In an early win for federal regulators pursuing a sweeping fraud lawsuit, two financial salesmen named in the Par Funding case have dropped their opposition to putting key businesses into receivership and freezing their personal assets.
Perry S. Abbonizio, a Montgomery County financial consultant, specifically agreed in a court filing Thursday not to sell his estimated $6 million in real estate — his home in Collegeville and two luxury houses he bought last year in Stone Harbor and Avalon. He also agreed to leave untouched $1.7 million in his bank account.
The other to withdraw his opposition was Florida salesman, Michel C. Furman, according to the newly filed legal papers. Neither man could be reached for comment.
The freeze on sales and spending reflects a desire by the U.S. Securities and Exchange Commission to make sure that assets are not dissipated in case it wins a court case in the months ahead to force Abbonizio and others to repay investors.
Abbonizio is a part-owner of the Philadelphia firm Par Funding, the company at the center of what the SEC called “a web of unregistered fraudulent securities offerings” that took in nearly $500 million from 1,200 investors. The SEC last month won a temporary order from a judge putting a receiver in charge of Par Funding and other firms it worked with.
The agency’s lawsuit, brought on July 24 by SEC senior trial counsel Amie Riggle Berlin, says Par Funding and other firms and executives violated securities laws designed to protect investors, hid the risks of the financial products they sold, and kept secret the criminal past of another Par Funding owner.
That man, Joseph LaForte, is now in prison, awaiting a trial on criminal charges unrelated to the financial case. FBI agents, searching Par Funding offices and LaForte’s three homes last month, found seven firearms, which prosecutor say he was forbidden to possess because of his past felony convictions.
The SEC says Abbonzio and Furman were among the pitchmen who drummed up investment for Par Funding by misleading people about its operation. The firm took in money from investors, promising them returns of 10% or more, and then lent it out as cash advances to smaller merchants, charging them average interest of 50%, the SEC said.
While the men have dropped opposition to the asset freeze and receivership, other defendants are still fighting those moves in court.
The filings do not mean the two men will cooperate with the government. Both have been unwilling to speak with SEC lawyers, according to a recent hearing in the civil case. They can also link up with other defendants again to fight the SEC should the matter advance to a full civil trial.
.Abbonizio, 62, has worked as a financial adviser for 24 years. In 2015, public records show, he paid a $10,000 fine and underwent a four-month suspension from financial work after regulators said he violated rules by putting $625,000 from 10 customers of his employer into investments without telling the employer, Wells Fargo Advisers. He did not admit wrongdoing.
More recently, the SEC lawsuit says, Abbonizio assured Par Funding potential investors at one 2019 meeting in the Philadelphia suburbs that only 1 percent of its borrowers had failed to pay back their loans. Accountant Furman, 38, raising money in Florida, made a similar pitch.
In fact, the firm has filed 2,000 lawsuits targeting borrowers in arrears, the SEC said.
The agency says it caught Furman out in another lie last year. It said he told an undercover operative posing as an investor that New Jersey had “retracted” a state order that Par Funding should not sell its product in the state.