Kari Bracy (CRD#: 5656186), a former registered representative with NYLife Securities in Jacksonville Beach, Florida, has been barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) after she refused to provide requested information to FINRA as they were investigating her for selling Future Income Payments, according to her BrokerCheck record accessed on January 31, 2020.
Kari Bracy is alleged to have sold Future Income Payments while working as a broker. Why is this problematic? Future Income Payments has been accused of being a Ponzi scheme. According to a press release issued by the U.S. Attorney’s Office for the District of South Carolina on March 27, 2019, Future Income Payments, LLC and Scott Kohn were indicted for conspiracy to engage in mail and wire fraud. Scott Kohn recruited retirees as part of his alleged scheme.
How did the alleged Future Income Payments work? Retirees made monthly payments to Future Income Payments in exchange for a lump sum payment or loan. But the adjusted annual percentage rate (APR) often exceeded 100%, and Future Income Payments allegedly concealed that they were engaging in usury (lending money at unreasonable high interest rates). Future Income Payments allegedly enticed investors to purchase “structured cash flows” (the retirees’ monthly pension payments) and guaranteed a return of 6.5% to 8%. To keep the scheme going, Future Income Payments allegedly used payments from new investors to pay earlier investors—one of the hallmarks of a Ponzi scheme. Future Income Payments ultimately ceased operations in 2018, but not before they allegedly bilked $300 million from 2,600 investors, many of whom were military veterans. If convicted, Scott Kohn could face up to 20 years in prison and a fine of $250,000. On May 12, 2019, the United States District Court for the District of South Carolina issued a federal arrest warrant for Scott Kohn. He was eventually apprehended by the FBI.
What happened to lead to Kari Bracy’s bar from the securities industry? Kari Bracy was one of the brokers who allegedly sold investments in Future Income Payments. On July 31, 2018, a client filed a complaint against Kari Bracy, alleging that she misrepresented an investment in Future Income Payments. The client alleges that Kari Bracy told her that Future Income Payments was a conservative investment with a 7.5% return over 10 years. The client originally sought $142,697.27 in damages; the matter was settled for $80,000. Ultimately, when FINRA launched an investigation into her sales of Future Income Payments, Kari Bracy refused to provide FINRA with requested information. As a result, FINRA barred her from the securities industry. A copy of Kari Bracy’s AWC can be viewed here.
If Kari Bracy was your broker and you have questions about your investments, don’t hesitate to contact the securities attorneys of Fitapelli Kurta to learn about your options for recovery. Call (877) 238-4175 or email firstname.lastname@example.org for your free case consultation.