1031 Exchange $126 Million Fraud Scheme

[Johnson H.]

This is a pretty crazy story of one man using the escrow accounts of 1031 exchange to fund his lifestyle. Only after $126 million later does it all come crashing down. The conman never admits to fault!  Many lost their 1031 exchange money to this loser. Always do business with a reputable company!

American Greed Video

Bloomberg - Con Man Edward Okun Gets 100 Years for Fraud Scheme

[Bill Exeter]

Hi Johnson,

Slightly old news.  He was convicted in 2009.  The prosecutor asked for 400 years and he was sentenced for 100 years ... Thank God!  We won't be seeing him anytime soon.  He got what he deserved.

Ed Okun, for those who do not know the entire story, bought a number of 1031 Exchange Qualified Intermediaries over a relatively short period of time and then proceeded to "borrow" the 1031 Exchange funds for personal investments and living expenses with the intent to pay them back.  He got caught when the market crashed and there was no more 1031 Exchange funds available to buy clients' replacement properties and close on the 1031 Exchanges.  The story is vastly over simplified, but it gives you an idea of what happened.

You make a very good point.  Investors should make sure that they are dealing with a company that has a long track record and a good reputation.  Ed was not well known and had only recently bought his way into the 1031 Exchange industry.