Complete Business Solutions Group, Inc., known as Par Funding, pleaded guilty on Mar. 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 large-scale scheme that resulted in an actual fraud loss of approximately $404 million, later reduced to about $288 million after accounting for collateral seized by federal authorities when the SEC placed Par Funding into receivership in July 2020. The company operated as a merchant cash advance business based in Center City Philadelphia, providing short-term financing to small businesses nationwide while raising funds from investors through false and misleading statements about its operations and financial health.
Court documents state that Par Funding concealed the identity and criminal history of its founder Joseph LaForte, misrepresented underwriting standards and portfolio performance, and provided inaccurate information regarding default rates, profitability, insurance coverage, and insider dealings. These actions were used to attract new investments necessary for sustaining the business model.
Several principals involved with Par Funding have also pleaded guilty and received prison sentences. Founder Joseph 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, 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 the criminal prosecution.
