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Feds: Philly-based cash advance tycoon threatened to flee country with millions in his private plane before his arrest

Philadelphia Inquirer logo Philadelphia Inquirer 8/11/2020 By Jeremy Roebuck, The Philadelphia Inquirer

Joseph W. LaForte, the convicted scammer and founder of a Philadelphia cash advance company at the center of an alleged $500 million financial fraud, threatened to flee the country in his private plane and hide millions in untouchable, offshore accounts, federal prosecutors said Tuesday.

Speaking unknowingly to undercover FBI agents, LaForte allegedly laid out his plan to fly bulk shipments of cash earned through his business, Par Funding, to the tiny Caribbean island of Nevis. There, they said, he hoped to buy himself citizenship and keep his money out of the reach of investigators in the United States.

Prosecutors lodged the allegation during a federal court hearing Tuesday in which they successfully sought to keep the 49-year-old financier behind bars to wait for his trial on unrelated weapons charges. He’s been locked up since the FBI on Friday found four handguns, two shotguns and a rifle in his $2.4 million Lower Merion home.

But Tuesday’s proceedings also revealed for the first time details of a much wider, “long-running and ongoing” criminal probe targeting LaForte and his company and shed new light on the wealth he has managed to accumulate in the years since he started the firm after his release from two prison terms for a real estate scam and running an illegal gambling operation.

“The defendant, who has been used to a lifestyle of having several homes, multiple expensive cars, vast sums of money, a private jet and near limitless resources, now is a person facing not only a loss of that entire lifestyle but near certain conviction for [a firearms] offense that will result in incarceration,” Assistant U.S. Attorney Jonathan B. Ortiz wrote in court filings in advance of Tuesday’s proceedings. He “has a significant motivation, therefore, to flee.”

The FBI on Friday also took custody of LaForte’s private plane, $2.5 million in cash found in hidden in bundles at his properties and a $10 million bank account controlled by him and his wife, prosecutors said

Neither LaForte nor anyone else has not been charged with crimes related to the massive financial fraud described by the U.S. Securities and Exchange Commission in a civil suit filed in Florida late last month.

In it, the agency alleged LaForte, his company and his partners defrauded 1,200 investors whose money the company lent out in short-term, high-interest loans to small businesses across the country.

His attorneys scoffed Tuesday at being being a flight risk, saying he couldn’t have fled even if he wanted to: His assets are frozen, he has no passport and he has never traveled abroad.

“Did they find any travel bags packed by his door” when agents arrested him Friday, lawyer James R. Froccaro Jr. asked in court. “Did he drain all his bank accounts, hop onto a plane and head to Havana? No, he didn’t. He hired a lawyer to defend him against any charges that might be brought by the government.”

But as prosecutors described it in court filings Tuesday, LaForte and Par Funding’s professional sheen masked a business that operated for borrowers more like an old-school loan-sharking operation. The company lent money at high interest rates that on occasion hit 400%, the SEC has claimed.

And LaForte, whose grandfather was named by federal prosecutors in past congressional testimony as a capo for the Gambino crime family in New York, personally threatened some borrowers who fell behind, Ortiz said.

He allegedly told one small business owner that he would “blow up your house.” He purportedly asking another if she “had ever heard of cement shoes” and warned her her that is she didn’t pay up, she would start her car and “go poof.”

When those threats weren’t enough, several witnesses referenced in government filings said, a “large muscular man” would appear at their workplace to threaten them with physical harm.

LaForte’s lawyers dismissed any claims of violent and threatening behavior Tuesday as lies made up by deadbeat borrowers. Local authorities had investigated each allegation and found them groundless, Froccaro said.

Nevertheless, the claims helped to secure search warrants for several offices in Philadelphia for his business and properties owned by LaForte, including his $2.4 million home in Lower Merion, a $2 million vacation home on Lake Wallenpaupack, outside Scranton, and a $5.8 million on the Florida coast.

They also discovered the seven loaded guns — including an AR-15 under his bed and handguns in each drawer of his nightstand and in a desk in a first-floor office — in the Delaware County home. As a convicted felon, it is a crime for him to own firearms.

Frocarro argued Tuesday that the weapons belonged to LaForte’s wife, Lisa McElone, 41, a licensed gun owner who is also a defendant in the SEC suit.

But again, LaForte’s earlier conversations with undercover FBI agents undermined those claims. In conversation, LaForte allegedly bragged to the agents of a small arsenal he kept in a dedicated room at his lake house and invited them to visit and go shooting with him.

“We’ve got everything,” he allegedly said. “AR-15s. We’ve got sawed off shotguns, rifles. We’ve got, I don’t know, what do you want?”

Two weeks later, they showed up at his house to arrest him.


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