(Operation Protect Veterans is exposing schemes like these 5 that are aimed at ex-military members)
- Pension Predators. Billie Jo Slater of Mounds View, MN, borrowed against her late husband’s military pension to pay for her dog’s emergency surgery, but the $2,100 loan turned into a $21,000 debt. Shady companies are giving money to vets upfront in exchange for monthly payments transferred from pension accounts that add up to many times the amount borrowed. In August, Minnesota Attorney General Lori Swanson filed a lawsuit against two companies she said exploited veterans. “People should be very cautious about giving away their future pension benefits to get just pennies on the dollar,” she said.
- Phone Scams. In May, Veterans Affairs issued a warning: Watch out for “mimic phone line” scams. The alert was triggered by reports that scam artists had set up a phone line with a number that was very similar to a real veterans hotline number. (The number for that program, Veterans Choice, starts with 866; scammers were using an 800 area code.) When a vet accidentally calls, he or she is talked into disclosing credit card information with the promise of $100 rebate. “VA would never ask veterans for this information,” a spokesman said.
- Investment Fraud. Federal regulators have warned that some former service members are using their military ties to lure vets into risky or downright illegal investments. For example, in January 2017 former Marine Clayton Cohn, now 31, was sentenced to 52 months in prison for defrauding investors—many of whom had served with him in Iraq. According to the case brought by the U.S. Securities and Exchange Commission, Cohn raised almost $2 million from investors by lying about previous successes as a stock trader. He then spent hundreds of thousands of dollars on things like a Hollywood mansion and a luxury automobile.
- Predatory Lending. Veterans with home mortgages backed by the VA are being targeted by companies that aggressively call and send letters to coerce them to refinance. After receiving many complaints, the Governmen National Mortgage Association, known as Ginnie Mae, investigated and found the loans were not to help veterans but to generate fees, and some veterans ended up with a higher mortgage, said Michael Bright, Ginnie Mae’s acting president.
5. Benefits Scams. In October, Elizabeth Honig, 52, of Morganville, NJ, was sentenced to two years in prison for stealing from a VA program that was set up to help older vets train for new jobs. She signed up nearly 200 veterans, but few got any real training. Many were never eligible for the program, federal prosecutors said. She was ordered to repay $2.8 million.