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JWE Investigating Brokers Who Sold Future Income Payments (FIP) in $300 Million Ponzi Scheme

In the wake of a federal grand jury's indictment of Future Income Payments and its owner Scott A. Kohn of Newport Coast, California for fraud over an alleged Ponzi scheme targeting pensioners and other retired and elderly investors, the Law Offices of Jonathan W. Evans & Associates is investigating brokers, financial advisers, and brokerage firms that sold Future Income Payments (FIP) in exchange for bloated commissions and fees.

Under the FIP scheme, investors were sold life insurance and indexed universal life insurance policies, regardless of whether these recommendations and investments were suitable with respect to the investor's risk tolerance preferences and investment objectives.

According to the indictment, pensioners made monthly payments to FIP for loans that often carried absurd interest rates, often in excess of 100%. The report states that representatives often misrepresented to consumers that these pension-advance products were not loans (and thus not subject to interest rates) when, in actuality, they were loans subject to exceedingly high interest rates.

The Pittsburgh Post-Gazette article, "Owing $60,000 for a $20,000 loan? That's what's happening to several veterans, elderly," specifies very clearly, in the title, what happens when interest rates grow out of control.

Most notable for investors seeking to recover losses, FIP allegedly operated through a network of investment advisers and insurance agents that would convince investors to purchase "structured cash flows" while promising returns up to 8%, falsely representing that FIP had established short- and long-term reserve accounts to mitigate the risk of default.

Instead, as regulators cracked own, FIP allegedly siphoned money from new investors in order to pay earlier investors to preserve the fraud, exemplifying a classic Ponzi scheme technique.

For instance, a 2018 Wall Street Journal article implicated Salt Lake City firm Live Abundant as one such entity that sold FIP. WSJ also noted that Live Abundant sold interests in the Woodbridge Group of Companies, another massive Ponzi scheme under investigation by JWE.

In September 2018, the Consumer Financial Protection Bureau filed suit against FIP of Irvine, California and Scott Kohn of Newport, CA, naming the following related entities as additional defendants in the US District Court for the Central District of California case: BuySellAnnuity Inc.; Cash Flow Investment Partners LLC; Pension Advance LLC; Cash Flow Investment Partners East, LLC; Cash Flow Investment Partners MidEast LLC; Lumpsum Pension Advance Atlantic LLC; Lumpsum Pension Advance Southeast LLC; Lumpsum Settlement West LLC; PAS California, LLC; PAS Great Lakes, LLC; PAS Northeast LLC; PAS Southwest LLC; Pension Advance Carolinas LLC; Pension Advance Midwest LLC; and Pension Loans South LLC.

If you have invested with a broker or financial adviser who sold structured cash flows through Future Income Payments (FIP), falsely representing that these pension-advance payments were not loans subject to interest rates and guaranteeing rates of return that never materialized to the detriment of your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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