A former official with a Pennsylvania company has pleaded guilty to what authorities say was a scheme to bilk investors, according to InsuranceNewsNet.
65-year-old Perry Abbonizio of Collegeville appeared in federal court last week to enter the plea to a conspiracy charge. Abbonizio was a managing partner with Par Funding, a Philadelphia-based business lender.
The Securities and Exchange Commission has determined that Par Funding raised almost $500 million between 2016 and 2021 by misleading hundreds of investors about its business with false statements. The company granted high-interest loans to small businesses that led to high loan defaults, the SEC said.
It is alleged that Abbonizio and other company executives understated the risk of investing in Par Funding, claiming falsely that its loans were carefully underwritten and insured when in fact many of the loans were uncollectible.
Abbonizio could receive up to five years in prison when he is sentenced. As part of his plea arrangement, he has agreed to cooperate with federal authorities in their ongoing investigation. Prosecutors said three other executives with Par Funding conspired with Abbonizio to defraud investors and evidence is still being presented to a grand jury. Over 100 Par Funding investors have also filed lawsuits against the company to recover money they lost through the fraud.
Abbonizio previously reached a settlement with the SEC to forfeit $1.7 million and relinquish property worth $11.3 million.
Securities fraud takes on many forms. Investors incur losses when companies, corporate insiders, hedge funds, private placement issuers, financial advisors and other financial professionals make false or misleading statements or fail to disclose material information. Other times, they promise unrealistic high returns or perpetrate fraud through the misuse or misappropriation of investment funds. The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact us at (844) 651-2642 or through our online contact form for a no-cost evaluation of your matter.