Greg Wilson/Anderson Observer
The Supreme Court of South Carolina last week accepted local attorney Candy M. Kern’s motion to surrender her license to practice law in lieu of disciplinary actions. The revocation of the license to practice law in the state is permanent. Full Ruling Here
Last year Kern and another attorney in the Upstate Law Group firm, Howard Sutter III, were ordered to pay $725,000 to the Federal Consumer Financial Protection Bureau as part of a settlement in a case concerning the buying and selling of military veteran benefits.
The pair is accused of the misrepresentation of facts concerning financial transactions involving veterans who agreed to repay cash advances from disability benefits.
A second complaint was filed by an Arizona life insurance agent who sold to four of his clients military income stream investments that were processed by Kern.
The court’s ruling states:
“In the third complaint, a South Carolina lawyer represented three veterans who had assigned their military benefits in exchange for lump sum payments in connection with Respondent's scheme. Each of the veterans defaulted on the agreement to assign their benefits because they learned the assignments were illegal. After Respondent filed suit against each of the veterans in Greenville County, the veterans' lawyer filed a complaint with Disciplinary Counsel based on her belief the transactions were void from inception pursuant to federal law.”
The court ruling also noted Kern’s previous admonitions relating to this issue. In 2018, the Securities Division of the Arizona Corporation Commission (Corporation Commission) filed an enforcement action alleging the income stream investments were unregistered securities that were prohibited by federal and state law, naming Kern and her law firm as parties to the case. On November 12, 2020, the Corporation Commission issued an order finding Kern “made, participated in, and induced offers and sales of unregistered securities in violation of the Arizona Securities Act.”
The order further found Kern acted in a reckless and unethical manner and continued to be involved in unlawful sales of securities after multiple cease and desist orders from other states found similar investments violated securities laws in those jurisdictions. The Corporation Commission found the description of Kern's law firm's role in the investment scheme marketing materials gave confidence to investors that induced the unlawful sale of these securities and deceived the investors into a false sense of the investment's safety.
As a result, Kern was ordered to pay $2.9 million restitution, jointly and severally with other parties, plus $560,000 in penalties.
The Bureau of Consumer Financial Protection, the South Carolina Department of Consumer Affairs, and the State of Arkansas also filed a complaint in the United States District Court for the District of South Carolina against Kern, her former law partner, and their law firm alleging various violations of state and federal law in connection with the case.
Kern, who announced her retirement based on health issues, has until Aug. 19 to formerly surrender her license.
Kern, served as attorney for former Anderson County Administrator Joey Preston, who was given a $1.1 million severance buyout upon his resignation in 2008. After legal battles which cost the county more than $4 million, the S.C. Supreme Court overturned Preston's buyout in August.
Kern was also sued over her alleged profits in the case of ex-Anderson County Councilman Ron Wilson's fraudulent investments in silver scheme, which sent Wilson to prison. Investors, including family and friends of Wilson, lost almost $60 million after the Atlantic Bullion & Coin company folded in 2012. The lawsuit was settled in 2017, but the records are sealed. Wilson was recently released to a half-way house after serving nine years of his 20-year sentence.