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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Structured Cash Flow (SCF) investments involve the beneficiary of a fixed income stream- such as a retiree with a pension-selling his or her rights to the income stream at a discount, in exchange for a lump-sum payment. Investors pay a lump sum in exchange for the right to collect payments that are due to the seller of the income till the end of an agreed time. The financial gain (and risk) for the investor is when the seller lives a long life that keeps the payments coming in. The seller gets immediate cash. It is a legitimate investment except with veteran pensions! Then it violates federal law. Candy Kern, a managing director of a law firm, knew that, but it didn’t stop her from stealing $14 million from veterans. What would stop a fraudster? Certainly not their value system.

Starting in 2012 through 2020, Kern served as the banker, legal counsel, and debt collector for the fraudulent SCF operation. Kern solicited veterans, who tended to be in dire straits, and offered an up-front lump sum payment in exchange for their monthly veteran pension. Throughout the duration of the scheme, and unbeknownst to the veterans, the pension assignment contracts were in fact void, as it is illegal to sell a government pension. Over time, the scheme collapsed, as many veterans either were unable to repay their “obligations” under the contract or opted not to do so upon learning that federal law prohibited pension assignments.

Notwithstanding the invalidity of the fraudulent SCF contracts that Kern managed, Kern pursued enforcement actions against veterans who defaulted, securing numerous default judgments against veterans in absentia. Meaning, the veterans weren’t there to argue their case!  There was too much evidence for Kern to argue at her court case. On April 20, 2023, she pled guilty to veteran fraud.

Great job by the FBI in this investigation.

Today’s Fraud Of The Day is based on article “Upstate woman pleads guilty to fraud conspiracy targeting retirees, military pension holders” published by 7 News on April 20, 2023

An Anderson woman pled guilty to conspiracy for her role in a nationwide scheme that exploited veterans and elderly investors.55-year-old Candy Kern was a managing partner of a law firm based in South Carolina from about 2012 until 2021.

Investigators said Kern used her law firm to facilitate a fraudulent scheme involving an illegal assignment of veterans’ benefits. Kern served as a banker, legal counsel and debt collector for a group of numerous individuals and small businesses referred to as Structured Cash Flow (SCF).

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