Borrowing money

Federal judge SC sentenced Scot Kohn for pension loan scam


Scott Kohn and four co-conspirators have pleaded guilty to the national scam.

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The California man behind a $300 million Ponzi scheme targeting veterans and elderly investors has been sentenced to 10 years in federal prison.

U.S. District Court Judge Bruce Hendricks sentenced Scott Kohn on Thursday after pleading guilty to conspiracy to commit mail fraud and wire fraud for his role in orchestrating a complex two-pronged financial scheme , according to a statement issued by the United States. Prosecutor’s Office.

“Kohn and his co-conspirators traveled across the country to rob veterans and senior citizens who desperately needed their money,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina. “These hundreds of millions of losses will reverberate through the lives of victims long after the defendants have served well-deserved federal prison sentences.”

The fraud targeted both struggling pensioners who were running out of money – mostly disabled veterans – and investors looking to protect their retirement savings.

The case was prosecuted by Assistant U.S. Attorney William Watkins for the District of South Carolina and Attorneys Ehren Reynolds and Yolanda McCray Jones of the Civil Division’s Consumer Protection Division.

Through several companies, including Future Income Payments, LLC, Kohn “purchased” the pensions of disabled veterans. In exchange for an initial lump sum, Kohn would obtain the rights to the pension payments.

But what Kohn called a “purchase” was actually a “sharking loan with annual interest rates of up to 240%,” according to the US attorney’s office.

Kohn and his co-conspirators would then turn around and sell financial products to aged investors across the country who promised returns of over 6%. These returns were actually fueled by pension payments.

By the time Kohn’s seven-year program collapsed in 2018, it had locked more than 13,000 veterans into operating loans, which were then sold as risky financial products to more than 2,500 retirees.

Elderly investors, who thought they were investing their life savings in a safe “structured cash flow” product, lost more than $310 million, federal prosecutors said.

All the while, US prosecutors allege Kohn and his co-conspirators embezzled corporate money to fund their own lavish lifestyles.

Kohn, who was represented by Rose Mary Parham, was also ordered to forfeit $297 million and will be placed on probation for three years after his release from prison. Judge Hendricks also ordered Kohn to confiscate artwork and a home in the exclusive Napa Valley wine country, just down the street from the world-famous French Laundry restaurant, according to court documents.

Four other co-conspirators previously pleaded guilty to conspiracy charges for their role in the scheme. They have not yet been sentenced.