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Many financially vulnerable veterans fell into a carefully conceived trap that lured them into redirecting part of their monthly benefits for a cash advance from investors, USA Today reported. This business of buying and selling military benefits spread to at least 33 states before unraveling. In the last two years, investigators cracked down on the companies. More judges ruled that their transactions violate states and federal laws. The fallout created two sets of victims: Veterans and the people who provided them money. Veterans fell deeper into debt, while investors saw their nest eggs vanish as the veterans stopped paying and the companies collapsed. The architects of these arrangements were the only ones who truly profited. Their bank accounts swelled, sometimes into seven figures. Their riches came from high commissions, sometimes up to 50 percent, hidden fees and exorbitant interest rates as high as 240 percent. The company Future Income Payments ballooned into what's been described as a billion-dollar enterprise. Investors lost $451 million when that business burst last year, according to records obtained by the FBI. Its founder, Scott Kohn, was indicted in Greenville, S.C., on a federal charge of conspiracy to commit wire fraud and mail fraud in connection with the buying and selling of military benefits. The charge carries a maximum 20-year prison sentence. Jury selection is set for February. A Government Accountability Office report issued in October said the U.S. Department of Veterans Affairs should do more to prevent the financial exploitation of veterans. One recommendation in the report: "Centrally collect and analyze information, such as complaints against companies, that could show the prevalence of these scams, help VA target outreach to veterans, and help law enforcement go after scammers."

A Kansas farmer has admitted to defrauding federal government crop insurance programs before lying in court documents when filing for bankruptcy, the Wichita Eagle reported. Trego County (Kansas) farmer Kevin W. Struss pleaded guilty Monday at a federal courthouse in Wichita to one count of federal crop insurance fraud and one count of bankruptcy fraud, court documents show. In the plea deal, prosecutors said they plan to ask the court for more than $2.1 million in restitution. That total includes more than $600,000 in insurance premium benefits, more than $1.2 million in federal crop insurance premium subsidies and more than $270,000 in administrative costs. Struss admitted in the plea agreement that in the spring of 2015 he devised a scheme to defraud the Federal Crop Insurance Corporation. The plan involved making false proof-of-loss statements that under-reported his total harvested bushels of corn and grain sorghum, which is also known as milo. Those crops had been insured with an FCIC subsidy. As a result of the scheme, he was paid crop insurance benefits to which he was not entitled. Then in April 2018, Struss filed for bankruptcy. He marked that he had not transferred property to anyone in the previous two years, but in fact, Struss admitted in his guilty plea that he had transferred $470,000 to someone else within the three months before he filed for bankruptcy.

Liquidator Grant Thornton is seeking litigation funding to step up its hunt for 500 million pounds ($632.30 million) invested in U.K. company Euro Forex, which Chinese police have said was a pyramid scheme, Reuters reported. Reuters reported in 2016 how Euro Forex, or EuroFX, allegedly scammed thousands of investors in China and other countries. EuroFX had a British CEO and headquarters and has since been wound up. Grant Thornton was appointed liquidator in July 2017, and is representing nearly 3,000 investors. It has not yet managed to find any of the missing EuroFX money, it said in a progress report filed with the U.K. companies registrar last month. “We are in discussions with a litigation funder,” said David Ingram, without naming the company or saying how much funding he was looking to raise. He said he hoped to secure the funding in 6-12 months. Grant Thornton is representing 2,939 claimants with a total investment of 475 million pounds, the filing showed. Ingram said it was not possible to say how many people invested in EuroFX overall.

A New York judge granted Billy McFarland's request to withdraw his attorney from bankruptcy proceedings on Thursday, meaning the Fyre Fest founder will represent himself moving forward, Billboard reported. In a handwritten letter to Bankruptcy Judge Martin Glenn dated Oct. 1, McFarland asked for permission to remove his attorney, Tallen Todorovich, and his firm, the Law Office of Tallen PC, from the failed festival's chapter 7 bankruptcy case. McFarland is currently serving a six-year prison sentence in connection with Fyre at the Federal Correctional Institution, Otisville, and because of this he noted he "cannot afford to pay Todorovich." Trustee Greg Messer is overseeing the Fyre Fest bankruptcy and has filed more than a dozen lawsuits in connection with about $16 million fraudulently raised and spent by McFarland. Subjects of those lawsuits include American Express, modeling agency DNA and four talent agencies, among others. Based on McFarland's letter to Judge Glenn and the judge's order approving his attorney's removal, McFarland seems likely to accept whatever amount the trustee determines the creditors lost. He will be responsible for that amount, minus what monies the trustee can claw back from those who profited off the festival.

A Pasadena, Calif., man who falsely claimed to be a licensed attorney was sentenced today to 50 months in federal prison for his conviction on charges related to his representation of “clients” in federal and state courts, according to a DOJ press release. Kenneth Paul Ferreyro also sought well over $100,000 in refunds on federal tax returns that falsely claimed substantial payroll taxes had been withheld and remitted to the IRS. U.S. District Judge John F. Walter imposed the sentence, calling Ferreyro’s criminal conduct “absolutely despicable.” In addition to the prison term, Judge Walter ordered Ferreyro to pay $190,887 in restitution to the IRS. Following a four-day trial in April, a federal jury convicted Ferreyro of four counts of wire fraud and four counts of making false claims on his tax returns. Judge Walter remanded Ferreyro into custody after the guilty verdicts were read. The evidence presented at trial showed that, from at least 2010 until 2017, Ferreyro told people, most of whom were affiliated with his father’s church, that he could represent them in bankruptcy court and other courts, and that he could perform work related to real estate refinancing and tax liens. While Ferreyro graduated from law school, he never received a license to practice law.

N.F.L. star quarterback Drew Brees called it a “rewarding” opportunity, a chance to market health products trusted by thousands of people. Former President George W. Bush spoke at a sales conference in Texas designed to tout its “economic value.” But there was more to the nutritional supplement provider and multilevel marketing business operated by AdvoCare International. AdvoCare yesterday agreed to pay $150 million to settle charges by the Federal Trade Commission that it operated an illegal pyramid scheme that deceived customers into thinking they could earn significant income as distributors of its products, the New York Times reported. In addition to the financial settlement, the Texas-based company will be banned from the multilevel marketing business. For years, AdvoCare recruited hundreds of thousands of consumers across the country to market its health products, promising “the average person a financial solution that will enable them to earn unlimited income,” the F.T.C. wrote in a complaint filed yesterday in federal court in Texas.

A long-time con artist was sentenced today to 240 months in federal prison for running a multimillion-dollar real estate scam that conned elderly people out of their homes, gouging them with fraudulent threats of litigation and extorting monthly payments for illegal foreclosure and eviction delay, according to a press release from the U.S. Attorney's Office for the Central District of California. Michael “Mickey” Henschel of Van Nuys, Calif., was sentenced by U.S. District Judge Virginia A. Phillips. A restitution hearing in this matter has been scheduled for December 2. Henschel pleaded guilty on May 13 to one count of mail fraud after spending years filing fraudulent documents on homeowners’ properties, and then using the fraudulent filings and fraudulent litigation to steal money from victims, sometimes stealing homes outright, and other times extorting settlement payments in actual or threatened civil litigation.

Billionaire Ron Burkle gets to move forward in his lawsuit alleging being defrauded in the $289 million sale of The Weinstein Co. assets, according to the Hollywood Reporter. On Thursday, a Los Angeles Superior Court judge rejected a bid to nix fraud claims brought by Burkle's Yucaipa Companies. Back in July 2018, Yucaipa sued Lantern Entertainment (later becoming Spyglass Media) upon completion of the $289 million deal. Burkle once attempted to buy TWC's assets outside of bankruptcy, but certain events intervened. According to the complaint, Yucaipa had taken the lead in assembling a deal that would save TWC from bankruptcy and ensure compensation for Harvey Weinstein's victims and creditors. Instead, ongoing investigations and a suit from New York's attorney general made his buyout nearly impossible. Once TWC filed for chapter 11 in Delaware, a bankruptcy court supervised the sale of film and television assets. Lantern emerged the winner of bidding. But after Lantern was crowned the victor, Burkle's Yucaipa stepped forward to allege it was cheated. Specifically, Yucaipa asserts that behind the scenes, it provided confidential information to Lantern, which at that point had no experience in the entertainment industry.