AJ Foyt sponsor could be heading to jail
A Miami Beach businessman is accused of squandering $160 million from investors. He signed an agreement that let him keep his two multimillion-dollar homes.
Last July in Michigan Jeff Bucknum, A.J. Foyt and Ed Okun announce new marketing partnership
Okun poses with Foyt team
From his waterfront estate on Hibiscus Island, Edward Okun oversaw one of the nation's fastest-growing tax-shelter companies -- a haven for wealthy investors looking to save big money on real-estate ventures.
The flashy 59-year-old businessman amassed a reported personal fortune of $659 million -- with all the trappings: a 130-foot yacht, a fleet of luxury cars, a helicopter and several private jets. But the empire Okun built is now unraveling amid a federal investigation, lawsuits and claims by hundreds of investors who say they were fleeced of $160 million in one of the largest business collapses of its kind.
The company Okun was trying to build into a national name is now in bankruptcy and his possessions, including his lavish Mediterranean estate, are for sale. At an October court hearing, a court-approved fiduciary told a New York bankruptcy judge that Okun had siphoned the money from his clients. ''He has betrayed the trust of many, many people and has hurt them very deeply,'' said Edward Moran.
Okun told The Miami Herald he is misunderstood. But he won't talk about his situation further because of his mounting legal problems.
''I'm dying to tell what happened,'' he said. ``Nobody knows the truth.''
In court records, Okun has blamed the meltdown on the nationwide slowdown in property sales, the failures of local managers and a bank's decision to freeze millions of dollars in company accounts. Said Okun's criminal lawyer, Miami's Michael Rosen: ``There's a tremendous amount of misinformation going on. . . . There is a lot he did do properly. I guess it will become my job at some point to get that known to the public and the investors and the government.''
Federal prosecutors and postal agents have seized records from Okun's headquarters in Virginia in an effort to trace the flow of money from investors to business accounts controlled by Okun in the past two years.
More than a dozen of the 1031 Exchange Group's alleged victims live in Florida.
Former Broward Sheriff's Office Detention Deputy Brian Kelly and his wife, Nadine, say they lost $50,000 this year that they had hoped to use to buy an investment home in North Carolina.
''We're hurting. We wanted to buy another house so in a couple of years we could retire,'' said Kelly, who owns a Cape Coral air-conditioning business.
A trustee was appointed Oct. 23 to oversee the bankruptcy case after Okun's repeated promises to raise new money fizzled, records show. In a court order, the judge referred to Okun as ``unreliable (or worse).''
Gerald McHale, the trustee responsible for tracking down assets of the 1031 Exchange Group, did not respond to repeated interview requests.
The case represents one of the largest failures in the emerging industry known as 1031 businesses -- specialized firms created to legally allow investors to avoid paying taxes -- which carry virtually no government oversight.
Okun is not the first Miami high-roller whose business empire has collapsed, leaving hundreds of angry investors.
They claim he spent millions buying personal properties like his lavish, $23 million home in New Hampshire, a 130-foot yacht named after his 29-year-old wife, who until recently owned a beauty salon in Miami Beach.
Other assets, as reported by the couple in a financial statement in May: three jet aircraft, a helicopter, a 38-foot Cigarette boat, Lamborghinis, Ferraris, a Rolls-Royce Phantom, Bentley Continental, Land Rover, Aston Martin and four Indy cars. A racing enthusiast, Okun sponsored IndyCar drivers for the team of four-time Indianapolis 500 winner A.J. Foyt last year. Miami Herald