Judge Orders the Founders of Par Funding to Pay $219 Million
Founders of Philadelphia-based Par Funding must pay $219 million in “ill-gotten gains,” fines and interest so the funds can be used to help reimburse 1,200 investors who were duped into buying the risky, unregistered securities used to finance the high-fee loan company, a federal judge has ruled.
Judge Rodolfo Ruiz II ordered Par founders Joseph LaForte and his wife, Lisa McElhone, to pay a court-appointed receiver $163.1 million in “disgorgement” of investors’ money and $12.2 million in interest, plus civil penalties totaling $43.7 million.
“There is no doubt that these violations are egregious,” Ruiz wrote in his order. “At every turn, LaForte and McElhone materially misled investors” and “withheld or lied about critical information” that would have warned investors about the risks of investing in loans to shaky businesses. Lawyers for the couple, in New York and Florida, did not return calls seeking comment on the settlement, or whether the couple has the means to pay it all.
