James LaForte Sentenced to 11½ Years for RICO Conspiracy, Obstruction, and Retaliation in Par Funding Fraud Case
Philadelphia, PA – January 21, 2025 –
James LaForte, 48, of New York, NY, has been sentenced to 137 months (11½ years) in prison for his role in a sprawling criminal enterprise tied to the fraudulent investment scheme known as Par Funding. LaForte, who served as an enforcer for the operation, was also ordered to pay $2.5 million in restitution and will face three years of supervised release, including 12 months of home confinement. His crimes include racketeering conspiracy, securities fraud, extortion, obstruction of justice, and retaliation against witnesses and legal officials. The sentencing marks a significant milestone in the unraveling of one of Philadelphia’s largest financial fraud cases, which defrauded investors of hundreds of millions of dollars.
Key Details of the Case:
- The Scheme: Par Funding, operating under the name Complete Business Solutions Group, Inc., was a fraudulent investment vehicle that lured investors with promises of high returns. Instead, the LaForte brothers and their associates diverted funds for personal gain through sham contracts and self-dealing.
- The Violence: James LaForte was not only involved in the financial fraud but also acted as an enforcer, using threats and violence to collect debts and intimidate those who threatened the operation. His crimes include the brutal assault of a court-appointed receivership attorney and threats against government witnesses.
- The Fallout: The scheme caused an estimated million after accounting for seized collateral. The case involved multiple federal agencies, including the FBI, IRS, and FDIC Office of Inspector General, and led to guilty pleas from James LaForte, his brother Joseph LaForte (Par Funding’s CEO), and CFO Joseph Cole Barleta.
The Rise and Fall of Par Funding
Par Funding, a merchant cash advance company, operated under the guise of providing quick financing to small businesses. However, behind the scenes, it was a criminal enterprise orchestrated by Joseph LaForte, his brother James, and their associates. The company promised investors high returns but instead funneled millions into the pockets of its leaders through fraudulent means. The scheme began to unravel in July 2020 when the U.S. Securities and Exchange Commission (SEC) filed a civil lawsuit, leading to a court-appointed receivership to take control of Par Funding’s assets.
James LaForte played a critical role in maintaining the operation’s grip on its victims. As an enforcer, he used threats and violence to collect debts from merchants and silence anyone who posed a threat to the enterprise. His most egregious act was the brutal assault of a Philadelphia attorney working for the receivership, an attack intended to intimidate and retaliate against those seeking to hold the LaForte family accountable. Additionally, LaForte threatened government witnesses, further demonstrating his willingness to use violence to protect the criminal enterprise.
The Legal Reckoning
The investigation into Par Funding was a collaborative effort involving the FBI, IRS Criminal Investigation, and the FDIC Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Matthew Newcomer, Samuel Dalke, and Eric Gill. The SEC’s civil litigation in Florida provided the foundation for the criminal charges, which included racketeering conspiracy, securities fraud, and extortion.
In September 2024, James LaForte pleaded guilty to multiple charges, including racketeering conspiracy, securities fraud, extortionate collection of debt, obstruction of justice, and retaliation. His brother, Joseph LaForte, the mastermind behind Par Funding, also pleaded guilty to similar charges and is scheduled for sentencing on March 26, 2025. Joseph Cole Barleta, the company’s CFO, pleaded guilty to one count of racketeering conspiracy and will be sentenced on June 2, 2025.
During sentencing, U.S. Attorney David Metcalf emphasized the brazen nature of LaForte’s crimes, stating, “James LaForte not only used threats of violence to collect on Par Funding’s debt but also stalked and assaulted an attorney in retaliation for efforts to hold the LaForte family accountable. This brand of lawbreaking will not be tolerated.”
The Broader Impact
The Par Funding case highlights the devastating consequences of financial fraud and the lengths to which criminals will go to protect their illicit gains. The scheme defrauded hundreds of investors, many of whom lost their life savings. The court’s restitution order of 404 million. After accounting for seized collateral, the net fraud loss was adjusted to $288 million.
The case also underscores the importance of interagency collaboration in combating complex financial crimes. FBI Special Agent in Charge Wayne A. Jacobs praised the efforts of law enforcement partners, stating, “James LaForte participated in a criminal enterprise driven by greed and sustained through threats and violence. The FBI is proud to stand with our partners in the pursuit of justice.”
Collaborative Law Enforcement Efforts
The case was investigated by FBI Albany, with support from FBI field offices in New York, Newark, Richmond, and other locations. Assistance was provided by numerous law enforcement agencies, including Immigration and Customs Enforcement (ICE), the U.S. Department of State Diplomatic Security Service, and local police departments across multiple states. This collaborative effort highlights the extensive reach of the conspiracy and the determination of law enforcement to dismantle it.
Key Takeaways:
- Timeline of Events:
- July 2020: SEC files civil lawsuit against Par Funding, leading to a court-appointed receivership.
- February 2024: James LaForte, Joseph LaForte, and Joseph Cole Barleta are charged in an amended indictment.
- September 2024: James and Joseph LaForte plead guilty to multiple charges, including racketeering conspiracy and securities fraud.
- October 2024: Barleta pleads guilty to racketeering conspiracy.
- January 2025: James LaForte is sentenced to 11½ years in prison and ordered to pay $2.5 million in restitution.
- Individuals Involved:
- James LaForte: Enforcer for Par Funding, sentenced to 137 months in prison.
- Joseph LaForte: CEO of Par Funding, pleaded guilty and awaits sentencing.
- Joseph Cole Barleta: CFO of Par Funding, pleaded guilty and awaits sentencing.
- Major Events:
- Assault on a receivership attorney.
- Threats against government witnesses.
- Diversion of investor funds through sham contracts.
Conclusion
The sentencing of James LaForte marks a significant step in holding the perpetrators of the Par Funding fraud accountable. However, the case also serves as a stark reminder of the human cost of financial crimes and the importance of vigilance in protecting investors. As the legal proceedings continue against Joseph LaForte and Joseph Cole Barleta, the victims of this scheme can take some solace in knowing that justice is being served. The collaborative efforts of federal agencies and prosecutors have ensured that those who sought to profit through fraud and violence will face the consequences of their actions.
