Deliberations to start in Okun fraud trial

Deliberations to start today in Okun fraud trial Federal jury to consider 23 charges in an alleged $132 million operation

A U.S. District Court jury in Richmond is expected to begin deliberations today in an alleged $132 million fraud that victimized hundreds of people across the county.

The jurors yesterday listened to several hours of closing arguments, a year to the day since Edward Hugh Okun was initially indicted. He is being tried on 23 counts of conspiracy, mail and wire fraud, money laundering, cash smuggling and making a false statement.

"Ladies and gentlemen, this is a tough case," Barry J. Pollack, one of Okun's lawyers told the jury. "There is one issue and one issue only, and that is did Mr. Okun have the intent to defraud?"

The government failed to prove intent, Pollack said. Therefore, he urged, "you must find him not guilty of each and every count."

But Michael Dry, an assistant U.S. attorney, asked, "If Mr. Okun lacked the intent to defraud, then why did he resort to lies, threats and payoffs to keep it secret?" Dry asserted, "He's not a businessman who fell on hard times. . . . He's a criminal and he is guilty."

Okun owned two Richmond-based companies, Investment Properties of America and the 1031 Tax Group, involved in the alleged fraud. He bought six exchange companies that temporarily held money from clients' real estate sales, deferring their capital-gains taxes.

Evidence showed he started acquiring the exchange companies in August 2005, and authorities allege he soon began raiding the client accounts to buy more exchange companies to keep the scheme running and to pay for a lavish lifestyle.

. . .

From August 2005 to March 2007, Okun spent roughly $35 million on, among other things, a divorce, jewelry and boats, including a 131-foot yacht named Simone after his current wife, whom he married in a $171,000 wedding in 2005.

The government alleged that it was Okun's divorce, which required a $5.9 million settlement, that in part prompted Okun to start acquiring and raiding the exchange companies.

Former employees, accountants and lawyers -- both in-house and retained on the outside -- testified that they told Okun he should not be withdrawing the exchange money, which Brigham Cannon, a special assistant U.S. attorney, referred to as Okun's "piggy bank."

Okun's lawyers contend that Okun considered the withdrawals from the client accounts loans, that he intended to repay them all and that he had been repaying them up until the time a search warrant was executed at his offices.

Pollack told the jury that Okun "believes he can borrow as much as he wants for any purpose," as long as the clients get their funds back when needed. "He can buy airplanes, he can buy automobiles and, yes, he can buy jewelry for his wife," Pollack said.

"Mr. Okun loved his new bride. He was a wealthy man and he liked to spoil her," Pollack said. He said that even if borrowing the money broke a contract, "a violation of a contract does not mean there was a fraud. . . . They must prove intent to defraud."

Dry countered, "They'd have been loans if the clients knew what was happening to their money and they agreed to it. Don't fall in that trap of calling them loans -- they're thefts."

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