OKUN SERIES: Swindled and angry, two find balm befriending other victims

WASHINGTON In 1970, 18 days after arriving in Vietnam, Kevin Callanan stepped on a mine. The young Marine was shipped home to recover from burns and shrapnel.

He was discharged in 1971, met Beth Hester on a blind date in 1972 and married her in 1975. Kevin, a carpenter, and Beth, a federal employee, bought a house, raised two children, invested wisely in real estate and retired.

Two years ago, their $854,000 nest egg was stolen by a man they did not know.

The crime was not violent and did not leave them destitute. So when Beth gave the keynote address at a recent event in Chesterfield County for crime victims, she found herself explaining what she was doing there.

"After 35 years of working, planning and saving, someone suddenly took what we thought was going to be our future away from us," she told the crowd.

The Callanans have been on a roller coaster since April 2007: returning to work, scrambling to limit the damage, monitoring a federal criminal case and enduring the bankruptcy proceedings of the Richmond-based company that ripped them off.

And they have not moved beyond anger toward the architect of the fraud, Edward Hugh Okun, who was convicted in March of 23 charges in federal court in Richmond. He faces a maximum of 400 years in prison when sentenced Aug. 4.

"I wouldn't piss on him if he were on fire," Kevin said.

Said Beth: "There isn't one cell in my person that has any inclination whatsoever to forgive the son of a bitch."

The Callanans have, however, found solace in friendships formed with some of the other victims in Okun's $126 million fraud.

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Beth, the 60-year-old daughter of a career CIA officer, spent part of her childhood traveling to Africa and other locales before the family settled in Washington. She says Kevin, 62, is the best thing that ever happened to her.

They sometimes finish each other's sentences when talking about their lives together. They have been fortunate, but they have also been smart and careful.

They bought a modest, two-bedroom Cape Cod in Northwest Washington in 1975 for $65,000. Kevin made additions, the area's real estate values soared and the now five-bedroom home has been appraised at more than $1 million.

There were other investments, too.

"We always had a rental property," she said. They bought a home in Maryland that they rented out. "That's what we did instead of the stock market or any of that stuff. We understood real estate," she said.

Not only did they understand and trust real estate, Beth added, "I'm married to a carpenter!"

When her father died in 2000, she inherited his nearby home, which they rented out for as much as $3,400 a month. In 2007, they decided to sell it.

"The market was hot," Kevin explained. And after 9/11, Beth said, she thought they should diversify their real estate holdings by buying property outside the Washington area in case there was another attack (they also owned a home on the Potomac River near Heathsville in Virginia's Northern Neck).

Her father's home sold for $875,000, and they cleared $854,000. "That allowed us to buy this place in New York on a small lake in the Adirondacks . . . a beautiful lot, just drop-dead gorgeous," Beth said.

The plan was to renovate and rent it out for retirement income.

Because they were going to use the money from the sale of her father's home to buy another rental property, Beth knew they could defer paying $124,000 in capital-gains taxes by taking advantage of section 1031 of the Internal Revenue Service code.

To do so, they had to place the $854,000 with a qualified intermediary exchange company to hold it until they closed on the Adirondack property.

They attended a 1031 seminar and hired specialist lawyers in Washington and New York to handle both ends. "We knew what we were doing. That's the shame of it. We knew what the hell we were doing," Beth said.

"I don't rush into anything," she added, noting that she dated Kevin for three years before marrying him. "Kevin always says once I make up my mind, I'm filled with indecision."

On April 16, 2007, they turned the money over to Security 1031 Services.

They did not know that the firm, and other 1031 companies, had been purchased by The 1031 Tax Group, one of Okun's companies. On April 27, federal investigators searched Okun's offices at 10800 Midlothian Turnpike, in response to a tip from a concerned employee of one of the 1031 companies Okun purchased.

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The first the Callanans knew anything was amiss was late on the night of May 13, as the closing for the New York property approached and the lawyer in New York called to say the $854,000 appeared to be missing.

The Callanans later learned they were among about 350 victims in a $126 million Ponzi fraud. That night, Beth cried, threw up and paced the floor in a fog of anxiety. "I felt powerless, directionless, hopeless and paralyzed. . . . I was such a mess I had to be medicated," she said.

Although the money was gone, if they did not complete the deal and buy the New York property, they would lose $50,000 in earnest money and have to pay the capital-gains taxes -- a $174,000 loss, Beth said.

Okun declared bankruptcy on May 14. The Callanans, under the mistaken impression that they would get their money back within months, borrowed against their home in Washington and their waterfront property in Virginia to fund the New York deal.

"We were bleeding to death," Kevin said. "I wouldn't have loaned it to me if I was on the other side of the table." They planned to pay those loans off when the money was returned through bankruptcy court.

The bankruptcy proceedings continue, and two years later they haven't seen a penny. They have had to sell their Heathsville property, and they hope to recover 20 cents on the dollar of what they lost. Kevin has gone back to work, and Beth is doing consulting -- when she is not investigating their loss.

"I did everything I could to find out more," Beth said.

She started the day she learned the money was gone. She wanted to know who Okun was, how he stole it and how he spent it. She contacted other victims and helped create a network.

"I went to meetings with other victims and posted articles online to warn other people so they couldn't be victimized like we were," she said. She and other victims on the East Coast attended hearings and made reports via e-mail to the others.

The Callanans managed to attend Okun's two-week trial in Richmond in March, staying overnight in inexpensive motels or commuting from Washington. Kevin wore his lucky Virginia Tech sweatshirt to court each day.

It was difficult to listen to testimony about how their money was spent.

"He couldn't constrain his greed, his self-indulgence, his need to give this [woman] he was married to these absurd luxuries. This is a man who never thought he was going to get caught, who thought he could do anything," Beth said.

The Internal Revenue Service said that from August 2005 to March 2007, Okun spent $35 million on a divorce settlement, jewelry and boats.

Kevin complained that testimony showed that Okun bought a car in Hawaii and paid $1,800 to have it shipped to the mainland. "He couldn't buy a car in Richmond?" Kevin asked.

"It's bad enough the son of a bitch stole the money, but he was pissing it away."

Beth cried when the jury convicted Okun of all 23 counts. Said Kevin: "I don't think anybody in that courtroom was more surprised that he got convicted than he was."

One victim was facing foreclosure as a result of the scam, and others helped her out. "No one who isn't one of our group of 350 can believe that people who've had their life savings stolen would be willing to loan money to anyone," Beth said.

"I can tell you why," she added. "It makes us all feel powerful again to be able to help someone. It makes all of us something other than just a victim."

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