.

Okun and his wife used their own aircraft fleet to visit personal and business properties. Their financial statements from
last May claimed assets of $659 million–including a Bell 800 Ranger helicopter, Lear Jet 25D, Gulfstream G2 and Gulfstream
G2B collectively valued at $10.7 million.

Okun kept the airplanes at Indianapolis Executive Airport in Hamilton County.

And then there were the automobiles: all 20 of them, worth an estimated $2.1 million. Among them were two Ferraris, two Lamborghinis,
a Bentley and a Rolls Royce Phantom. He also listed four Indy cars, which he claimed were worth $300,000.

The Okuns listed boats worth $15.5 million, including the 131-foot yacht "Simone," named for his wife.

Assets elusive

But by the spring of 2007, Okun's empire was taking on water.

Creditors pounced, including an aviation company that filed a petition in Marion Superior Court to seize the Lear Jet and
one of the Gulfstream planes at Indianapolis Executive Airport.

Okun either sold or transferred the Carmel house to a creditor last September.

For a while, it appeared Okun would be able to make good on investors' claims of more than $160 million. The 1031 Tax
Group, whose sole member was Okun, initially indicated it had more than $300 million in assets that could be tapped. But by
October, it became clear many of Okun's assets were highly leveraged.

"Any hope for a prompt exit from Chapter 11 has seemingly vanished. Okun has proven that he is unreliable [or worse]
in delivering in any timely way on the promises he made at the start of these cases and many times since," Judge Martin
Glenn of the U.S. Bankruptcy Court for the Southern District of New York wrote in October.

The court appointed McHale as trustee and approved a plan under which the Okuns gave up most of their assets for the benefit
of creditors.

But some creditors were incredulous that Okun wasn't left empty-handed. He and his wife were allowed to keep a mansion
in Florida and New Hampshire, for example, plus a Hummer and a Lamborghini.

McHale has had mixed success in wringing cash from assets. For example, his team managed to sell Okun's helicopter, generating
$800,000. But properties such as Crossroads Transportation & Logistics, which Okun moved from Indianapolis to Miami last
spring, were too far gone and were shuttered.

And although one of the New Hampshire homes was sold for $1.6 million, a former Okun attorney held a lien on the property
and likely will get the proceeds.

Okun told The Miami Herald in December that he is "misunderstood." In court records, he blamed a nationwide
slowdown in real estate, poor local management and a bank that froze millions of dollars in company accounts.

McHale told investors in December that Okun had bought properties in distress with the intention of improving them to generate
profit. The problem, he said, is that "Mr. Okun generally either paid close to the top of the market for the properties
or certainly managed to finance those properties and leave little if any equity available for recovery purposes."

Not only did most of the properties have serious operating difficulties and negative cash flows, but many also were financed
with non-conventional lenders "providing financing at relatively high interest rates."

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