PHILADELPHIA, PA — In a landmark case highlighting the pervasive nature of white-collar crime, Joseph LaForte and his brother James LaForte admitted guilt in federal court Wednesday to a litany of charges connected to their operation of a fraudulent investment vehicle, Complete Business Solutions Group Inc., commonly known as Par Funding. The guilty pleas were entered before United States District Court Judge Mark A. Kearney, marking a pivotal moment in a complex legal saga that has captivated the Philadelphia region and beyond.
Joseph LaForte, 53, assumed the role of president and CEO within the organization, while his younger sibling, James LaForte, 47, operated in sales and collections, wielding considerable managerial authority. The duo’s criminal activities were brought to a halt in July 2020 when the Securities and Exchange Commission (SEC) intervened, placing the firm under a court-ordered receivership. This move effectively ousted the LaForte brothers from their positions of power, setting the stage for the unraveling of their extensive fraudulent operations.
The LaForte brothers orchestrated a scheme that defrauded investors out of over $100 million through Par Funding, misleading numerous investors, particularly in the Philadelphia area. The brothers fabricated and disseminated false information about the financial health, operational processes, and leadership of Par Funding. Joseph LaForte, in particular, concealed his involvement and past indiscretions by operating under the alias “Joe Mack” and utilizing his wife as a nominal owner to disguise his control over the company.
The indictment against the LaFortes painted a chilling picture of the tactics employed to sustain their operation. Joseph LaForte faced additional charges of tax evasion, perjury, and obstruction of justice, including aiding in a violent assault on a receivership attorney who was pivotal in reclaiming assets linked to the LaForte family. The elder LaForte also faced a firearms charge following the discovery of weapons in his residence during a search.
James LaForte admitted to further criminal conduct, including extortion and obstruction of justice. His violent methods were not limited to financial deception; he physically assaulted an attorney connected to the case and made threatening communications to potential witnesses, underscoring a willingness to resort to intimidation and violence to achieve their ends.
The legal proceedings have proposed that Joseph LaForte serve a prison sentence ranging from 13½ to 15½ years, while James LaForte faces 110 to 137 months behind bars. Joseph LaForte is also expected to pay significant restitution to the IRS and forfeit high-value assets, including a private jet and an investment account. These agreements await judicial approval to be finalized.
In February, the brothers were charged with violating the Racketeer Influenced and Corrupt Organizations Act (RICO), alongside securities and wire fraud, among other crimes. Their deceptive practices included fabrications about Par Funding’s underwriting process, default rates, and overall financial success. These misrepresentations were critical in luring investors and maintaining the facade of a legitimate and thriving enterprise.
This high-profile case was the result of extensive investigative work by the FBI, IRS Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant United States Attorneys Matthew Newcomer, Samuel Dalke, Eric Gill, Patrick J. Murray, along with former Assistant U.S. Attorney Alexandra Lastowski and DOJ Trial Attorney Ezra Spiro, spearheaded the prosecution efforts. The SEC’s involvement in the civil securities fraud investigation laid the groundwork for the criminal charges.
U.S. Attorney Jacqueline C. Romero highlighted the breadth and audacity of the LaFortes’ criminal endeavors, emphasizing the exploitation of investor trust and the severe impact on financial stability. FBI Special Agent in Charge Wayne A. Jacobs reiterated the agency’s commitment to dismantling complex financial crimes, while Amy MacNeely of IRS-Criminal Investigation praised the collaborative efforts in tackling the LaFortes’ extensive money laundering and tax fraud activities.
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