Trial begins for businessman accused of $132 million fraud

By: Frank Green | Richmond Times Dispatch
Published: March 04, 2009

Is Edward Hugh Okun a conniving liar and thief who masterminded a $132 million fraud with 577 victims, some of whom lost their life savings?

Or was he a successful, if at times overly aggressive, businessman who never intended to defraud anyone, who borrowed -- not stole -- money and intended to repay it?

In a trial that started yesterday, a U.S. District Court jury has been asked to decide who the real Okun is. Okun, 58, was the owner of two Richmond-based companies allegedly used in the fraud: The 1031 Tax Group and Investment Properties of America.

For Michael Dry, an assistant U.S. attorney, the answer is clear: "The defendant lied to hundreds of people who were clients of his companies in order to get his hands on a hundred million dollars of their money."

Dry told the jury in his opening statement that Okun acquired companies holding clients' money in accounts that Okun viewed "as his own personal piggy bank."

Dry said that in February 2005 in Miami, Okun, who was married and lived in Indianapolis at the time, met Simone Bolani of Brazil.

He separated from his wife, moved to Miami and proposed to Bolani in April 2005.

Okun bought six companies that temporarily held the proceeds of clients' real estate sales, deferring capital-gains taxes. He started acquiring companies -- and allegedly looting them -- in August 2005 about the same time he signed a divorce-settlement agreement.

The way Okun stole money may have been complicated, said Dry, but not the motive: "personal greed." Among other things, Dry said, Okun spent clients' money on a 131-foot yacht, his $5.9 million divorce settlement, aircraft and luxury homes.

Carolyn Grady, one of Okun's lawyers, said in her opening statement that "there's no question Mr. Okun loved to spend money and there's no question Mr. Okun loved Simone." He was even known to some as "Mr. Earn and Burn," she told the jury.

"But that doesn't make him a criminal," she said. "He's good at making money. He loved to make money."

Before he ever bought one of the 1031 companies, he was a successful businessman who owned a 106-foot boat and expensive automobiles and separated from his first wife in 2004, not after meeting Bolani, she said.

Grady conceded that he was a tough, demanding boss and that "sometimes he was secretive to the point of paranoia."

Among other things, she said, he relied on legal advice that it was legal to borrow money from the client accounts. She also said subordinates failed him, leading to the collapse of his business when his offices were searched by authorities in April 2007.

"The problem is, he ran out of time," Grady said.

"In the end people lost money, a lot of money, in some cases their life savings," she said. But, she told the jury, that was not why they were there. The government must prove his intent to break the law, she said.

Grady told the jurors, "Mr. Okun had no intent to defraud these people."

Contact Frank Green at (804) 649-6340 or fgreen@timesdispatch.com.