GREENVILLE, S.C.—A man has been charged with bilking thousands of U.S. military veterans out of their pension money.
United States Attorney Sherri A. Lydon said Scott A. Kohn, 64, from Future Income Payments, LLC (FIP), has been charged in a federal Indictment alleging a conspiracy to engage in mail and wire fraud.
Kohn was arraigned before a United States Magistrate Judge in Greenville.
According to the indictment, FIP operated a Ponzi scheme in which it actively recruited pension-holders who were desperate for money, including many veterans of the United States armed forces. The pensioners made monthly payments to FIP in exchange for a lump sum payment or loan. The adjusted annual percentage rate on these transactions often exceeded 100%, the Department of Justice reported.
FIP then solicited investors to purchase “structured cash flows,” which were the pensioners’ monthly pension payments. FIP promised the investors a rate of return between 6.5% and 8%.
‘Active Steps to Conceal’ Activities
“It took active steps to conceal from the investors the usurious nature of its transactions with the pension holders. FIP diverted new investor funds flowing into the business to fund payments to earlier investors in order to keep the scheme operational. When FIP ceased doing business in early 2018, investors were owed approximately $300 million. The scheme alleged in the Indictment victimized over 2,600 individuals,” the DoJ stated.
“The rule of law is essential to a prosperous economy, and those who avail themselves of our marketplace are expected to abide by our laws,” said Lydon. “The scheme alleged in this Indictment took advantage of pensioners facing difficult financial situations – including veterans of the U.S. armed forces – and preyed upon innocent investors to the tune of roughly $300 million.”
The maximum penalty Kohn could face for the conspiracy charge is 20 years in federal prison and a fine of $250,000.