More On Now-Defunct 1031 Exchange Intermediary, $160M In Trust Money Missing

In Indiana, the Indianapolis Business Journal reports on embattled businessman Edward Okun and his Richmond, Va.-based Investment Properties of America:

• 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. [...] Investigators believe [Edward] Okun [...] 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.

For more, see Empire crumbles (Real estate exec with lavish lifestyle accused of $160M fraud).

Go here for more on Edward Okun.

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