Advisors Face $100 Million Retirement Scheme Suit

Advisors Face $100 Million Retirement Scheme Suit

Published by 401K Specialist Magazine
August 24, 2018
By Jessa Claeys

 

A group of insurance agents, brokers, financial planners and investment advisory firms spanning the country were working together to allegedly scam thousands of investors out of retirement funds totaling $100 million.

Their leader? Ex-felon Scott Kohn, owner of a private investment firm in Nevada called Future Income Payments LLC (FIP).

Targeting what should be some of the most respected members of society—police officers, teachers and veterans—FIP and its network of middlemen are being accused by the law firm Peiffer Wolf Carr & Kane (PWCK) of encouraging “investors to scrape together all possible funds from retirement accounts, savings and home equity refinancings to buy into ‘structured cash flows,’” or pension advancement arrangements.

In exchange for deeply discounted lump-sum pension buyouts, the purported FIP scheme promised investors a monthly income stream for a specified period of time, typically ranging from five to 10 years. Many pensioners were also persuaded to purchase life insurance and indexed universal life insurance policies, according to a statement by PWCK.

Attorneys allege the arrangement involved FIP paying hefty commissions to agents who peddled its products.

“These cases are true horror stories in terms of lack of disclosure to investors. Investors were never told that Scott Kohn, the sole owner and manager of FIP, is a convicted felon who has served time in a federal penitentiary for selling counterfeit computer equipment, Jason Peiffer, attorney and managing shareholder of PWCK, said in a statement. “They were never told that FIP is a small private company operated by a handful of individuals and is not associated with or backed by any financial institution or other reputable entity. Investors were not told that the FIP cash flows are completely illiquid and that U.S. federal law prohibits the assignment of federal pensions.”

In a wave of lawsuits Thursday, PWCK filed complaints against financial agents and firms in California, Arizona, Pennsylvania, New Jersey, Texas, Illinois, Utah and Florida.

A similar complaint was filed earlier this year against Ohio insurance agent Jeffrey A. Pickett, who attorneys say dubbed himself a “retirement and financial specialist.”

“Several states have ruled the FIP pension purchases to be illegal loans at up to 200 percent interest. Because of mounting regulatory pressure and multiple cease and desist orders, FIP stopped collecting payments from pensioners or making payments to investors on or about April 2018,” PWCK noted in its statement.

Attorneys say supposed scheme ringleader, Kohn, is on the lam.

What to Do if You Think You Were a Victim of Investment Fraud or Broker Misconduct

If you believe you were a victim of investment fraud or broker misconduct, it is imperative to take action. Peiffer Wolf Carr & Kane has represented thousands of victims, and we remain committed to fighting on behalf of investors.

Contact Peiffer Rosca Wolf today by filling out a Contact Form on our website or by calling 585-310-5410 to schedule a FREE Case Evaluation.

About Peiffer Wolf  Carr & Kane, APLC

Peiffer Wolf Carr & Kane is a nationwide litigation law firm that represents individuals and entities that have been the victims of negligence, fraud or the misconduct of powerful interests.  We are smart, experienced, and dedicated professionals who work tirelessly for our clients and take pride in the pursuit of justice on their behalf.  Too often the powerful interests in our society run over the rights of ordinary people. We do our best to restore that balance.