Be Wary of Veterans Benefits Scams
Many men and women have fought for our country. Once they leave the military, they face another fight—earning enough money to survive. Desperate times call for desperate measures, which leads some veterans to trade benefits they will receive at some point in the future and receive compensation for them now. These schemes, which are illegal, have made some people millionaires. The veterans, however, face high rates and fees.
These schemes worked, even though they violate state and federal laws. These veterans benefits scams have been going on in 33 states. A yearlong investigation into these schemes shows that they have been in existence since even before the internet. However, these cases are just now starting to get recognition. More and more cases are heading to court. One man faces 20 years in jail for his role. Four people face federal charges of conspiracy to commit wire fraud and mail fraud. This is the first time anyone has faced criminal charges relating to this type of scheme.
Veterans fall for these schemes to buy and sell military benefits because they need money and are willing to sacrifice future benefits. Veterans fell even deeper into debt. Interest rates reached a whopping 240%. This left veterans unable to make their payments, and many defaulted on their agreements. As a result, investors lost their retirement money and other savings. Investors lost more than $450 million.
More than 300 brokers were involved in these scams. They used a phone and a computer to connect investors with veterans. Salespeople convinced the veterans that they would receive quick cash and that everyone involved in the transactions would win. In the end, though, the brokers were the only ones who made money.
How Did This Scam Work?
Financially struggling veterans often found this scam online. Brokers would follow up on leads and send veterans forms to fill out. The veterans had to agree to pay any existing debts with their cash advances. Many veterans had to buy life insurance policies in case they died before repaying their cash advances. Investors would buy the veterans’ benefits and those involved would sign contracts.
The investors wired a lump sum to the business. Veterans would receive the amount left over once commissions, debts and other costs were deducted.
The veterans were required to repay the cash advances. If they stopped paying, they could face lawsuits.
To get investors, brokers hosted seminars at restaurants. They promised this scheme as a way to grow retirement savings. They would invest money to be used as cash advances to the veterans. The veterans repaid these amounts on a monthly basis. These repayments went to investors, who used them for life insurance premiums. If veterans did not make payments, the investors stopped making money.
Contact Us for More Information About VA Benefits
After leaving the military, you may be desperate for money. Don’t fall for schemes by investors. Instead, contact Veterans Affairs to understand the benefits you are entitled to receive.