Securities And Exchange Commission Charges Par Funding, United Fidelis Group And Others In Half-Billion Dollar Fraud Scheme

On July 24, 2020, the Securities and Exchange Commission (“SEC”), brought an emergency action against Par Funding and others, to obtain a temporary restraining order and freeze assets in order to halt a nearly half-billion dollar fraud scheme, harming over 1,200 across the U.S. A link to the charges can be found here, which was unsealed on Friday, July 31, 2020.

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.”

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.

In the late 90’s LaForte worked for a number of securities broker-dealers. He obtained a Series 7 and 63 license in 1996 and a Series 24 in 1997. However, the SEC’s Complaint points out that each of LaForte’s licenses had expired during the scheme.

The Complaint also detailed LaForte’s criminal history:

“On October 4, 2006, LaForte was convicted of state charges in New York for grand larceny and money laundering, and on November 8, 2007 he was sentenced to three to ten years in prison and to pay restitution in the amount of $14.1 million. In 2009, LaForte pled guilty to federal criminal charges in the District of New Jersey for conspiracy to operate an illegal gambling business.  He was released from jail in February 2011 and founded Par Funding with his wife, McElhone, shortly thereafter while on supervised release.”

The SEC’s Complaint named a number of other defendants, including two former brokers with checkered histories:

1. Perry S. Abbonizio (CRD# 2787112) – previously registered with Morgan Stanley, Wells Fargo, Oppenheimer & Co with four (4) customer complaints) and
2. Dean J. Vagnozzi (CRD # 5490000) – suspended by the SEC on July 27, 2020 for 12 months

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 LaFote and his wife, and other various entities and individuals. 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 for the duration of this litigation.

Also named in the action is Michael Furman and his company United Fidelis Group Corp. operating as Fidelis Financial Planning LLC which issues, offers and sells promissory notes to investors in Palm Beach, Florida and elsewhere. Allegations against Fidelis include targeting seniors and others seeking income and misrepresenting these investments.

John Gissas and Retirement Evolution Group, LLC operating as Retirement Evolution Income Fund LLC targeted people in central Florida and specifically people living in The Villages, a large retirement community in the area. Gissas ran ads in local newspapers promising investors high returns.

Other Defendants include several business intended to imply these investments were suitable for retirees and others who could least afford to lose this money. Some of these companies include:

-ABETTERFINANCIALPLAN.COM LLC;

-ABFP MANAGEMENT COMPANY, LLC

-ABFP INCOME FUND, LLC;

-FIDELIS FIANCIAL PLANNING LLC;

-RETIREMENT EVOLUTION GROUP, LLC

-RE INCOME FUND 2, LLC.

According to the SEC, the Defendants worked together to defraud thousands of investors and to make opportunistic loans to small business across America. Par Funding has filed at least 2,000 lawsuits seeking about $300 million in missed payments from small business owners. Investors may share a similar fate and lose most of the money invested.

Did You Lose Money Investing With Par Funding/Complete Business Solutions Group, Inc.?

If you or someone you know invested money in Par Funding or its related entities, 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 ready to help you investigate the details of your situation and determine a course of action that is tailored to your needs and goals. If you or someone you know invested with Par Funding, please contact the Silver Law Group toll free at (800)-975-4345 or e-mail ssilver@silverlaw.com for a confidential consultation.