Our south Florida securities and investment fraud attorneys are investigating claims on behalf of investors in PAR Funding and related companies. On July 24, 2020, the Securities and Exchange Commission (“SEC”), brought an emergency action against a number of individuals and entities, including but not limited to John Gissas and his central-Florida based company, Retirement Evolution Group, LLC, for their roles in an alleged half billion dollar fraud scheme.
The SEC brought its emergency action to immediately halt the nation-wide fraud, which is believed to have harmed over 1,200 investors. The SEC is seeking a temporary restraining order and by freezing assets. A link to the charges can be found here, which was unsealed on Friday, July 31, 2020.
Summary Of The PAR Funding Scheme
In the Complaint, the SEC alleged that Joseph W. LaForte (a convicted felon) and his wife, Lisa McElhone orchestrated a scheme to defraud investors, using unregistered securities offerings for Complete Business Solutions Group (CBSG). CBSG was a cash advance company they controlled, that did business under the name “Par Funding.” Fidelis and other companies served as sellers of these and related deals.
The Complaint further alleges that the couple’s scheme was to make “. . .opportunistic loans – some of which charge more than 400% interest – to small businesses across America.” To perpetuate their scheme and fuel the small business loans, the couple (with help from other Par Funding employees) used a network of unlicensed sales agents and affiliates to sell promissory notes to public investors. In addition, the couple and their counterparts lied to investors about their business and use of investor funds, while concealing LaForte’s criminal history and role with the offerings.
One key figure involved in the couple’s network of sales agents was Wildwood, FL resident, John Gissas and his company Retirement Evolution Group, LLC (“REG”). Gissas, through REG, solicited retirees and retail investors seeking income through radio broadcasts, newspaper, “ads and other marketing claiming that the investment was conservative and paid a high return.” Gissas primarily targeted the central-Florida-based retirement community called The Villages.
John Gissas And Retirement Evolution Group, LLC
Gissas, along with other key figures in this scheme, Michael C. Furman, and Dean J. Vagnozzi, each operated “Agent Funds” that were designed to raise money for Par Funding, via unregistered securities offerings. To raise money for Par Funding, Gissas offered and sold investments in his Agent Funds, called RE Fund and RE Fund 2.
According to the SEC’s Complaint, to solicit investors, “Gissas and Retirement Evolution advertise the securities offerings on the RE Fund website . . . . Gissas and Retirement Evolution also use newspaper advertisements, largely in The Villages retirement community in Florida, to invite the public to lunches and dinners where Gissas, sometimes with the assistance of Abbonizio, solicits the audience to invest in the RE Funds, which will invest in Par Funding Notes.”
The Complaint further adds that RE Income Fund has raised more than $5.4 million from at least 62 investors, as early as May, 2018 and RE Income Fund 2 has raised at least $150,000, beginning no later than August 1, 2019. In total, however, Gissas, Retirement Evolution and the RE Funds have raised “at least $12 million from investors.”
Making matters worse, Gissas has not stopped preying on vulnerable investors. The SEC noted that Gissas and Retirement Evolution have maintained a continued presence in The Villages newspapers ads, as late as July 2020. One of these ads even pitched “. . . a luncheon seminar about alternative investments with annual returns of 8% and 10% paid monthly, scheduled for the week of July 13, 2020.”
Recently, on July 28, 2020 the U.S. District Court for the Southern District of Florida granted the SEC’s emergency action, ordering a temporary asset freeze against LaForte, his wife McElhone, Par Funding, Full Spectrum Processing Inc., – another company owned by LaForte and his wife, and other various entities and individuals, including Gissas and REG. The Court also approved the SEC’s request to appoint a receiver over the eleven defendant-entities named in the Complaint. This week, a hearing was held on August 4, 2020 to deciding if a preliminary injunction will be granted against each of the defendants during this litigation.
This is another in a series of cases involving unregistered brokers preying on south Florida residents selling assets that are allegedly safer because they are not directly tied to the stock market. These unregistered brokers used third-party professionals to help set up a complex web of companies to mask the misconduct and create the appearance of a well run business.
Did You Lose Money Investing With Retirement Evolution Group?
Our investment fraud attorneys frequently represent invetors in and around the Villages, Florida. Unfortunately, due to its high concentration of retirees and others seeking fixed income investments, many con artists target The Villages community. If you or someone you know invested money with John Gissas and/or Retirement Evolution Group LLC, there may be recovery available.
At Silver Law Group, our nationally-recognized securities and investment fraud attorneys assist investors throughout the U.S. We are investigating Par Funding and possible avenues of recovery for investors. If you or someone you know invested with John Gissas and/or Retirement Evolution Group LLC, please contact the Silver Law Group toll free at (800)-975-4799 or e-mail email@example.com for a confidential consultation.