phillyflyers
- Joined
- Aug 8, 2024
- Messages
- 8,259
Dean Vagnozzi had an investment firm called A Better Financial Plan in King of Prussia, Pennsylvania. Just outside of Philly. He offered atypical type investments that were getting unheard of returns. He ran this company for close to two decades.
Over the years, he earned the reputation of being a very smart and trustworthy guy. He also made a lot of middle class people wealthy through his alternative investments.
Then he got involved with a company called Par Funding. You see, one day a man walked into his office and said he's got a company that he would like Dean to offer to his investors.
The company was called Par Funding. Now, Dean never met this guy before and didn't know who he was.
So, Dean being a smart guy, had his attorney check the company out. This attorney was John Pauciulo. Dean told John to do a deep dive on the company because he wanted to make sure it was a safe investment before he offered it to his investors.
Pauciulo ran the check and told Dean it was a good company. Dean decided to go ahead and offer it to his investors.
This is where the story gets bizarre.
Turns out Par Funding wasn't a healthy company at all. Par Funding offered small businesses high interest cash loans to businesses that couldn't get a loan from the banks and promised investors steady, high returns.
Par Funding would end up being, essentially, a ponzi scheme and that's when the SEC got involved. It's owner, Joseph LaForte, also had an extensive criminal background.
The SEC alleged that Dean and his company, ABFP, as well as others, misled investors, hid the criminal background of Par Funding's owner, LaForte, and failed to disclose the real risks and financial problems at Par Funding.
When the scheme collapsed in 2020, almost $500 million had been raised by over 1,200 investors but only a fraction of that money remained.
Dean, told the courts he didn't disclose the criminal background of Par Funding's owner because he was unaware of it himself, said that he instructed his attorney to do a deep dive in the company and his attorney told him it was clear.
But his attorney never did that deep dive and Dean wound up suing that attorney and the SEC fined Pauciulo $125,000 as a civil penalty for his role in the Par Funding scandal to which he also agreed to a cease-and-desist order and was barred from practicing before the SEC as an attorney, with the possibility to apply for reinstatement after five years. He was also forced to resign from his firm, Eckert Seamans Charin & Mellott as a result of his involvement with the scandal.
As for Dean, he agreed to pay $5 million to resolve the SEC's civil fraud claims for selling unregistered Par Funding securities.
In a separate SEC action related to the sale of unregistered securities and acting as an unregistered broker, Vagnozzi and his company, A Better Financial Plan, were ordered to pay about $600,000 in penalties and restitution.
Vagnozzi also accepted a one-year bar from associating with any broker, dealer, or investment adviser, and agreed to return shares he received in a related fraudulent venture.
These penalties were civil and not criminal and Dean has never once admitted to any wrongdoing and has consistently maintained his innocence.
An interesting side note to this story is that during the SEC trials, many of Dean's investors came to his defense saying that before Par Funding, Dean's investments were just as promised.
So, basically this man was stripped of the company he built, even though he may be innocent.
Another side note to this is that before Par Funding came along and ruined this man's life, his investments were generating 10%-14% ROI PER MONTH!
So if you invested 100k, he was getting you 10k a month back with the full principle returned at an agreed upon specific time.
He changed a lot of lives.
Sad to see.
Over the years, he earned the reputation of being a very smart and trustworthy guy. He also made a lot of middle class people wealthy through his alternative investments.
Then he got involved with a company called Par Funding. You see, one day a man walked into his office and said he's got a company that he would like Dean to offer to his investors.
The company was called Par Funding. Now, Dean never met this guy before and didn't know who he was.
So, Dean being a smart guy, had his attorney check the company out. This attorney was John Pauciulo. Dean told John to do a deep dive on the company because he wanted to make sure it was a safe investment before he offered it to his investors.
Pauciulo ran the check and told Dean it was a good company. Dean decided to go ahead and offer it to his investors.
This is where the story gets bizarre.
Turns out Par Funding wasn't a healthy company at all. Par Funding offered small businesses high interest cash loans to businesses that couldn't get a loan from the banks and promised investors steady, high returns.
Par Funding would end up being, essentially, a ponzi scheme and that's when the SEC got involved. It's owner, Joseph LaForte, also had an extensive criminal background.
The SEC alleged that Dean and his company, ABFP, as well as others, misled investors, hid the criminal background of Par Funding's owner, LaForte, and failed to disclose the real risks and financial problems at Par Funding.
When the scheme collapsed in 2020, almost $500 million had been raised by over 1,200 investors but only a fraction of that money remained.
Dean, told the courts he didn't disclose the criminal background of Par Funding's owner because he was unaware of it himself, said that he instructed his attorney to do a deep dive in the company and his attorney told him it was clear.
But his attorney never did that deep dive and Dean wound up suing that attorney and the SEC fined Pauciulo $125,000 as a civil penalty for his role in the Par Funding scandal to which he also agreed to a cease-and-desist order and was barred from practicing before the SEC as an attorney, with the possibility to apply for reinstatement after five years. He was also forced to resign from his firm, Eckert Seamans Charin & Mellott as a result of his involvement with the scandal.
As for Dean, he agreed to pay $5 million to resolve the SEC's civil fraud claims for selling unregistered Par Funding securities.
In a separate SEC action related to the sale of unregistered securities and acting as an unregistered broker, Vagnozzi and his company, A Better Financial Plan, were ordered to pay about $600,000 in penalties and restitution.
Vagnozzi also accepted a one-year bar from associating with any broker, dealer, or investment adviser, and agreed to return shares he received in a related fraudulent venture.
These penalties were civil and not criminal and Dean has never once admitted to any wrongdoing and has consistently maintained his innocence.
An interesting side note to this story is that during the SEC trials, many of Dean's investors came to his defense saying that before Par Funding, Dean's investments were just as promised.
So, basically this man was stripped of the company he built, even though he may be innocent.
Another side note to this is that before Par Funding came along and ruined this man's life, his investments were generating 10%-14% ROI PER MONTH!
So if you invested 100k, he was getting you 10k a month back with the full principle returned at an agreed upon specific time.
He changed a lot of lives.
Sad to see.
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