The federal authorities have arrested Scott Kohn of Future Income Payments. Kohn is accused of fraudulent scheme deprives veterans of disability payments in South Carolina. Kohn convinced his victims to transfer their retirement pensions and disability benefits in return for cash payments.
Like many other Ponzi schemes, he initially made some payments to the victims but most of the veterans he defrauded have received no cash return. Some have termed it one of the largest cases of fraud in South Carolina.
The South Carolina office of the U.S. Attorney brought up mail fraud charges against Kohn. An indictment was secured against him back in March but Kohn had been able to evade the authorities until now. On September 19, the U.S. Marshals Service was able to track down and arrest Kohn at Mission Beach in San Diego.
A major problem in Kohn’s scheme is that disability and retirement benefits of veterans can’t be transferred to Kohn’s firm as per federal law. This makes their transfer illegal right from the start. Kohn initially claimed to pay up to 8% on the money ‘invested’ by the people he targeted. In addition to veterans, he also targeted other investors and brought them into the scheme.
At the time of his arrest by the Marshals, Kohn and the companies he oversees owe nearly $297 million to his victims. Kohn’s scheme has been under the scrutiny of the regulators for a while. A number of state and federal agencies had previously declared his company operations suspicious or illegal. The Securities Commissioner of South Carolina, for instance, had previously ordered Kohn to shut down company operations.
In addition to the money he owes veterans and other victims of his scheme, Kohn is also facing a civil lawsuit. The Bureau of Consumer Financial Protection is seeking $501 million in civil penalties and damages from the founder of Future Income Payments.
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