Miami businessman Edward Okun promised last October to allow a court-appointed trustee of his failed real estate company to sells his assets in order to repay $150 million to investors who lost their life savings when 1031 Tax Group went bankrupt. Now, Okun wants to back out of the deal, alleging his trustee, Gerald McHale, hasn’t held up his end of the deal which was supposed to allow Okun to keep two multimillion dollar homes and two automobiles.
McHale has been selling off Okun's luxury items including a 132-foot yacht for $9 million, several jets and more than a dozen exotic cars (some of which Okun refused to hand over) to pay back creditors of Okun's failed tax shelter. Okun now claims McHale breached their deal when he failed to block one creditor from trying to seize the houses and cars and the deal has entered Okun and his family into “indentured servitude for the rest of our lives with no house or living budget.”
Okun has been accused of fraud in operating 1031 Tax Group, a real estate tax shelter. It allowed investors to sell investment properties and defer capital-gains taxes if they re-invest the proceeds in similar-type properties within 180 days. The investors can’t touch the money from the sale and the money must be used for the purchase of new property.
1031 Tax Group collapsed after Okun was accused of taking $150 million of his investors’ money to pay for real estate transactions at Investment Properties of American LLC, a separate company also owned by Okun. About 300 investors nationwide were owed $150 million when 1031TG filed for Chapter 11 protection in May last year which listed assets of $154.6 million and debts of $152.1 million.
The U.S. Attorney's Office in Richmond, Va., and the U.S. Postal Inspection Service are also investigating Okun’s dealings and the conversion of funds from creditors.
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