Complete Business Solutions Group, Inc., known as Par Funding, pleaded guilty on March 9 to conspiracy to commit wire fraud and securities fraud in a case involving the defrauding of investors out of hundreds of millions of dollars. The plea was entered before United States District Court Judge Mark A. Kearney by a court-appointed receiver, as Par Funding is currently under receivership following a Securities and Exchange Commission (SEC) civil lawsuit.
The case centers on a scheme that caused an actual fraud loss of approximately $404.7 million, which was later reduced to about $288.4 million after accounting for collateral seized by federal authorities when the SEC placed Par Funding in receivership in July 2020.
According to court filings and statements made during proceedings, Par Funding operated as a merchant cash advance company based in Center City Philadelphia, providing short-term financing to small businesses nationwide. To fund these advances, the company raised hundreds of millions from investors while making false and misleading claims about its leadership, underwriting practices, financial condition, and risk profile.
The indictment detailed how defendants concealed the identity and criminal history of founder Joseph LaForte and misrepresented key aspects such as underwriting standards, portfolio performance, default rates, profitability, insurance coverage, and insider dealings. These actions were used to attract and retain investments needed for the company's operations, which could not sustain itself without new investor funds.
Several principals involved with Par Funding have also pleaded guilty and received prison sentences. Joe LaForte was sentenced to approximately 15½ years for racketeering conspiracy; his brother James LaForte received roughly 11½ years; CFO Joseph Cole Barleta was sentenced to 5½ years; Perry Abbonizio, Renato Gioe, Lisa McElhone, Rodney Ermel, and Kenneth Bacon also pleaded guilty to felony offenses related to their roles with the company.
The investigation was conducted by the FBI, FDIC Office of Inspector General (OIG), IRS Criminal Investigation division, Pennsylvania State Police, and prosecuted by Assistant United States Attorneys Matthew Newcomer, Samuel Dalke, and Eric Gill. The SEC's Florida office investigated the civil securities fraud charges that contributed to this criminal prosecution.
