Par Funding Pleads Guilty to Defrauding Investors

PHILADELPHIA - United States Attorney David Metcalf announced that Complete Business Solutions Group, Inc., doing business as Par Funding ("Par Funding"), entered a plea of guilty before United States District Court Judge Mark A. Kearney to conspiracy to commit wire fraud and securities fraud arising from a wide-ranging scheme that defrauded investors out of hundreds of millions of dollars.

In January 2025, the Court found the Par Funding fraud scheme caused an actual fraud loss of approximately $404,737,299, which it reduced to $288,395,088 after factoring in credit for collateral that federal authorities seized from Par Funding when the investigation became public in July 2020, upon the SEC placing Par Funding in receivership.

According to court filings and statements made in court, Par Funding operated a merchant cash advance company in Center City Philadelphia that provided short-term financing to small businesses across the country. To fund those advances, the company and its principals raised hundreds of millions of dollars from investors while making materially false and misleading representations regarding the company's leadership, underwriting practices, financial condition, and risk profile.

As described in the indictment, the defendants concealed the identity and criminal history of company founder Joseph LaForte, misrepresented the company's underwriting standards and portfolio performance, and misled investors about default rates, profitability, insurance coverage, and self-dealing by company insiders. These misrepresentations were used to solicit and maintain investments used to finance the company's merchant cash advance business.

The Par Funding investigation has also resulted in guilty pleas and sentences for several individuals involved in the company's operations. Joe LaForte, the company's founder and leader, pleaded guilty to racketeering conspiracy and related offenses, and was sentenced to approximately 15½ years in prison. His brother, James LaForte, a senior executive involved in enforcing collections, also pleaded guilty and received a sentence of roughly 11½ years. Joseph Cole Barleta, the company's CFO, pleaded guilty to racketeering conspiracy and was sentenced to 5½ years in prison. Perry Abbonizio, Renato Gioe, Lisa McElhone, Rodney Ermel, and Kenneth Bacon also pleaded guilty to felony offenses related to their involvement with Par Funding and the LaFortes, and where each received a prison sentence.

This case was investigated by the FBI, FDIC OIG, IRS Criminal Investigation, and the Pennsylvania State Police and is being prosecuted by Assistant United States Attorneys Matthew Newcomer, Samuel Dalke, and Eric Gill. The SEC in Florida investigated and litigated the civil securities fraud charges, which formed the basis of a portion of the criminal prosecution.