A bodybuilder and high-profile associate of New York’s Gambino crime family this week became the first defendant charged in a long-running criminal investigation into the business practices of one of the nation’s biggest cash advance lenders.
Renato “Gino” Gioe, 54, of Miramar, Fla., pleaded guilty on Tuesday to federal charges alleging he was the executor of Philadelphia-based Par Funding, which offered quick cash at rates of interest to help businesses overcome money problems.
But when borrowers couldn’t pay their debts, it was the well-muscled Gioe that the company sent to collect, using Mafia-style extortion tactics, including harassment and violent threats.
He threatened to “stick a fork” into one borrower’s head, prosecutors said, and warned another that he would chop off his hands if he didn’t pay. Threats against borrowers’ families were also common, according to court documents establishing a six-year pattern of conduct involving at least seven victims.
But the charges against Gioe — and his guilty plea on Tuesday — were also significant for what they revealed about the larger case that federal authorities have been pursuing against his employers since at least 2019.
Crowdfunding has quickly become a national name in the growing but increasingly controversial merchant cash advance industry, which circumvents traditional lending regulations such as interest rate caps by claiming that the money they give to borrowers is not a loan but an advance on future sales.
Critics say these loans are often designed to fail, allowing companies like Par Funding to profit more from defaulting customers than from those who repay their loans on time.
And despite the industry’s brilliance of professionalism, lawsuits against some of the most aggressive cash advance lenders paint their collection practices are nothing more than old-fashioned mafia loan sharks dressed in business suits.
Dozens of crowdfunding lawsuits describe he and its founder – Lower Merion resident Joseph LaForte, a convicted con man with a story of a multi-million dollar fraud – as one of the worst offenders.
READ MORE: Crowdfunding threatened violence and undermined reputation after companies took out loans at brutal interest rates, borrowers say
Charging documents in Gioe’s case describe him crossing the country to harass and threaten borrowers who fell behind on what they owed.
He admitted in court Tuesday to harassing a borrower — the owner of a Philadelphia hair salon chain who owed Par Funding more than $120,000 — for three years, stopping at his stores out of the blue and threatening to hurt him if he didn’t pay.
In 2018, he told another – the owner of a Los Angeles-based tech company – that failure to pay their debts could “make widows” and that one of the last people who didn’t pay in time had been involved in a suspicious car accident.
LaForte has previously dismissed allegations of such heavy-handed collection tactics as “absurd and blatantly untrue stories” of “disgruntled former clients” hoping to get rid of their debts.
But in 2019, the federal government took notice.
The following year, the U.S. Securities and Exchange Commission filed suit against the company, LaForte, his wife, and a network of associated firms and financial advisers, alleging they had defrauded investors while raising nearly $600 million to cover the loans it had made while minimizing its large number of borrower defaults. A federal judge in Florida has since placed the company in receivership.
The FBI raided the Old Town offices of Par Funding in 2020. Search warrants soon followed for LaForte’s home in Lower Merion.
And in August 2020, officers arrested LaForte for possession of seven firearms despite his criminal record.
While these charges are unrelated to his cash advance business, prosecutors have made no secret of the fact that they have mounted a larger criminal case against him and potentially others related to Par Funding’s business practices. .
At a bail hearing, they urged a federal judge to keep LaForte in custody pending his gun trial, citing threats Par and his employees had made against their clients.
And Gioe was indicted in a federal extortion case in New Jersey that summer – but which involved personal loans he made to a business owner in Toms River that were not directly related to his work for Par.
It was in that case, which remains unsolved, that prosecutors first identified Gioe as a Mafia associate — a claim he and his attorneys, Robert Caliendo and Christopher G. Furlong, have denied. .
Gioe suggested to Bloomberg in 2018 that the case stemmed from prejudice against Italian Americans.
He and his attorneys did not respond to requests for comment on the Philadelphia charges uncovered this week.
The details of his guilty plea and agreement with the government remain under court seal; it is unclear whether Gioe has agreed to cooperate or potentially testify in the larger investigation.
But the charging documents in the case suggest another legal danger for LaForte.
Although not mentioned by name, the documents indicate that all threats made by Gioe were carried out under the orders of a crowdfunding owner who fits LaForte’s description.
In a 2018 incident described in court documents, Gioe had LaForte on speakerphone as he threatened the owner of a Miami-based real estate firm that owed Par Funding more than $4.1 million.
After Gioe took the man’s Rolex watch as an appeasement gift, the owner sent LaForte a text begging him to “please call the dogs…and by that, I mean this animal that you sent here”.
Shane Heskin, a Philadelphia-based attorney who began representing several former Par Funding borrowers after Gioe came forward to collect the business from his stepfather, hailed the man’s guilty plea this week as a step forward in solving what he described as Par Funding. pattern of predatory practices.
“It’s this kind of behavior that made me so passionate about getting into this area of the law and fighting these violent and threatening collecting habits,” he said. “Hopefully this will act as a deterrent to this type of behavior.”