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.
Jessica Claeys is an editor, writer, and graphic designer, who has been creating both print and digital marketing and communications content for 10+ years.
Jessa Claeys is a licensed insurance producer in the state of Colorado and an insurance editor for Bankrate. She currently covers auto, home and life insurance with the goal of helping others secure a healthy financial future. Jessa has over a decade of experience writing, editing and leading teams of content creators. Her work has been published by several insurance, personal finance and investment-focused publications, including BiggerPockets, 401(k) Specialist, BP Wealth and more.
