The man behind a pension fraud scheme that was adapted to indexed universal life sales, resulting in millions of retirement fund losses, dozens of lawsuits and a high-profile bankruptcy was sentenced to 10 years in prison Friday.
Authorities say Scott Kohn, 68, of Newport, California, caused $310 million in losses to more than 2,500 retirees and placed more than 13,000 veterans into exploitative loans.
Kohn 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, prosecutors said in a news release. 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 seniors to invest their retirement savings with FIP by making false assurances of a significant rate of return…
