Mark Corbett spent eight years scamming U.S. veterans out of their pension benefits, preying on those who needed upfront cash and then hooking them up with a company that would take pension payments in return.
For nearly a decade of brokering this shady deal with veterans, Corbett was fined a whopping $1 by the Consumer Financial Protection Bureau — an agency meant to protect consumers from such schemes but under President Trump has become less stringent, to say the least.
According to The Intercept, Corbett received what has become known as the “Mulvaney discount”, a joke of a fine gifted to wrongdoers who claim financial hardship, named after the former acting director and current White House chief of staff, Mick Mulvaney.
Mulvaney has since been replaced by a confirmed director, his former aide Kathy Kraninger. The discount, however, has remained.
“It looks like the Trump-appointed political leadership at the CFPB is letting a person who preyed on veterans get away with a slap on the wrist,” said Will Corbett, a litigation counsel with the Center for Responsible Lending, a consumer advocacy group, in a statement.
What was Corbett accused of doing?
Since 2011, Mark Corbett served as an agent for companies that the CFPB declined to name, calling them the “Doe companies.” That almost certainly indicates a future enforcement action against those companies. But companies do not violate laws; people do. And while Mark Corbett was not required to admit or deny the facts or legal conclusions in the consent order, CFPB’s findings were detailed and substantial.
On websites he operated, Mark Corbett marketed a deal for veterans with retiree or disability pensions. He set them up with offers from the Doe companies to purchase some or all of those future pension payments in exchange for a lump sum. Veterans would then use an online portal to redirect pension payments to a bank account controlled by one of the Doe companies. If veterans only sold part of their pension, the Doe companies would reimburse a portion of the payment every month. This was virtually the only source of the Doe companies’ consumer-side business revenue.
It’s also completely illegal. Under federal law assigning veterans’ pensions to a third party is prohibited. In fact, several veterans complained to Mark Corbett that the transactions were illegal; according to those veterans, he denied it.
Because these deals were essentially loans, Corbett was required by law to disclose the interest rates to be applied, but he never did so and in written materials informed clients they were not taking out a loan, writing “this is not a loan. … [Y]ou are selling a product for a set price.”
According to bureau documents, the companies Corbett connected veterans with did not always deliver on the lump sum payments by the deadline promised, at times missing the mark by several months, the Intercept reported.
In a consent order, CFPB lays out this deception, accusing Mark Corbett of brokering illegal contracts with misleading terms, often without even delivering the promised funds to consumers in a timely fashion. It’s unclear how much money Corbett earned from this activity over an eight-year period, but it’s a virtual certainty that it was more than $1.
Nevertheless, the CFPB order reads: “Having an inability to pay based on sworn financial statements provided to the Bureau on November 8, 2018, Respondent must pay a civil money penalty of $1 to the Bureau.”
The Intercept noted that it is possible victims of the scheme could receive restitution with a future enforcement with the Doe companies.