Mastermind behind $300million Ponzi scheme targeting thousands of veterans jailed for ten years

The mastermind behind a $300 million Ponzi scheme that targeted vulnerable military veterans has been jailed for ten years, according to the U.S. Attorney’s Office for the District of South Carolina.

Scott Kohn, 68, of Newport, California, was indicted in 2019 for the fraudulent scheme which he used to fund an opulent lifestyle from a $4.8million mansion boasting sweeping views of the Pacific Ocean.

The conman was charged with conspiracy to commit wire fraud and mail fraud alongside co-conspirators Kraig Aiken, David Kenneally and Joseph Hipp over his scheme to scam vets with loans secured against their pensions that had astronomical interest rates.

Judge Bruce Hendricks also ordered Kohn to forfeit $297million on top of the jail term and to be placed on supervised release for a period of three years one he gets out.

Between 2011 and 2018, when the scheme collapsed, his company provided cash advances to veterans and retirees that would then be repaid by their pensions, with $310million being deposited in five accounts controlled by Kohn and his associates.

Kohn banked at least a third of that whopping sum, The Greenville News reports. It is reported he also dropped enormous sums of money on flashy cars and artworks.

The financially vulnerable traders weren’t told the advances had interest rates that could top 240 per cent per year.

The upfront money came from investors who were promised up to eight per cent back on their investments. As many as 13,000 veterans were placed into the exploitative loans.

The difference between the interest rates the traders paid and the interest the investors received back allowed Kohn and three associates to make hundreds of millions of dollars.

Kohn ran a corporation called Future Income Payments LLC, according to prosecutors. At least 2,600 people had fallen for the scam and invested in the corporation.

Kohn ordered his employees to use late-night advertising and the Internet to reach people, and more than 90 South Carolinians were among those ensnared, according to The News’ Indebted series.

Kohn and his co-conspirators would then solicit pensioners in financial distress – mostly military vets – and offer them an upfront lump sum of money in exchange for an assignment of the rights to their monthly pensions and disability payments, according to a press release from the US Attorney’s Office.

According to The Greenville News, Kohn’s alleged victims included a Vietnam War veteran who needed cash for his wife’s cancer treatment, and a Minnesota widow who required finances for her beloved dog’s surgery.

Dan Meehan, a 51-year-old Navy Reserve veteran, received $2,906.83 in military disability benefits the first of every month and took an upfront loan from Kohn for $5,000.

He later called it the ‘biggest blunder in my life’ as he fell deeper into debt paying the up to 50 percent hidden fees and 240 per cent interest rates.

Meanwhile, Kohn lived in the lap of luxury, residing in an exclusive gated community south of Los Angeles, where his $4.8million mansion boasted sweeping views of the Pacific Ocean.

Kohn initially went on the run when he was indicted in March 2019, and the FBI made up a ‘Most Wanted’ poster for him.

Agents from the US Marshals captured him on a beach in San Diego in September that year.

The Ponzi scheme affected people in at least 25 states – from South Carolina to Minneota.

Read More: Zintego