Lawyers for Par Funding — the Philadelphia finance company said to be at the center of a massive fraud — told a federal judge Friday that the U.S. Securities and Exchange Commission was endangering investors, not protecting them, by pressing a sweeping civil fraud case against the firm.

And an attorney for Montgomery County financial adviser Dean Vagnozzi, well known in the area from his heavy advertising, said Vagnozzi had committed nothing more than “puffery” in how he sells investments and might even be “one of the biggest victims” in the case. Vagnozzi had helped find investors for Par Funding.

But Amy Riggle Berlin, the SEC’s senior trial counsel in the case, dismissed all that, lumping the owners of Par Funding, Vagnozzi, and other lawsuit defendants together as “liars” who gulled investors into sinking nearly $500 million into an untrustworthy investment.

Earlier in the week, Berlin had told the federal judge in Miami presiding over the lawsuit how Par Funding had suppressed an auditor’s report showing that the operation was losing money.

On Friday, she elaborated on that same report, saying that it showed that the firm’s 2017 loss of nearly $7 million was driven by the fact that Par Funding had siphoned off $33 million in “consulting fees” to themselves. The firm “has not recorded an audit since then,” she added.

While an audience of 250 watched on Zoom -- many anxious investors, according to the comments -- Berlin and the defense attorneys argued before U.S. District Judge Rodolfo Ruiz over whether he should make permanent his order putting a receiver in charge of Par Funding and Vagnozzi’s operation until the case comes to trial. Ruiz has also let the receiver lock out Par Funding’s 70-person staff.

The SEC wants the judge’s temporary restraining order, or TRO, made permanent. The defense wants it lifted. The judge said he will rule by Sept. 4.

Bettina Schein, an attorney for Joseph Cole Barleta, Par Funding’s chief financial officer, said the SEC was doing more harm than good and acting upon misinformation.

“The injunction request is flawed and should be denied,” Schein said. Par Funding “was a robust, thriving business prior to the TRO. The SEC’s flawed assertions are no substitute for facts.”

Vagnozzi ‘s lawyer, Brian Miller, said his client had relied on what he heard from Par Funding, just as the investors did. Like them, Miller said, Vagnozzi would be a victim “if there was any wrongdoing at Par Funding.”

Since the judge imposed a freeze on his assets and put a receiver in control of his business, A Better Financial Plan, Vagnozzi’s “life really has been turned upside down,” Miller said.

“Dean Vagnozzi is not a part of Par Funding. He was never employed there,” Miller stressed. “No ownership. No firsthand knowledge of the business.”

The SEC’s Berlin, however, said Vagnozzi shared the blame with Par Funding executives and others because he was the top salesperson for the firm. He also was part of a group that led investors to believe that their money was protected by insurance coverage when they had none, she said.

She also unveiled an SEC analysis showing that a trust controlled by Par Funding’s owners had spent $55 million to buy 21 pieces of real estate in Center City, suburban Philadelphia, the Poconos, and Florida, as well as other locations, over the past four years. The owners’ lawyers replied that there was nothing illegal about that.

Defense lawyers have stressed that Par Funding, founded in 2011 after one of its owners completed prison terms for two white-collar crimes, has year after year made all required payments to investors. For her part, Berlin focused on the fact that the streak ended this year when the firm suspended two monthly payments.

The firm took in millions from investors, paying them 10% or more in interest, and then lent out the money as cash advances to smaller merchants, charging average interest of 50%, the SEC has said.

Par and Vagnozzi say that the coronavirus caused many merchants to fall behind in payments in 2020. But Berlin said many of the firm’s clients were already behind in their payments. She said COVID-19 was an excuse for a business model that wasn’t working.

In interviews after the end of the eight-hour hearing, two investors who had watched it on Zoom were left with differing takeaways.

Bonnie Beeman, a Seattle resident, said she had hoped Judge Ruiz would “order the receiver to quickly return the entire principal for any investor who wants out.” For years, a selling point for Par Funding was that it permitted investors to reclaim their principal after a year, but it abandoned the pledge this year.

In her view, testimony had showed “they had ample funds to repay me, but chose not to.”

However, Philadelphia investor Thomas Chaves, who has put money into a series of Vagnozzi-recommended funds, said defense attorneys had put on a strong case. He said Par Funding employees should be put back on the job, a step he said would lead to a resumption of payments to investors.