Title: Allegations of a Massive Philadelphia Lending Scheme Shake the Financial Sector
Joseph LaForte, along with associates, promoted Par Funding as a legitimate cash-advance business, but federal authorities claim it was a near $550 million fraud — one of Philadelphia’s largest financial crimes. In 2019, LaForte wooed around 300 potential investors during a lavish dinner, boasting of impressive returns that masked his dubious history as a two-time felon, convicted of financial crimes.
Investigations revealed that LaForte misrepresented his financial stake, claiming to have invested $500,000 when he had not contributed any capital to Par Funding, and that the business was not thriving as he asserted. Instead, it faced substantial financial scrutiny, with over 1,000 lawsuits filed against borrowers failing to meet exorbitant repayment demands.
Law enforcement uncovered a violent operational culture behind Par Funding, involving threats against debtors and even connections to organized crime. LaForte’s criminal record, coupled with the revelation that his brother is linked to the Gambino family, casts a long shadow over the operation.
In July 2020, the SEC initiated legal action against LaForte and his associates, stripping them of control over the firm and appointing a receiver to reclaim millions for investors. Despite settling for $230 million, LaForte, his wife, and key executives are facing criminal indictments for a range of charges, including racketeering and tax evasion.
The fallout has devastated investors and affected the borrowers who were exploited by Par Funding’s tactics. While some investors may be compensated, the legal landscape remains tumultuous, with criminal trials impending that could reveal deeper connections between financial misconduct and organized crime. As this saga unfolds, it has become a cautionary tale about trust and integrity in the lending business.
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