A former Par Funding financial executive was sentenced to six months in prison for helping perpetuate the massive fraud

A former top official at a now-defunct Philadelphia-based lending company was sentenced Tuesday to six months in prison — followed by a year of home detention — for helping defraud hundreds of investors out of millions of dollars by concealing the firm’s perilous financial situation and making false promises of lucrative returns.

Perry Abbonizio, 67, was a Montgomery County securities broker who in 2016 became a principal at Par Funding. And prosecutors said he played a key role as the cash-advance business experienced significant growth over the next four years — providing a “charming and legitimizing public face” for an unprofitable, fraudulent firm that was founded and being secretly run by Joseph LaForte, a felon.

Abbonizio, prosecutors said, knew that LaForte was legally barred from selling securities because of his crimes. And he knew that Par’s insurance policy was insufficient, and that the default rate on the loans it gave out was significantly higher than it publicly claimed.

But Abbonizio concealed that information from potential investors as he and others at Par sought to raise huge amounts of capital to keep the business running. And his tactics were successful, prosecutors said: In the four years before Abbonizio joined the firm, it raised $10 million. But during the next four years, he helped it raise more than $500 million.

Still, prosecutors said Abbonizio was not aware of all aspects of the crimes committed by others at the firm. And he was not accused of some of its more brazen offenses, including having employees resort to loan shark-style tactics to collect debts or threaten to kill borrowers who fell into default.

He also was the first Par executive to plead guilty and agree to cooperate with prosecutors as they built a criminal case against company leaders.

And that decision came at a cost, prosecutors said: Shortly afterward, Abbonizio received an anonymous phone call in which the caller threatened to harm his adult daughters if he didn’t “retract those lies.”

Abbonizio said Tuesday that he was “overcome by and sorry for” the stress and consequences he caused for investors and his family.

“I take full and honest responsibility for my poor judgment above all else,” he said. “I wish I had done a better job of inserting myself into the inner workings of the company.”

U.S. District Judge Mark Kearney said he didn’t understand how a man with Abbonizio’s abilities and reputation could “disregard [his] better instincts and just turn a blind eye” to Par’s misdeeds.

“We cannot disregard the role that you played in creating this monster,” Kearney told him.

Par was founded in 2012 by LaForte to offer quick loans at high interest rates to borrowers deemed too risky to secure financing from traditional banks. In order to raise money it could lend out, the firm ran radio ads and staged elaborate solicitation events. And officials including Abbonizio portrayed the firm as unusually successful, sometimes promising yearly returns of 10% or more.

Behind the scenes, however, prosecutors said the business was a fraud. LaForte listed his wife, Lisa McElhone, as the company’s CEO to avoid scrutiny over his felony convictions connected to a real estate Ponzi scheme and an illegal offshore gambling operation.

And Par executives lied to investors about key financial metrics, including its profitability and default rate. By 2020, prosecutors said, the business was operating, in effect, as a Ponzi scheme, with yearly deficits as high as $70 million — while executives scrambled for infusions of cash to simply pay off its ongoing losses.

Abbonizio’s attorneys said he wasn’t aware of the scale of those problems. But while serving as one of Par’s key fundraisers, he did help conceal LaForte’s criminal background, and lied about the business’ shaky insurance policy and default rate.

Prosecutors also said Abbonizio’s professional background and personality — as a smooth-talking financial executive with a wide network of wealthy contacts — helped the beleaguered business survive much longer than it should have.

“But for Perry Abbonizio’s bona fides, his network, his polish, LaForte wouldn’t have gotten in the door,” Assistant U.S. Attorney Samuel Dalke said.

The conspiracy began falling apart in 2020 when Par was unable to pay investors’ monthly dividends. Abbonizio went on to cooperate with probes by the Securities and Exchange Commission and the U.S. Attorney’s Office in Philadelphia, his lawyers said. And he was the first to plead guilty in criminal court in 2023.

Par was ultimately put under the control of a court-appointed receiver, and most of its key players have pleaded guilty to crimes including conspiracy, extortion, and wire fraud. Nearly all have since been sentenced, including LaForte, who in March was ordered to serve 15½ years behind bars.

Kearney, the judge who has sentenced each of them, told Abbonizio that his role in the company turned “a low-level scam” into a behemoth.

“You have so many talents and you … used your considerable talent to defraud thousands of people,” Kearney said. “And it all crashed.”