Upstate Law Group's Participation in Pension Assignment Operation Exposed by Newspaper

The Charleston (South Carolina) Review and Courier has posted an investigative piece describing the relationship of a South Carolina Law Firm, the Upstate Law Group, in a pension assignment operation.  The article is available online here.

The names of the companies selling the pension assignments changed over the years, but the participation of Upstate Law Group remained constant.  Why this case has not been referred to the United States attorney for criminal RICO action is beyond me.

Here's the beginning part of the article.  To read the whole thing, you will have to go to the Review and Courier site:

For nearly seven years, a small South Carolina law firm helped operate a nationwide scheme that preyed on desperate military veterans, misled investors and netted millions of dollars in allegedly illegal profits.
The Upstate Law Group, with its office in Pickens County, worked with a network of salesmen to lure in cash-strapped veterans and convince them to sign over their monthly pensions and disability payments.
The businesses then persuaded retirees to invest in the federal benefit payments, promising up to an 8 percent return on their money.

The veterans received a lump-sum payout for handing over several years of future income to the investors. The upfront cash came at a steep cost.
The problem is the entire arrangement is illegal, according to state and federal authorities. Federal law prohibits veterans from assigning their pension or disability payments to another person.
That didn’t stop Candy Kern-Fuller, owner of the Upstate Law Group. Since 2012, she helped her associates sell the military benefit contracts across the country.
The name at the top of the paperwork changed over the years: Voyager Financial Group, SoBell Corp., BAIC Inc., Performance Arbitrage Company and Life Funding Options.
But the system continued.
Using websites, the string of companies persuaded veterans from states as far flung as Florida, Idaho, Texas, Alaska and Michigan to sign over their benefits. And they peddled those supposedly “secured” payments to retirees in places like Nevada, New York, Arizona, Tennessee and California.
The scope of the operation is staggering. Records obtained by state regulators show the companies lured in hundreds of veterans and pocketed millions of dollars in fees, which they siphoned off the top of each deal.
The Upstate Law Group effectively served as the banker, legal counsel and debt collector for the operation — offering an air of legitimacy to the scheme.

About 5 years ago, I sued Upstate Law Group on behalf of a client who got involved with a Voyager Financial Group pension. I wrote about it at the time, and since then I have helped a number of people who were victimized by pension assignments without filing litigation.  In the early suit, Upstate Law Group's defense boiled down to an argument that their involvement in collecting the pension assignment was an isolated incident.  I didn't think that was true at the time, and it is clearly not true now.  We were able to get that case resolved to my client's satisfaction without digging into the details.

What I didn't know until I read this article today was that Upstate Law Group actually sued a number of the pensioners in Greenville County, South Carolina. In my opinion, this is a violation of the venue provisions of the Fair Debt Collection Practices Act.  The problem is, that when people stop paying on these obligations without a lawyer, they can be targeted, and they may not be able to find a South Carolina lawyer to get the case dismissed.

I urge anyone who is ceasing payments on a pension assignment contract to consult with a lawyer and have the lawyer write the letter stating that you are ceasing payments as a matter of right.  If you have a lawyer, your lawyer should know what to do if you are sued in the wrong forum.

Pension Assignment Problems Are Coming Back

Just when I thought the pension assignment industry was dead, they keep popping back up. The current problem seems to be collection effords driven by the "investors" who purchase the pension assignments.  I have beeen dealing with these cases since 2014.  Below is from a blog entry that I wrote initially in 2015. 

In my opinion, these contracts are illegal not just from the point of view of the seller, but also from the point of view of the buyer as well.  From the seller's point of view, they are disguised loans without required disclosure. From the buyers' point of view, they are illegal securities.  The basic rule of securities law is that, unless an exemption applies, the security must be registered and the seller must be licensed to sell the security.  In most of these cases, the security is not registered and the seller is not licensed to sell the security. 

Many times these pension securities are sold to unsuspecting buyers by their trusted life insurance agents.  These life insurance agents may have a bond and professional liability insurance. This is important because the companies putting these securities together may be practically insolvent or their assets may be out of reach of a reasonable-cost lawsuit.  The sellers' only recourse may be to bring a claim against the life insurance agent or other person who sold them the security. 

Note this applies not just to pension securities but other investments that might be sold by brokers and agents.  I have seen cases involving illegal church bonds, for example. 

If you bought a pension investment that is not performing, or were sold some other type of worthless security from a life insurance agent, including church bonds or unregistered corporate bonds, please call my office at 317-662-4529.

Of course, we still represent consumers who have sold part of their pensions. Here are some of the companies that are involved in the industry

Voyager Financial Group, LLC (also doing business as Pension4Case, Cash out my Pension, Buy Your Pension)
Veterans Benefit League
Cash Flow Investment Partners
LumpSum Pension Advance
Pension Funding, LLC
Pensions Annuities & Settlements LLC
Pension Income LLC
DFR Pension Funding
Veterans Benefit Leverage
First American Finance Corporation
Investing Forward (Termbrokers LLC)

More on Pension Factoring - Pension Assignments

We just did our third case in support of pensioners who got involved in pension assignment contracts.  In my opinion, these contracts are illegal not just from the point of view of the seller, but also from the point of view of the buyer as well.  From the seller's point of view, they are disguised loans without required disclosure. From the buyers' point of view, they are illegal securities.  The basic rule of securities law is that, unless an exemption applies, the security must be registered and the seller must be licensed to sell the security.  In most of these cases, the security is not registered and the seller is not licensed to sell the security.

Many times these pension securities are sold to unsuspecting buyers by their trusted life insurance agents.  These life insurance agents may have a bond and professional liability insurance. This is important because the companies putting these securities together may be practically insolvent or their assets may be out of reach of a reasonable-cost lawsuit.  The sellers' only recourse may be to bring a claim against the life insurance agent or other person who sold them the security.

Note this applies not just to pension securities but other investments that might be sold by brokers and agents.  I have seen cases involving illegal church bonds, for example.

If you bought a pension investment that is not performing, or were sold some other type of worthless security from a life insurance agent, including church bonds or unregistered corporate bonds, please call my office at 317-662-4529.

Of course, we still represent consumers who have sold part of their pensions. Here are some of the companies that are involved in the industry

Voyager Financial Group, LLC (also doing business as Pension4Case, Cash out my Pension, Buy Your Pension)
Veterans Benefit League
Cash Flow Investment Partners
LumpSum Pension Advance
Pension Funding, LLC
Pensions Annuities & Settlements LLC
Pension Income LLC
DFR Pension Funding
Veterans Benefit Leverage
First American Finance Corporation
Investing Forward (Termbrokers LLC)

More on Voyager Financial Group (VFG) and Assignment of Military Pensions

Since I initially posted about Voyager Financial Group. I've received multiple calls from people who assigned military pensions.  It is illegal for enlisted military members to assign pensions under 37 U.S.C. 701.  (Commissioned officers may assign pensions up to certain limits.) 38 U.S.C. 5301 contains limits on assignability of V.A. pensions.

It appears that there are class action law firms that are after the pension factoring companies making allegations that when the factoring firm sells (or places) the pension assignment with an investor, that is an unlicensed/unregistered security.  That's great but it doesn't help the individual retiree who's income has been cut drastically by the pension assignment and doesn't have enough money left to pay his/her bills.  I've been evaluating these cases based upon the legality of the underlying agreement as a matter of state law, and I make an individual determination about whether the pensioner can stop the assignment as a matter of right.  After the assignment has been stopped, I use the Fair Debt Collection Practices Act as a shield and a sword against collectors.   If you are outside of Indiana, contact me anyway through my website www.hoferlawindy.com, and I will try to link you up with a NACA consumer attorney.

Beware of Pension Factoring Ripoffs

I've been a lawyer for 27 years, more than half my live.  I've handled over 100,000 intakes in that time. Recently I was approached regarding a a type of transaction that I had never seen before. It involved pension factoring and a company called Voyager Financial Group, LLC.  Voyager approaches people who need money and have an income stream from a pension fund or something similar, and they offer their services as brokers to get the person cash up front for his or her pension scheme. the pensioner pledges the income from the pension as security for the advance. It seems obvious to me that this is a loan by any other name but so far Voyager and like companies have dodged scrutiny as lenders.  Voyager has run afoul of securities commissioners in several states because Voyager does not put up its own money, it recruits investors to buy the income streams. Because this is passive income for the investor, it is a security and should be registered.

The best mainstream journalistic article that I've seen on the subject is this one from the New York Times.

In the business world, factoring is common. The most common factoring is accounts receivable. Another type of factoring involves payment in advance for structured settlement payments.  The intermediaries in these transactions can potentially rip off both the investors and the person obtaining the lump sum, a/k/a the borrowers.  The implied interest rates in these deals are quite high. From what I've seen the rates exceed the 21% maximum legal rate for mainstream lenders in most states.  It's not such a great deal for the investor, either. The pensioner can actually cut off the stream of income. I think it's arguable whether these contracts are ever legal due to lack of disclosure on the consumer side and lack of registration of the various lenders and intermediaries.

If you have a problem with a pension factoring company, or of you sold pension payments, especially if you are getting collection letters relating to the pension assignment, I am interested in hearing from you. Call me at 317-662-4529. If you are not in my area (Indiana), I will try to link you up with a NACA attorney.