Los Angeles City Attorney Mike Feuer announced a lawsuit Thursday against an individual and multiple companies he said are targeting pensioners with illegal, predatory loans.
Scott Kohn and some of his companies, including Cash Flow Investment Partners, LLC, Future Income Payments, LLC, and London Square Specialty Services, LLC, are the targets of the lawsuit. The companies have a nationwide reach, and Kohn lives in Nevada.
Feuer alleged that some of the pension loans Kohn issued had interest rates as high as 96 percent, far above the 10 percent allowed by California law.
“Predatory lending practices are especially pernicious, because they take advantage of people who are most vulnerable in our communities — people with low income, people down on their luck, people desperate for cash,” Feuer said at a news conference at City Hall while announcing the lawsuit.
Feuer is seeking an injunction prohibiting Kohn from collecting on the loans issued to California pensioners or selling loans to California investors. He also said he is seeking restitution for victims and civil penalties.
Feuer alleged that Kohn’s companies harassed borrowers with repeated phone calls and falsely threatened borrowers that defaulting on the loans could subject them to criminal charges.
One alleged victim, Ralph Santibaenz, said he initially took out a loan for $3,700 that ballooned into an $18,000 debt.
“I agreed to their terms and I signed the paperwork, but I didn’t really read that well what I was signing… afterwards I found out that it was a huge amount of money that they wanted back,” Santibaenz said.
Feuer indicted there could be hundreds of victims, including California investors in the underlying pension loans, as he said the companies failed to disclose material information and made material misrepresentations, including that Kohn falsely assures investors that the pension loans comply with all applicable laws.
Kohn could not be reached for comment.
In October, the state of New York ordered Kohn and Future Income Payments to shut down operations in the state and pay back any interest charged, plus a $500,000 penalty for operating illegally in the state, according to Forbes.
— City News Service