FOR IMMEDIATE RELEASE
MARCH 18, 2008

The Trustee in the Chapter 11 Bankruptcy of The 1031 Tax Group, Gerard A. McHale, Jr, has learned this morning that on March 17, 2008, a federal grand jury in the Eastern District of Virginia, Richmond Division, returned a sealed three count indictment against Edward H. Okun, which was unsealed on March 18, 2008, when Mr. Okun was arrested in Miami Beach, Florida.  The Trustee understands that Mr. Okun is in custody and is being returned to Richmond, Virginia, for a bail hearing.

The indictment charges Mr. Okun with (1) one count of mail fraud for the misappropriation in 2006-07 of $132 million of funds of the 1031 Tax Group and it’s affiliated companies, in violation of 18 U.S.C. §1341; (2) one count of bulk cash smuggling for the transfer of $15,000 in cash to the Bahamas on January 22, 2007,in violation of 31 U.S.C. § 5332; and (3) one count of false declaration in connection with Okun’s testimony at an evidentiary hearing before the judge supervising the grand jury, in violation of 18 U.S.C. § 1623(a).

The indictment also seeks forfeiture from Mr. Okun of $132 million.  At the same time, the Government obtained a Restraining Order as to Mr. Okun’s assets, wherever located, for up to $132 million.

The indictment was obtained by the combined efforts of the United States Attorney’s Office for the Eastern District of Virginia and the United States Department of Justice, Criminal Division, aided by agents of the FBI, United States Postal Service, and IRS.

The Trustee is grateful for and commends the efforts of the Government and these agencies in conducting this investigation in order to bring some measure of justice to those victims of Mr. Okun’s scheme, and he is looking forward to their continued efforts, to the trial of this matter, and to its successful conclusion.

The Trustee and his own team of professionals are vigorously pursuing their own investigation and the various civil remedies that are available to the Trustee, in order to maximize the recovery for the bankruptcy estate.  They have cooperated with the Government in every appropriate way and will continue to do so.

On October 26, 2007, the Bankruptcy Court for the Southern District of New York, in the pending 1031 Tax Group bankruptcy, approved an agreement pursuant to which Okun and his wife Simone Bolani transferred all but a few of their assets to the bankruptcy estate of the 1031 Tax Group.  The Trustee has been pursuing the collection and liquidation of these assets.  The Restraining Order obtained by the Government does not interfere with the Trustee’s ability to obtain and liquidate those assets, and specifically provides that it does not reach the assets transferred to the estates and now under the control of the Trustee.  Rather, the Restraining Order restrains any other assets Okun may have concealed, or failed to transfer, in order to preserve them for possible forfeiture. 

 Indictment Order for Edward H. Okun (PDF)

 Restraining OrderAgainst Edward H. Okun (PDF)