Federal officials say that Joseph LaForte and his wife Lisa McElhone, founders of the merchant cash-advance giant Par Funding, have fraudulently raised over half a billion dollars from investors. Par Funding is a lending company which offers “small business loans and working capital” for large and small businesses. LaForte, a convicted scammer whose grandfathers were “made men” in the Gambino Crime Family, is accused of “scheming and lying” to defraud over 1,200 investors. Among the alleged lies told by LaForte and his wife, was the notion that the loans Par Funding has given out would have a default rate below one percent. In reality, Par Funding’s loans have carried with them default rates of over ten percent, with the highest interest rate being reported at 400 percent.
The investor’s advocate
The U.S. Securities & Exchange Commission (the “SEC”) recently filed a complaint against Par Funding, along with LaForte and McElhone, stating that they are “in the business” of making opportunistic loans at the expense of small businesses. At the request of the SEC, a federal judge has appointed a receiver to take control of the lender. The receiver has since changed the locks to Par Funding’s office doors and has barred over 100 employees from gaining entry.
No Honor Among Thieves
Par Funding is not the only merchant cash-advance company under scrutiny. Recently, the Federal Trade Commission filed suit against Yellowstone Capital, accusing it of deceiving customers, and the New York Attorney General filed a similar suit against another lender in June. If you have borrowed from a merchant cash-advance lender and are looking to settle your debt, are involved in litigation with such a lender, or are the victim of wrongful or aggressive collection tactics, please reach out to Scott Bogucki at [email protected] or call 716/ 845-6446.