ProxyAuthSecurityHandler returns java.io.IOException: Unable to tunnel through proxy. Proxy returns "HTTP/1.1 407 Proxy Auth Required"

I try to connect to a server via https that requires authentication.Moreover, I have an http proxy in the middle that also requires authentication.
I use ProxyAuthSecurityHandler to authenticate with the proxy and BasicAuthSecurityHandler to authenticate with the server.
Receiving java.io.IOException: Unable to tunnel through proxy. Proxy returns "HTTP/1.1 407 Proxy Auth Required"
at sun.net.www.protocol.http.HttpURLConnection.doTunneling(HttpURLConnection.java:1525)
at sun.net.www.protocol.https.AbstractDelegateHttpsURLConnection.connect(AbstractDelegateHttpsURLConnection.java:164)
at sun.net.www.protocol.https.HttpsURLConnectionImpl.connect(HttpsURLConnectionImpl.java:133)
at org.apache.wink.client.internal.handlers.HttpURLConnectionHandler.processRequest(HttpURLConnectionHandler.java:97)

I noticed that the implementation of ProxyAuthSecurityHandler is expecting response code 407 however, during debug we never get to the second part due to the IOException thrown.

Code snap:

ClientConfig configuration = new ClientConfig();
configuration.connectTimeout(timeout);

MyBasicAuthenticationSecurityHandler basicAuthProps = new MyBasicAuthenticationSecurityHandler();
basicAuthProps.setUserName(user);
basicAuthProps.setPassword(password);
configuration.handlers(basicAuthProps);

if ("true".equals(System.getProperty("setProxy"))) {
configuration.proxyHost(proxyHost);
if ((proxyPort != null) && !proxyPort.equals(""))

{ configuration.proxyPort(Integer.parseInt(proxyPort)); }

MyProxyAuthSecurityHandler proxyAuthSecHandler =
new MyProxyAuthSecurityHandler();
proxyAuthSecHandler.setUserName(proxyUser);
proxyAuthSecHandler.setPassword(proxyPass);
configuration.handlers(proxyAuthSecHandler);
}

restClient = new RestClient(configuration);
// create the createResourceWithSessionCookies instance to interact with

Resource resource = getResource(loginUrl);

// Request body is empty
ClientResponse response = resource.post(null);

Tried using wink client versions 1.1.2 and also 1.2.1. the issue repeats in both.