A federal lawsuit filed in Greenville accuses an Upstate attorney and two Arkansas businessmen of bilking veterans out of their military pensions and benefits.

The lawsuit was filed Friday on behalf of Chad Wright, an Army veteran from South Carolina, Marine veteran Jason Lyons of New Jersey and Army veteran Adrian Russo of Maryland.

The suit alleges that Upstate attorney Candy Kern-Fuller and Arkansas businessmen Andrew Gamber and Mark Corbett and their related companies illegally induced veterans to sell their retirement benefits or disability benefits for a period of months or years in exchange for lump-sum payments.

"The behavior alleged in the complaint is reprehensible," said Anne Richardson, an attorney with Public Counsel, which is representing Wright, Lyons and Russo for free. "The victims are veterans who served their country and were injured in the line of duty. Instead of offering them fair business terms, we allege that the defendants looked to bilk them out of their disability benefits through illegal high interest loans."

According to the suit, Kern-Fuller's law firm in Easley "has acted as the central bank for the scheme."

Kern-Fuller said in an email that that the lawsuit "contains many false accusations about me and our firm."

Kern-Fuller is one of the attorneys for former Anderson County Administrator Joey Preston. Preston is embroiled in a long-running legal battle with county officials involving a $1.1 million severance package he received in 2008.

Attempts to reach Gamber and Corbett were unsuccessful Tuesday.

According to the suit, federal law specifically prohibits any agreements involving the purchase of military benefits or pensions. Nonetheless, the suit states, the defendants maintain a network of websites "designed to attract financially desperate veterans seeking a source of ready cash."

Regulatory agencies in eight states have tried to stop this illegal activity with only limited success, according to the suit.

The federal Securities and Exchange Commission announced in March that it was investigating Kern-Fuller's legal firm, Upstate Law Group, and two other companies named in lawsuit. The investigation deals with potential violations of federal securities laws relating to the unregistered offer and sale of investments in pension income streams, according to the SEC.

Veterans' stories

According to the lawsuit, Wright grew up in a military family and he served in the Army from 1989 to 1994. He injured his spine during a parachute training jump on a rainy night.

"Even though Mr. Wright and his wife worked several jobs, they and their four young daughters were facing homelessness in 2013," the suit states. "Mr. Wright had been homeless before and could not let his family experience that trauma."

Wright approached one of the companies named in the suit, BAIC Inc., the suit states. After he entered into a contract in early 2014, the suit states, the defendants used most of the funds from the assignment of his benefits to pay his existing creditors. As a result, he received only $8,000, the suit alleges.

According to the suit, up to half of the money paid by the purchaser of Wright's pension money was taken by the defendants without his knowledge.

"I feel like I was in a vulnerable spot, and they took advantage of me," Wright said in a statement issued by Public Counsel.

Lyons joined the Marines in 1992 and served until he was honorably discharged in 2002 as a result of injuries sustained during his service, according to the suit. He is now a recruiter for the Office of Naval Intelligence.

"Lyons encountered a series of economically challenging events in 2013," the suit states. "These included a divorce, with alimony and child-support obligations, college expenses for his eldest daughter, and medical expenses his family."

According to the suit, Lyons ended up paying an interest rate of 42.85 percent after signing an agreement with BAIC.

Russo was injured several times while serving in the Army, including when his parachute collapsed and when he fell through a roof while serving in Iraq, according to the suit.

The medically retired combat veteran, who now owns a small business, needed a loan to transition to civilian life, the suit states. He signed a contract with BAIC, but up to half of the money paid by an investor never reached Russo, who wound up paying an interest rate of 31.05 percent, according to the suit.

The three veterans named in the lawsuit "are just the tip of the iceberg," said Adelaide Anderson, a staff attorney with Public Counsel.

"We have reason to believe there are hundreds, perhaps thousands of veterans, who have been fleeced by the defendants over the past six-plus years," she said. "This lawsuit is an attempt to protect our nation's veterans from this alleged nationwide racket."

Follow Kirk Brown on Twitter @KirkBrown_AIM