Okun’s former wife to testify at fraud sentencing

Until his conviction this year in a $126 million fraud, Carol May had not heard a word about her first husband, Edward Hugh Okun, since he left Canada decades ago.

The news surprised her -- not that he was in trouble, but that he still was alive. "I thought somebody would have killed him," she chuckled. "It doesn't sound like his behavior changed very much through the years."

In a two-day sentencing hearing beginning tomorrow, U.S. District Judge Robert E. Payne could send Okun, 58, behind bars for the rest of his life in one of the largest frauds ever tried in a federal courtroom in Richmond.

The government has asked several of the roughly 300 victims who lost life savings to testify this week about the impact of the crimes.

May, of Toronto, also will attend. The government intends to call her as a witness.

In 1973, May, then Carol Cohen, married the charming scion of a wealthy family, but the magic faded quickly. She said, "I wanted the divorce. He was crazy. He was a wreck. His personality had just changed so much from when we first met."

Okun left Canada in the late 1970s amid fraud allegations and lawsuits filed against him by members of his own family.

May heard nothing of him again until March, when news media reports reached her of his fraud convictions in a scheme to finance another divorce, his current marriage to a Brazilian woman and the purchase of expensive cars, aircraft and homes.

The government is seeking a maximum 400-year sentence. In a recent sentencing memorandum, prosecutors wrote of Okun: "It is difficult to overstate the blatant breach of trust and the wanton greed [he] displayed."

Okun's lawyers are asking for a 10- to 15-year term and argue that just 20 years would amount to a life sentence for the ailing Okun, who had triple coronary bypass surgery at age 39.

In June a federal judge in New York hit Bernard Madoff with the maximum, 150-year sentence allowed under federal sentencing guidelines even though Madoff pleaded guilty, showed remorse and apologized.

Okun has done none of that. Instead, he toughed it out in a three-week jury trial in which he was convicted on all 23 counts and apparently has yet to express any remorse. He will be given a chance to speak before he is sentenced.

"Madoff was sentenced to the maximum punishment allowed by law and one that will ensure that Madoff never gets out of jail, which is exactly what the government seeks in this case," wrote prosecutors in court papers filed Wednesday.

Jayne W. Barnard, a law professor at the College of William and Mary, was in the courtroom when Madoff was sentenced and hopes to attend Okun's sentencing. In 2001, she urged that federal courts allow victims of white-collar crime to speak at sentencings and the rules were changed later to allow that.

Barnard said there are three primary reasons for allowing fraud victims a chance to speak. The first, she said, is that it is helpful for the judge. The next is because it can help the victims, she said.

"It is a very humiliating, demoralizing experience to be defrauded no matter how smart you are. No matter how clever your defrauder is, it's very humiliating. But for some of them, to go court and stand up and say, 'This is what's happened to me,' is very restorative," she said.

Finally, Barnard said, victim testimony "can really deliver a powerful message to the defendant. . . . I think many of these fraud perpetrators really don't have a conventional sense of conscience. They have no sense of the injury that they've inflicted," she said.

"I was very impressed by the fact that Bernie Madoff, who is a cold fellow, made reference to comments that the victims had made minutes before his own statement. He was listening very hard, and he heard at least some of what they had to say," Barnard said.

"And even if they don't hear it at the time of sentencing, they usually have a long time to ponder what has been said in their presence," she said.

. . .

Okun's scam used his now-defunct, Richmond-based businesses, Investment Properties of America and The 1031 Tax Group. He moved the firms to Richmond from Indianapolis in 2005 when a key employee -- now facing 10 years in prison -- would not leave Richmond.

In August 2005, Okun's The 1031 Tax Group began acquiring other 1031 exchange companies, which temporarily hold money from clients' real estate sales, deferring their capital-gains taxes under Section 1031 of the tax code.

Authorities say that during the same month he started buying 1031 companies, Okun began raiding the client accounts, in part to buy more 1031 companies to keep the scheme running, as well as for lavish spending.

In court filings, the government says that unlike with Madoff, "this is not a case where the victims sought to invest their money with Okun, knowing that they were putting it at risk. Instead, the victims followed IRS requirements and entrusted Okun's companies with their hard-earned money."

"In return for their trust, Okun stole their money," prosecutors said.

The government believes Okun's romance of and marriage to Simone Bolani in 2005 helped lead to the fraud -- Okun needed nearly $6 million to divorce a wife in Indianapolis.

Okun, then 54, married Bolani, then 27, in a $171,000 Miami ceremony in December 2005. Including the divorce settlement, from August 2005 to March 2007 Okun spent $35 million on jewelry, expensive cars and an $8.3 million yacht he named "Simone."

In January 2007, Okun treated a small dinner party in the Bahamas to a $56,525 meal. He later disputed $29,065 of the tab saying the cognac was $1,008 a bottle -- not per shot.

. . .

Though the clients will recover some of their money through bankruptcy court, lives were disrupted, small fortunes were spent on legal fees, and retirements canceled or delayed.

A Web site, http://www.freeokun.com, blames Okun's failures on others, describes him as a self-made millionaire, and says the government hid evidence that could have helped his case. It is not known who created the Web site or who posted the information.

Okun did not testify at his trial, but his lawyers said he borrowed, not stole, the money from the accounts and always intended to pay it back.

May, now an owner of an interior design business in Toronto, said she believes that's bunk. "His intent has never been to pay anybody back. That's just his way of twisting it to make it sound like he had no intentions to do wrong," she said.

"In the four years we were together he bought a Rolls Royce, he bought a Mercedes, he bought an Aston Martin. . . . He was extravagant," May said. "To me, it's almost a repeat of exactly what it was like when he was here and we were married," she said.

As things got worse, she said, "he would dig deeper and deeper for money."

In the 1970s, according to the U.S. government's sentencing memorandum: "While in his 20s in Canada, [Okun] stole $150,000 from his father-in-law and was sued by his own sister and paternal uncle for improper business dealings."

Prosecutors say they will present testimony that he left Canada to avoid paying civil judgments.

Okun's lawyers say the government claims about his behavior 30 years ago are unsubstantiated and that aside from the current fraud convictions, Okun never had been arrested and charged with a crime, other than a decades-old driving-while-intoxicated charge.

But, May said, "if I can in any way demonstrate that his behavior in [recent years] was simply an enlargement of how he was at age 25, then perhaps it will be evident that he has been a thief for a long, long time."

"I don't really wish him ill, but, you know, he has done things that he's responsible for, and he shouldn't get away with it," she said.

Contact Frank Green at (804) 649-6340 or .