HAVERFORD, Pa. (CBS) — Federal investigators are clamping down on cash advance companies targeting small businesses during the pandemic.
Authorities say Joseph LaForte, of Haverford, used to run a cash advance company called Par Funding out of an Old City office. It was raided by the FBI last month.
A video posted on LaForte’s Vimeo page shows just how easy it is for small businesses to get a cash advance.
“Getting funds doesn’t have to be so complicated,” the promotional video says.“Your credit score doesn’t matter.”
But the U.S. Securities and Exchange Commission is now suing Par Funding, alleging small businesses borrowed money from it with extraordinarily high interest rates.
“Once I dug into it, I was amazed at what was going on,” said attorney Shane Heskin.
Based in Center City, Heskin represents borrowers in New Jersey and Pennsylvania, like Annie’s Pooch Pops. It’s a Northampton County company that sells pet food at festivals and had a loan with Par Funding.
But Pooch Pops was not able to do much business during the pandemic and its manager says he was threatened after the company couldn’t repay money to Par Funding.
“It was ‘figure out how to pay us or else.’ You know, ‘We’ll take your business from you, we’ll come after your house, you signed personal guarantees.’ It was a litany of threats,” said the company’s manager, Bryan Hartig.
LaForte has not been criminally charged for those allegations. But last month, federal authorities found several guns at LaForte’s Haverford home.
As a twice-convicted felon, the feds say he’s not allowed to possess any guns.
LaForte’s attorney argued the guns belong to his wife and today LaForte pleaded not guilty to those gun charges. He was ordered to remain in jail until trial.