Former lawyer from SC pleads guilty to bilking veterans, retirees in $31M fraud scheme
Stars and Stripes April 21, 2023
A South Carolina attorney who used her law firm to orchestrate a $31 million fraud scheme targeting veterans and the elderly faces up to five years in prison after pleading guilty this week to conspiracy.
Candy Kern, 55, carried out a nationwide scam from 2012 to 2021 that took advantage of cash-strapped veterans and clients who were seeking a secure retirement investment, the Justice Department said in a statement Wednesday, the same day as the plea agreement.
The scheme offered veterans cash in exchange for temporary rights to their pensions and disability payments, usually until their loans were repaid with interest.
Kern was the managing partner at the law firm and “served as the banker, legal counsel, and debt collector” in the scheme, which bilked victims out of $31.4 million, according to the DOJ.
Despite knowing that the contracts were illegal, Kern and her associates persuaded retirees to fork over the money lent to the veterans, saying the payments would eventually yield returns, the Justice Department statement said.
She filed lawsuits against those who defaulted, even though the contracts were void.
Over time, some veterans realized that the pension assignments were illegal and stopped paying, according to the statement.
This led to the collapse of the scheme after more than eight years. Kern and an undisclosed number of associates pocketed over $1.4 million, the DOJ said.
“This elaborate scheme preyed upon and exploited some of our most vulnerable populations, and when it collapsed, it left thousands of veterans in financial ruin and scores of retiree-investors without adequate resources to retire,” Brian Boynton, head of the Justice Department’s civil division, was quoted in the statement as saying.
Kern surrendered her law license in 2021. As part of her plea deal, she agreed to help prosecutors in their ongoing investigation.
“It is reprehensible that a former member of the South Carolina state bar would participate in such a scheme and use her standing as a lawyer to give victims a false confidence,” Adair Boroughs, the U.S. attorney for the District of South Carolina, said in the statement.
The date of Kern’s sentencing was not provided in the statement. Besides prison time, she also faces a $250,000 fine.
The National Elder Fraud Hotline is available to anyone 60 or older who has experienced financial fraud at 1-833-372-8311. The hotline is open Monday through Friday from 10 a.m. E.S.T to 6 p.m E.S.T.