Man with mob ties defrauds investors
Moderator: Capos
-
Fughedaboutit
- Full Patched
- Posts: 1566
- Joined: Mon Nov 07, 2016 9:58 pm
Re: Man with mob ties defrauds investors
Why is he smiling? Gotta be from the other bust he is in long sleeves
"I wanna hear some noise." "Tell Salvie to clean the boat, the whole boat top to bottom" -Nicodemo "Nicky" Scarfo Sr"
Re: Man with mob ties defrauds investors
You look at his history and this guy just moves from one thing to the next. Bookmaking, loansharking, mortgage fraud, and now this.
All roads lead to New York.
-
TommyGambino
- Full Patched
- Posts: 2583
- Joined: Sun Mar 01, 2015 8:46 am
Re: Man with mob ties defrauds investors
Is he with the Gambino's then?
-
TommyGambino
- Full Patched
- Posts: 2583
- Joined: Sun Mar 01, 2015 8:46 am
Re: Man with mob ties defrauds investors
Think this is his twitter https://twitter.com/joseph_laforte?ref_ ... r%5Eauthor
Re: Man with mob ties defrauds investors
I skimmed through the docs and couldn't see any mention of the Gambinos.
I wonder if he's John LaForte's younger brother.
Re: Man with mob ties defrauds investors
With false promises and fancy dinners, Philly-based operation fleeced small investors, SEC charges
by Erin Arvedlund and Joseph N. DiStefano, Posted: July 31, 2020 - 5:00 AM
With false promises and fancy dinners, Philly-based operation fleeced small investors, SEC charges
ELIZABETH ROBERTSON / STAFF PHOTOGRAPHER
Robert Hawrylak, who invested half his savings in what federal regulators say was a fraudulent scheme.
The pitch on KYW radio sold Robert Hawrylak. He liked the promised 10% return and the pledge that he could get back his principal in a year.
The part-time teacher and Boothwyn resident took $50,000 from his Fidelity Investments accounts — “half my life savings” — and invested it with a financial outfit known as Par Funding.
But when Hawrylak, 65, went to get his investment back this spring, he learned some bad news: no more 10% return, and he would have to wait years for his money.
Sol Mermelstein, 67, an Upper Dublin real estate broker, was won over in 2018 at a free dinner at the Capital Grille in King of Prussia.
“They gave a very polished presentation,” Mermelstein said. “They said defaults were minimal. And no investor has ever lost a dime.”
The pitches were part of a wide-ranging fraud, according to federal regulators.
In a sweeping new complaint, the Securities and Exchange Commission said that the couple who operated Par Funding out of Philadelphia, joined by others, raised almost $500 million nationwide from 1,200 investors by selling “unregistered, fraudulent securities offerings” with lies.
Using undercover operatives posing as investors, and at least one FBI recording, regulators uncovered a web of pitchmen and women stretching from Philadelphia to Florida, who turned high-interest cash-advance loans to small businesses into an investment vehicle to gull investors. At the center of the multistate web were Joseph W. LaForte, 50, and his wife, Lisa McElhone, 40, the agency said.
» READ MORE: Fined by SEC, Dean Vagnozzi keeps his insurance license, says he plans an IPO
The SEC said the group misled investors about the safety of their investments and their borrowers’ default rate on loans. It said their victims were kept in the dark about LaForte’s criminal record. He used aliases to hide his convictions in a $14 million Ponzi-like scheme and an illegal offshore gambling operation, it said.
Among those who allegedly helped raise millions were two veteran financial businessmen, Perry Abbonizio, 62, and Dean Vagnozzi, 51, both from Montgomery County. The SEC complaint against Vagnozzi was only the latest blow for him; he has previously agreed to pay $990,000 over the last two years to settle alleged securities violations.
At one point this year, the SEC says, Vagnozzi said Par Funding has the lure of “crack cocaine.” He apparently didn’t realize he was talking to an undercover operative — a poseur acting, the complaint says with little elaboration, at the direction of law enforcement.
LaForte and his wife, who now live in south Florida, where the complaint was filed Friday, offered loans through a company they and Abbonizio owned, Par Funding, that operated for years out of an office on Third Street in Old City.
The full complaint is available below:
Lawyers for LaForte, McElhone, and Vagnozzi didn’t return repeated calls for comment, nor did Abbonizio and Par Funding.
Investors are still hoping to get their money back eventually, even without the higher interest they say they were led to expect. The SEC is asking a federal judge to freeze the assets of LaForte and McElhone, Vagnozzi, and Abbonizio, and others, and to name a receiver to protect remaining investor assets.
A real estate scheme
In 2006, LaForte was convicted in New York state of masterminding a $14 million real estate Ponzi scheme. He was sentenced to serve at least three years in prison. Three years after that, he pleaded guilty to federal criminal charges in New Jersey for conspiracy to operate an offshore gambling business.
Joseph W. LaForte is escorted out of police headquarters in Mineola, N.Y., on Oct. 26, 2005. Members of the LaForte family were charged with running a $14 million real estate scam.
ELLIS KAPLAN NY POST / ELLIS KAPLAN
Joseph W. LaForte is escorted out of police headquarters in Mineola, N.Y., on Oct. 26, 2005. Members of the LaForte family were charged with running a $14 million real estate scam.
He left prison in 2011 and soon founded Par Funding with his wife while on supervised release. Abbonizio was also an owner.
Their niche was making loans to businesses at very high interest rates. Investors financed the loans by investing in the funds set up by Vagnozzi and others. But the loans were uninsured, and as more and more of the loans fell into default this spring, investors were told their promised returns would be substantially diminished, and they would not be able to recover their principal for several years.
The SEC was harsh about their business model. “The McElhone-LaForte duo is in the business of making opportunistic loans — some of which charge more than 400% interest — to small businesses across America,” the SEC complaint reads. A sample of loans found more than half carried interest rates of more than 95%.
The federal agency also alleges that Par Funding even threatened those who owed money. While the new complaint provided little detail, Bloomberg reported in 2018 that a felon who collected debts for Par insinuated harm could come to a debtor’s family. “These are the kind of things which strongly affect wives and children,” the collector was quoted as saying.
Dean Vagnozzi, pictured in this 2018 ad in InsuranceNewsNet magazine, offers a variety of investments designed as alternatives to the stock market.
HANDOUT
Dean Vagnozzi, pictured in this 2018 ad in InsuranceNewsNet magazine, offers a variety of investments designed as alternatives to the stock market.
How to be ‘finders’
Meanwhile, Vagnozzi formed A Better Financial Plan in 2010 in King of Prussia to offer alternative investments to the stock market, such as annuities. He later drummed up investors for Par Funding, raising at least $28 million, the SEC alleges.
His career hit turbulent water recently. Over the last two years, Vagnozzi agreed to pay large fines to resolve regulatory complaints. In 2019, he paid Pennsylvania $490,000 to settle a complaint that he had failed to register with the state to sell securities. Two weeks ago, he agreed to pay $500,000 to settle a federal complaint that he was selling unregistered securities. He did not admit wrongdoing in either case.
» READ MORE: Philly-area salesman raised $5 million for a Florida man under SEC investigation in fraud
As regulatory scrutiny increased, Vagnozzi switched tactics, the SEC said. He urged others to create their own pools to invest in Par Funding, while taking a quarter of their profits, the suit says. The suit suggests this was an end-run around Pennsylvania securities regulations. As recently as April, Vagnozzi hosted a Zoom call in which he recruited people to raise money for Par Funding, the complaint says. On the call, Vagnozzi said that he wanted to teach people how to be “finders” so that they would not get into “any trouble” as unregistered broker-dealers.
Vagnozzi recruited as many as 40 agents, as he and Abbonizio trained people to raise money for Par Funding, the SEC alleges.
(In 2015, Abbonizio was fined $10,000 by industry regulators and briefly suspended for a violation of financial rules.)
Seminars and investments
Vagnozzi and Abbonizio also hosted large meetings, such as one on Nov. 21, 2019, cited at length in the complaint. Pitching more than 300 people, Vagnozzi solicited people to invest in Par Funding, the SEC filing states.
Attendees were handed a one-page flyer describing investment opportunities and touting the kind of investments made by Par Funding. It said they had only a 2% default rate on their loans to merchants, and offered 10% to 14% returns, with principal returned in as little as a year.
Vagnozzi told the attendees that he had “stock-market alternative investments that are secure,” that an investment in Par Funding had not “too much risk,” and was “knocking it out of the park,” according to the SEC complaint.
Next up was Abbonizio. He told the audience Par Funding had a default rate of 1%, even lower than the number in the flyer.
The next speaker, LaForte, called Par Funding “probably the most profitable cash advance company in the United States and maybe in the world,” the SEC said. The agency said LaForte has variously claimed to have invested $80 million or $500,000 himself in the firm — but actually hadn’t put in a dollar.
As for the default rate, the SEC said the claims were “false and misleading.” In fact, it said Par Funding had brought 2,000 collections lawsuits against borrowers for defaulting, half filed in Philadelphia. The complaint says that half of the firm’s $600 million in loans were in default, and that the true default rate was far higher than 1% or 2%.
Par Funding blamed business shutdown prompted by the coronavirus for what happened next.
In March, according to documents obtained by The Inquirer, Vagnozzi emailed investors a message about the hit from COVID-19. It read: “Par Funding has defaulted on a note with the fund that you each invested in, and they will continue to default for the next few months.”
Payments to investors stopped in April and May. In the same email, Vagnozzi wrote that it would not be productive to sue Par Funding, and said he was working with Par to restructure the payments.
That restructuring was expensive for investors such as Hawrylak, the teacher from Delaware County.
Early in 2019, Hawrylak, after hearing about the program on the radio, attended a Vagnozzi seminar in King of Prussia. Hawrylak said he especially liked Vagnozzi’s reassurance that the investment was insured.
There was no such insurance, according to the SEC.
When he put in his $50,000 last year, Hawrylak said, he expected to earn at least 10% annually on it. He also said he liked the fact that the plan gave him the right to get back his original investment at the end of a year.
After his monthly payments were halted in April, Vagnozzi offered a replacement paying just 4%. Hawrylak could get his $50,000 back — over seven years. Reluctantly, he agreed.
For his part, investor Mermelstein said that he and his accountant followed up on the free 2018 dinner at the Capital Grille by visiting Abbonizio, meeting him at the Par Funding office in Old City. Mermelstein handed over a check for $110,000.
Mermelstein said he had expected to get his principal back in 2020.
But he, too, heard from Vagnozzi that terms had changed — Par Funding couldn’t return his money or pay the promised 10% interest. He, too, accepted the new reduced yield of 4%, and the same delay in the repayment of his principal.
Belatedly, he did a little more research — and discovered that Par Funding and Vagnozzi had agreed to pay to settle regulatory complaints over previous schemes.
“If I had known that’s how their operations had gone,” Mermelstein said, “I would not have invested
by Erin Arvedlund and Joseph N. DiStefano, Posted: July 31, 2020 - 5:00 AM
With false promises and fancy dinners, Philly-based operation fleeced small investors, SEC charges
ELIZABETH ROBERTSON / STAFF PHOTOGRAPHER
Robert Hawrylak, who invested half his savings in what federal regulators say was a fraudulent scheme.
The pitch on KYW radio sold Robert Hawrylak. He liked the promised 10% return and the pledge that he could get back his principal in a year.
The part-time teacher and Boothwyn resident took $50,000 from his Fidelity Investments accounts — “half my life savings” — and invested it with a financial outfit known as Par Funding.
But when Hawrylak, 65, went to get his investment back this spring, he learned some bad news: no more 10% return, and he would have to wait years for his money.
Sol Mermelstein, 67, an Upper Dublin real estate broker, was won over in 2018 at a free dinner at the Capital Grille in King of Prussia.
“They gave a very polished presentation,” Mermelstein said. “They said defaults were minimal. And no investor has ever lost a dime.”
The pitches were part of a wide-ranging fraud, according to federal regulators.
In a sweeping new complaint, the Securities and Exchange Commission said that the couple who operated Par Funding out of Philadelphia, joined by others, raised almost $500 million nationwide from 1,200 investors by selling “unregistered, fraudulent securities offerings” with lies.
Using undercover operatives posing as investors, and at least one FBI recording, regulators uncovered a web of pitchmen and women stretching from Philadelphia to Florida, who turned high-interest cash-advance loans to small businesses into an investment vehicle to gull investors. At the center of the multistate web were Joseph W. LaForte, 50, and his wife, Lisa McElhone, 40, the agency said.
» READ MORE: Fined by SEC, Dean Vagnozzi keeps his insurance license, says he plans an IPO
The SEC said the group misled investors about the safety of their investments and their borrowers’ default rate on loans. It said their victims were kept in the dark about LaForte’s criminal record. He used aliases to hide his convictions in a $14 million Ponzi-like scheme and an illegal offshore gambling operation, it said.
Among those who allegedly helped raise millions were two veteran financial businessmen, Perry Abbonizio, 62, and Dean Vagnozzi, 51, both from Montgomery County. The SEC complaint against Vagnozzi was only the latest blow for him; he has previously agreed to pay $990,000 over the last two years to settle alleged securities violations.
At one point this year, the SEC says, Vagnozzi said Par Funding has the lure of “crack cocaine.” He apparently didn’t realize he was talking to an undercover operative — a poseur acting, the complaint says with little elaboration, at the direction of law enforcement.
LaForte and his wife, who now live in south Florida, where the complaint was filed Friday, offered loans through a company they and Abbonizio owned, Par Funding, that operated for years out of an office on Third Street in Old City.
The full complaint is available below:
Lawyers for LaForte, McElhone, and Vagnozzi didn’t return repeated calls for comment, nor did Abbonizio and Par Funding.
Investors are still hoping to get their money back eventually, even without the higher interest they say they were led to expect. The SEC is asking a federal judge to freeze the assets of LaForte and McElhone, Vagnozzi, and Abbonizio, and others, and to name a receiver to protect remaining investor assets.
A real estate scheme
In 2006, LaForte was convicted in New York state of masterminding a $14 million real estate Ponzi scheme. He was sentenced to serve at least three years in prison. Three years after that, he pleaded guilty to federal criminal charges in New Jersey for conspiracy to operate an offshore gambling business.
Joseph W. LaForte is escorted out of police headquarters in Mineola, N.Y., on Oct. 26, 2005. Members of the LaForte family were charged with running a $14 million real estate scam.
ELLIS KAPLAN NY POST / ELLIS KAPLAN
Joseph W. LaForte is escorted out of police headquarters in Mineola, N.Y., on Oct. 26, 2005. Members of the LaForte family were charged with running a $14 million real estate scam.
He left prison in 2011 and soon founded Par Funding with his wife while on supervised release. Abbonizio was also an owner.
Their niche was making loans to businesses at very high interest rates. Investors financed the loans by investing in the funds set up by Vagnozzi and others. But the loans were uninsured, and as more and more of the loans fell into default this spring, investors were told their promised returns would be substantially diminished, and they would not be able to recover their principal for several years.
The SEC was harsh about their business model. “The McElhone-LaForte duo is in the business of making opportunistic loans — some of which charge more than 400% interest — to small businesses across America,” the SEC complaint reads. A sample of loans found more than half carried interest rates of more than 95%.
The federal agency also alleges that Par Funding even threatened those who owed money. While the new complaint provided little detail, Bloomberg reported in 2018 that a felon who collected debts for Par insinuated harm could come to a debtor’s family. “These are the kind of things which strongly affect wives and children,” the collector was quoted as saying.
Dean Vagnozzi, pictured in this 2018 ad in InsuranceNewsNet magazine, offers a variety of investments designed as alternatives to the stock market.
HANDOUT
Dean Vagnozzi, pictured in this 2018 ad in InsuranceNewsNet magazine, offers a variety of investments designed as alternatives to the stock market.
How to be ‘finders’
Meanwhile, Vagnozzi formed A Better Financial Plan in 2010 in King of Prussia to offer alternative investments to the stock market, such as annuities. He later drummed up investors for Par Funding, raising at least $28 million, the SEC alleges.
His career hit turbulent water recently. Over the last two years, Vagnozzi agreed to pay large fines to resolve regulatory complaints. In 2019, he paid Pennsylvania $490,000 to settle a complaint that he had failed to register with the state to sell securities. Two weeks ago, he agreed to pay $500,000 to settle a federal complaint that he was selling unregistered securities. He did not admit wrongdoing in either case.
» READ MORE: Philly-area salesman raised $5 million for a Florida man under SEC investigation in fraud
As regulatory scrutiny increased, Vagnozzi switched tactics, the SEC said. He urged others to create their own pools to invest in Par Funding, while taking a quarter of their profits, the suit says. The suit suggests this was an end-run around Pennsylvania securities regulations. As recently as April, Vagnozzi hosted a Zoom call in which he recruited people to raise money for Par Funding, the complaint says. On the call, Vagnozzi said that he wanted to teach people how to be “finders” so that they would not get into “any trouble” as unregistered broker-dealers.
Vagnozzi recruited as many as 40 agents, as he and Abbonizio trained people to raise money for Par Funding, the SEC alleges.
(In 2015, Abbonizio was fined $10,000 by industry regulators and briefly suspended for a violation of financial rules.)
Seminars and investments
Vagnozzi and Abbonizio also hosted large meetings, such as one on Nov. 21, 2019, cited at length in the complaint. Pitching more than 300 people, Vagnozzi solicited people to invest in Par Funding, the SEC filing states.
Attendees were handed a one-page flyer describing investment opportunities and touting the kind of investments made by Par Funding. It said they had only a 2% default rate on their loans to merchants, and offered 10% to 14% returns, with principal returned in as little as a year.
Vagnozzi told the attendees that he had “stock-market alternative investments that are secure,” that an investment in Par Funding had not “too much risk,” and was “knocking it out of the park,” according to the SEC complaint.
Next up was Abbonizio. He told the audience Par Funding had a default rate of 1%, even lower than the number in the flyer.
The next speaker, LaForte, called Par Funding “probably the most profitable cash advance company in the United States and maybe in the world,” the SEC said. The agency said LaForte has variously claimed to have invested $80 million or $500,000 himself in the firm — but actually hadn’t put in a dollar.
As for the default rate, the SEC said the claims were “false and misleading.” In fact, it said Par Funding had brought 2,000 collections lawsuits against borrowers for defaulting, half filed in Philadelphia. The complaint says that half of the firm’s $600 million in loans were in default, and that the true default rate was far higher than 1% or 2%.
Par Funding blamed business shutdown prompted by the coronavirus for what happened next.
In March, according to documents obtained by The Inquirer, Vagnozzi emailed investors a message about the hit from COVID-19. It read: “Par Funding has defaulted on a note with the fund that you each invested in, and they will continue to default for the next few months.”
Payments to investors stopped in April and May. In the same email, Vagnozzi wrote that it would not be productive to sue Par Funding, and said he was working with Par to restructure the payments.
That restructuring was expensive for investors such as Hawrylak, the teacher from Delaware County.
Early in 2019, Hawrylak, after hearing about the program on the radio, attended a Vagnozzi seminar in King of Prussia. Hawrylak said he especially liked Vagnozzi’s reassurance that the investment was insured.
There was no such insurance, according to the SEC.
When he put in his $50,000 last year, Hawrylak said, he expected to earn at least 10% annually on it. He also said he liked the fact that the plan gave him the right to get back his original investment at the end of a year.
After his monthly payments were halted in April, Vagnozzi offered a replacement paying just 4%. Hawrylak could get his $50,000 back — over seven years. Reluctantly, he agreed.
For his part, investor Mermelstein said that he and his accountant followed up on the free 2018 dinner at the Capital Grille by visiting Abbonizio, meeting him at the Par Funding office in Old City. Mermelstein handed over a check for $110,000.
Mermelstein said he had expected to get his principal back in 2020.
But he, too, heard from Vagnozzi that terms had changed — Par Funding couldn’t return his money or pay the promised 10% interest. He, too, accepted the new reduced yield of 4%, and the same delay in the repayment of his principal.
Belatedly, he did a little more research — and discovered that Par Funding and Vagnozzi had agreed to pay to settle regulatory complaints over previous schemes.
“If I had known that’s how their operations had gone,” Mermelstein said, “I would not have invested
Re: Man with mob ties defrauds investors
I wonder how much the Gambinos have going on in Philly ? Seems like they set up some operations and have different pple operating in Philly .Wonder to what extent ? When you look up Par funding they have a nice amount of complaints and accusations over the last 2 years
Re: Man with mob ties defrauds investors
Guys it says right in the article he is the grandfather of joe the cat laforte of the gambinos and buddy laforte of the gambinos is another relative. Hes most likely independent because you dont need muscle to do this kind of thing and to the mob it probably looked legit too.
“In Italian, La Cosa Nostra is also known as ‘our headache.’” -Jerry Anguilo
Re: Man with mob ties defrauds investors
I know he is thats why Im bringing up John LaForte..Extortion wrote: ↑Sat Aug 01, 2020 6:26 amGuys it says right in the article he is the grandfather of joe the cat laforte of the gambinos and buddy laforte of the gambinos is another relative. Hes most likely independent because you dont need muscle to do this kind of thing and to the mob it probably looked legit too.
Re: Man with mob ties defrauds investors
Both Merlino and Borgesi have guys that were doing similar mortgage and payday lending scams. Would be interested if they were getting a cut of this particular operation. Charles Hallinan whose in jail now as of a year or two ago was in business with Merlino and was connected to the Philly family as far back as Scarfo. Steven Sharkey was doing the same mortgage scam as LaForte got pinched for a few years ago also.
Re: Man with mob ties defrauds investors
These small business loans ( factor / accounts receivable loans ) became rampant after the credit crisis as banks pulled back
Many of them are run by Italians and you can charge over 100% rates legally as the charge off are so high
Pretty easy way to do legal business loan sharking so I would be surprised if the savvy crews aren’t involved with some of them.
Similar to check cashing business but more legit lol
Many of them are run by Italians and you can charge over 100% rates legally as the charge off are so high
Pretty easy way to do legal business loan sharking so I would be surprised if the savvy crews aren’t involved with some of them.
Similar to check cashing business but more legit lol
Re: Man with mob ties defrauds investors
In 2006 he and his brother James were charged with running a bookmaking and loansharking operation that extended from New York to New Jersey and Florida so, besides the family pedigree, in all likelihood they are connected.Extortion wrote: ↑Sat Aug 01, 2020 6:26 amGuys it says right in the article he is the grandfather of joe the cat laforte of the gambinos and buddy laforte of the gambinos is another relative. Hes most likely independent because you dont need muscle to do this kind of thing and to the mob it probably looked legit too.
All roads lead to New York.