A man accused of misleading veterans to turn over much of their military retirement or disability benefits has been ordered to stop engaging in the illegal scheme of pension poaching.
But he’ll only have to pay a $1 fine and cooperate in an ongoing investigation.
Despite finding that Mark Corbett’s acts were deceptive and unfair and likely caused “substantial injury” to veterans, the Consumer Financial Protection Bureau handed Corbett a monetary penalty of just $1, according to Monday’s consent order.
In announcing the settlement with Corbett on Wednesday, the bureau said the $1 fine accounts for Corbett’s inability to pay more based on sworn financial statements that he provided to the bureau and his ongoing cooperation with the agency’s investigation.
Corbett is also named in a separate federal lawsuit filed in 2017 by three veterans who claim Corbett and others illegally bilked veterans desperate for cash out of millions of dollars from their military pensions and benefits, according to court documents.
It wasn’t immediately clear how the bureau’s order would affect that case.
Corbett, according to the bureau’s consent order, brokered contracts for the so-called Doe Companies. He marketed to veterans online who searched the internet for loans to veterans or for pension sales. In turn, he sought investors interested in buying veterans’ income streams. Veterans would receive a payment ranging from a few thousand to tens of thousands of dollars; in exchange, they would repay a much larger amount by signing over to investors all or part of their monthly pension or disability payments, typically for five to 10 years.
Veterans often experienced funding delays and were not informed of the interest rates or the commission earned by Corbett.
The contracts required veterans to go into their Department of Veterans Affairs or Defense Finance and Accounting Service online portal and route their benefits directly into a bank account controlled by the investors. If the contract was only for a part of a pension, the companies would receive the veterans’ entire direct-deposit or monthly allotment and then remit a portion of it back to the veterans’ bank accounts.
Veterans were also required to purchase life insurance policies as collateral.
Federal law prohibits agreements under which another person acquires the right to receive a veteran’s pension payments, the bureau’s consent order notes.
It appears Corbett tried to skirt the law by telling veterans “that this is not a loan, you are selling a product for a set price,” according to the consent order.
That lines up with what Corbett told the American Association of Retired Persons in 2014: “We buy income streams. Everything we do is completely legal and legitimate. We’re completely transparent,” he was quoted in an AARP online article.
He said business was booming and he received 30 to 50 calls a day from people who want cash for their pensions.
“The first thing I do is try to talk them out of it,” Corbett was quoted in the AARP article. “It’s expensive money. I tell them: ‘Don’t sell your pension unless you have a really good plan for the money.’”
As part of the bureau’s settlement with Corbett, he must help the agency identify other veterans affected by his scheme.
In the case currently before a district court judge in South Carolina, the veterans maintain defendants extracted commissions as high as 40 percent of the sum received by veterans, without disclosing this to the investors or the veteran, according to court documents. A federal judge in April rejected a motion for dismissal.
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