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 Michael C. Furman and his south-Florida based company, United Fidelis Group Corp., for their roles in an alleged half billion dollar fraud scheme.
The SEC brought its emergency action to immediately halt the nationwide 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 West Palm Beach, FL resident, Michael C. Furman and his company Fidelis Financial Planning LLC. Furman, through Fidelis, solicited retirees and retail investors seeking income through newspaper ads and other marketing claiming that the investment was conservative and paid a high return.
Michael C. Furman And Fidelis Financial Planning LLC
In the Complaint, the SEC alleged that Michael C. Furman, through his company, United Fidelis Group Corp., managed and operated Fidelis Financial Planning LLC (“Fidelis”). Fidelis is a pooled financial fund that was established to offer and sell promissory notes to unsuspecting investors, to raise money for Par Funding. According the SEC, “. . . Furman, through Fidelis Planning, has raised more than $5.8 million from investors for Par Funding. . .” via the sale of promissory notes, from August, 2018 through May 2019. According to bank records, it appears Furman and Fidelis actually raised over $11 million as of December, 2019.
Furman, along with other agents involved in this scheme, including Dean J. Vagnozzi and John Gissas, solicited a number of South-Florida investors to purchase these fraudulent promissory notes. The SEC detailed at least one sales pitch for Par Funding, made by Furman to investors, back in November 2017:
“Furman told the potential investors that Par Funding made loans to small businesses and charged 36% interest on the loans. Furman distributed Par Funding marketing materials, including a brochure, and touted Par Funding’s management expertise and its thorough due diligence in selecting borrowers. Furman also emphasized to the investors that their money would be safe and secure because the default rates on the Loans were 1% or less. Furman told the potential investors that the percentage of interest Par Funding would pay on its Notes would depend on the amount invested. He told them the higher the investment amount, the higher the interest rate and thus the return. He explained to the potential investors that if they invested $300,000-$400,000, Par Funding promised to pay the investors an annual return of 12.5% in monthly installments over one year. Furman provided the potential investors with offering materials, including the Par Funding Note.”
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 Furman and Fidelis. 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 on August 4, 2020 is scheduled for 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 United Fidelis Group Corp.?
If you or someone you know invested money with Micheal C. Furman and/or Fidelis Finanancial Planning 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 Micheal C. Furman and/or Fidelis Finanancial Planning LLC, please contact the Silver Law Group toll free at (800)-975-4345 or e-mail email@example.com for a confidential consultation.