LOS ANGELES – City Attorney Mike Feuer today announced that his office is suing an individual and multiple companies allegedly involved in a predatory lending scheme targeting vulnerable California pensioners, including senior citizens and disabled veterans.
"Predatory lending practices can exploit the very real financial struggles of California’s most vulnerable residents, including seniors and veterans," said City Attorney Feuer. "In this case, we’re fighting to put an end to the pension lending and investment scheme our complaint alleges."
Scott Kohn, the owner and manager of a complex web of companies, including Cash Flow Investment Partners, LLC, Future Income Payments, LLC, and London Square Specialty Services, LLC, allegedly marketed and issued predatory loans to individuals in need of money to pay for unexpected expenses, securing the loans with those individuals’ pensions. Among other things, Kohn allegedly charged interest rates as high as 96%, far above California’s 10% usury limit, and threatened borrowers (falsely) that defaulting on the loans could subject them to criminal liability.
According to the lawsuit, Kohn also subjects pensioners in default to illegal and harassing debt collection practices, such as repeated telephone calls starting as early as 5:30 a.m. In addition, the lawsuit alleges Kohn solicits California investors to invest in underlying pension loans, but fails to disclose material information and makes material misrepresentations. For example, the lawsuit alleges that Kohn affirmatively assures investors (falsely) that the pension loans comply with all applicable laws. As a result, investors unknowingly bear the risk of loss on loans which are legally challenged or deemed void.
City Attorney Feuer seeks, among other things, an injunction prohibiting Kohn from collecting on the predatory loans issued to California pensioners, as well as selling unlawful and fraudulent loans to California investors. In addition, City Attorney Feuer seeks restitution for pensioners, as well as civil penalties.
Assistant City Attorney Michael Bostrom, Deputy City Attorney Jennifer Lam, and Deputy City Attorney Steven Son are handling the litigation.