Rikard & Protopapas Featured for Their Work Recovering Millions for Investment Fraud Victims

17 May, 2023
money

Hundreds of people around the country fell victim to an investment fraud scheme that used Indexed Universal Life “IUL” insurance policies combined with an unregistered security known as Future Income Payments “FIP,” and were sold as a way to have “tax-free retirement income for life.”

Unfortunately, the victims of this investment fraud lost their retirement savings, and the advisors and insurance agents made millions. Eventually, FIP collapsed and was found to be a Ponzi scheme.

FIP’s founder, Scott Kohn, bought pricey artwork, high-end cars and a $1.7 million mansion in Las Vegas. He also lived in a $4.8 million California home with panoramic views of the Pacific Ocean.

Kohn was eventually indicted by the U.S. Government in Greenville, South Carolina, on a federal charge of conspiracy to commit wire fraud and mail fraud in connection with the buying and selling of military benefits. He recently pleaded guilty to those charges and received a 10-year prison sentence.

Global Conspiracy, Nationwide Scheme Head to Courts in SC

The alleged conspiracy involving Kohn and his associates was a global one. He had employees in the Philippines, and his company also had offices in Nevada and Michigan.

Charges were filed in a Greenville courthouse partly because of the number of victims in the area, according to the U.S. Attorney’s Office.

Almost 100 South Carolinians lost money in this IUL and FIP scheme, and Robert Rikard and Jeremy Hodges of Rikard Protopapas LLC represented many of them here in South Carolina, and hundreds more around the country.

Scott Kohn was a convicted felon and advisors did nothing to investigate him before selling their clients his IUL scam

In 2006, Kohn pleaded guilty in California to three felonies for selling counterfeit computer equipment. He was sentenced to 15 months in federal prison.

“We wake up in the morning and fix a cup of coffee,” said Robert Rikard, a Columbia, South Carolina, attorney for hundreds of investors who say they are among Kohn’s victims. “He would wake up in the morning and start a company, and then begin defrauding retirees around the country.”

“He and others working with him, convinced hundreds of clients to invest their retirement savings into this FIP scam combined with IUL insurance policies as a way to achieve ‘tax free retirement,’” Rikard said. “Unfortunately, it was all too good to be true and promoted by negligent investment advisors and insurance agents pretending to be investment advisors.”

Black Harbor Company is One of Hundreds That Targeted Investors

Black Harbor with offices in Greenville and Seneca, and its insurance agents and other professionals were prolific promoters of what they called the IRA Reboot program. They would lead seminars around the Greenville area and promote the IRA Reboot scheme as a way to use IUL or indexed universal life insurance policies as a retirement planning structure that could give investors tax-free income.

They promised an individually tailored retirement plan from Black Harbor Wealth Management, and promoted Black Harbor’s IRA Reboot program or R.A.N.T. program.

Rikard & Protopapas has filed lawsuits against Black Harbor and its agents for over 60 people in South Carolina. Rikard & Protopapas have also pursued claims against Pacific Life Insurance Company for their role in the IUL scheme sold by Black Harbor and its agents.

The lawsuits seek to recover money for clients who suffered “devastating” losses of their retirement savings.

Many of these clients said they didn’t know the second investment was a cash advance to veterans through Future Income Payments, according to allegations in lawsuits.

The investors could not afford the life insurance premiums after the company failed and stopped collecting from veterans. When they defaulted on the premiums, investors lost most or all of their money. Many didn’t even know that these were simply life insurance products because of the way that Black Harbor agents promoted the structure.

Robert Rikard, the attorney representing Black Harbor’s clients, said the insurance agents and financial advisers working with Future Income Payments didn’t do their homework.

“It’s unbelievable that these financial advisors and insurance agents in the middle, who are fairly sophisticated and fairly smart people, did not do 10 minutes of due diligence on the product they were selling — and they would have known that this was a horrible idea,” Rikard said.

Rikard & Protopapas has been representing investors in these cases since 2018 and has recovered over 50 million dollars for their clients who were harmed.

To read more about this investigation please visit the Greenville News article here.

Speak to Our Investment Fraud Lawyers 

Rikard & Protopapas has represented clients all over the state of South Carolina and the country in situations involving significant losses. Unfortunately, brokers and financial advisors do not always act in their clients’ best interests, so we’re here to provide guidance in these troubling times and fight for the compensation you and your loved ones deserve.

If you lost money as a result of a broker’s actions, please contact us immediately to speak with our legal professionals. It doesn’t cost anything to speak with someone on our team. Call us at 803-805-7546 or fill out a contact form on our website.

 

 

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