Judge Bruce Hendricks of the U.S. District Court for the District of South Carolina sentenced a California man today to 10 years in prison for his role as the ringleader of a nationwide Ponzi scheme that exploited military veterans in desperate financial straits and targeted elderly investors seeking a safe retirement investment.
Scott Kohn, 68, of Newport, California, ran a corporation called Future Income Payments LLC (FIP), formerly known as Pensions, Annuities, and Settlements LLC. From April 2011 until April 2018, Kohn and his co-conspirators used FIP as a vehicle for a nationwide Ponzi scheme.
Kohn and his co-conspirators solicited pensioners experiencing financial distress, most of whom were military veterans, by offering an upfront lump-sum payment in exchange for an assignment of the rights to their monthly pensions and disability payments. Even though the assignment transactions were characterized as “sales,” they were, in fact, usurious loans with annual interest rates of as much as 240%.
Kohn and his co-conspirators – working through a network of hundreds of financial advisors and insurance agents nationwide – then solicited thousands of seniors to purchase FIP’s “structured cash flows,” which were the pensioners’ monthly pension payments. Kohn and his co-conspirators induced these seniors to invest their retirement savings with FIP by making false assurances of a significant rate of return on their investment, concealing the usurious…
