Attorney General Mark Herring announced Thursday that he won $50 million in debt relief and ordered civil penalties in a lawsuit against Future Income Payments, LLC; FIP, LLC; and their owner, Scott Kohn.
The lawsuit accused Kohn of making illegal-high interest loans to more than 1,000 Virginia veterans and retirees, violating the Virginia Consumer Protection Act. The court also found that the agreements FIP made carried illegally high interest rates, and forced FIP to shut down its lending operations countrywide.
In March, a disabled military veteran took out a pension loan for $5,500, but was required to pay back more than $40,000, according to Herring’s lawsuit.
Herring accused the companies of giving out illegal loans that carried interest rates as high as 183 percent to at least 650 people in Virginia. The suit claimed that FIP disguised its illegal, high interest loans as “pension sales” that could provide Virginia pension holders with a quick lump sum of cash.
Judge Bonnie L. Jones awarded the following:
- $20,098,159.63 in debt forgiveness for borrowers;
- $31,740,000.00 as a civil penalty;
- $414,473.72 in restitution;
- $198,000.00 for costs and attorneys’ fees;
- Injunctive relief preventing FIP and Scott Kohn from further violating the VCPA;
- A declaration that FIP’s agreements with Virginia consumers are usurious and illegal.