Joseph LaForte, an operator of a fraudulent investment scheme in Philadelphia, PA, was sentenced to 15 and a half years in prison on March 26 for defrauding investors, conspiring to defraud the IRS, filing false tax returns, employment tax fraud, wire fraud, and other charges.
Additionally, LaForte was ordered to forfeit various assets, including a private jet and an investment account worth approximately $20 million. He also received a $120 million forfeiture money judgment, was required to pay $314 million in restitution, and was fined $50,000.
Court documents reveal that LaForte, president and CEO of Complete Business Solutions Group Inc., also known as Par Funding, led a scheme to defraud investors from 2015 to 2020. During that time, Par Funding attracted investors by lying about aspects of its operations, including its financial performance. In total, LaForte caused an actual loss to investors exceeding $288 million.
LaForte also committed multiple tax crimes using his fraudulent proceeds. He diverted approximately $20 million in taxable income from Par Funding to another entity controlled by him and nominally owned by someone else. They then filed false tax returns that did not report this income. Additionally, LaForte received over $9 million in cash kickbacks from a customer of Par Funding and did not report this income to the IRS on his tax returns, making his individual tax returns for 2016 through 2018 false.
LaForte also paid off-the-books cash wages to some employees of Par Funding, failing to report these wages to the IRS and not paying employment taxes on them. The total federal tax loss from LaForte’s crimes exceeds $8 million. Furthermore, he caused a $1.6 million state tax loss to the Pennsylvania Department of Revenue by falsely claiming that he and his wife were Florida residents from 2013 to 2019, while they actually lived in Pennsylvania.
The case was investigated by the IRS Criminal Investigation, the FBI, and the FDIC Office of Inspector General.
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