CFPB, Arkansas order broker to pay $2.7M in pension scam
The Consumer Financial Protection Bureau and Arkansas attorney general have proposed a $2.7 million settlement with an Arkansas securities broker who allegedly induced veterans to hand over their federal benefits in violation of the law.
The CFPB and Arkansas AG Leslie Rutledge filed the complaint Wednesday against Andrew Gamber and three companies he operated. Gamber was previously barred from selling securities in Arkansas in 2014, and in Texas in 2016, and had allegedly scammed veterans of their pension benefits for years, according to court documents.
In the latest allegations, the CFPB and Arkansas said contracts between veterans and Gamber's companies were “void from inception.” The companies were marketed as providing consumers with a lump sum of cash in exchange for selling over their retirement benefits. The settlement would ban Gamber from continuing the practice.
Federal law dating back two centuries prohibits agreements under which another person can acquire the right to receive a veteran’s pension or disability payments. Many states also prohibit the assignment of pensions as a security on the payment of a debt and the sale of unpaid earnings.
Gamber operated the now-defunct Voyager Financial Group, BAIC Inc. and SoBell Corp. He and his companies allegedly misrepresented to consumers that they would receive funds by a specified date and failed to inform them of the applicable interest rate on the credit offer, according to the settlement.
Gamber could not be reached for comment.
The CFPB said the settlement would impose a judgment for redress of $2.7 million, a civil money penalty of $1 to the CFPB, and a payment of $75,000 to the Arkansas attorney general’s consumer education and enforcement fund.
However, Gamber provided documents to suggest that he doesn’t have assets to pay the judgment, so regulators said the payment would be suspended if Gamber paid $275,001, or one-tenth of the original penalty. The CFPB said harmed consumers may be eligible for additional relief from the bureau’s civil penalty fund.
State investigators in Arkansas said Gamber had illegally entered into contracts with veteran pensioners and beneficiaries between 2011 and 2012 that were valued at $34 million, according to a lawsuit filed by veterans in South Carolina in 2017.
In January, the CFPB permanently banned a Gamber associate, Mark Corbett, from brokering, offering or arranging agreements between veterans and third parties in which veterans sold their retirement or disability benefits. Corbett also was ordered to pay a civil money penalty of $1 because of insufficient funds.