PHOENIX – A South Carolina attorney, Candy Kern-Fuller and her law firm, Upstate Law Group, have been ordered by the Arizona Corporation Commission to pay restitution of $2,943,438 and administrative penalties of $480,000 in connection with a veterans’ income stream scam marketed to Arizona investors.
The Corporation Commission also ordered Arkansas resident Michelle Plant, Performance Arbitrage Company, Inc. of Mississippi, California resident Mark Corbett and Texas resident Michael David Woodard and his company, Financial Product Distributors, LLC, to pay restitution of $371,191 and administrative penalties of $21,000 each in connection with the same scam. The Commission found the scammers and entities either made, participated in or induced the sale of unregistered income stream investments, which were based on the monthly payments veterans receive for their pension or disability benefits.
According to the Corporation Commission, Kern-Fuller and her fellow scammers failed to disclose to investors the risk that federal law may prohibit the sale of veterans’ pension and disability payments. The Corporation Commission found that Kern-Fuller and Upstate Law Group, LLC continued to be involved in unlawful sales of these securities after multiple cease and desist orders from other states found similar investments had violated securities laws in those jurisdictions.
The Commission found that the subjects failed to disclose these cease and desist orders to Arizona investors.
The Corporation Commission found that the unethical conduct of Kern-Fuller and Upstate Law Group rendered illusory their advertised role as the investors’ independent counsel, deceiving investors into a false sense of the investment’s safety.