More than 50 investors in funds sold by financial adviser Dean Vagnozzi have filed a federal lawsuit alleging fraud and conspiracy violations against him and his longtime Philadelphia lawyer, John Pauciulo.

The suit seeks damages from Vagnozzi and his staff in King of Prussia, Pauciulo and his firm, numerous funds they set up to accept money from investors, and Coventry First, an area company that is the nation’s largest purchaser of life-insurance policies as an investment vehicle, including some used in funds established by Vagnozzi and Pauciulo.

The 55 people filing suit invested a total of $14 million. Their lawsuit bring claims under the federal Racketeer Influenced and Corrupt Organizations Act, a legal step that means successful plaintiffs could be awarded triple damages, though such RICO claims often fail in the courts.

The lawsuit, filed in federal court in Philadelphia on Friday, in large part mirrors accusations from a July civil fraud lawsuit filed by the U.S. Securities and Exchange Commission against owners of Old City-based small-business lender Par Funding Inc., Vagnozzi, and others who sold investors funds backed by Par’s loans. The SEC took action after Par defaulted on investor payments.

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The new suit, like the SEC action before it, accuses Vagnozzi of failing to warn investors in Par Funding of risks. The SEC persuaded federal Judge Rodolfo Ruiz to put Par and Vagnozzi’s companies under a court-appointed receiver as it searched for investors' money.

Lawyers for the Par owners last week urged the judge to throw the complaint out, arguing that the SEC doesn’t understand its business and was failing to collect loans for investors.

Earlier this month Ruiz agreed to return to Vagnozzi control of his funds that were not invested in Par. At the same time, the judge issued an order under which Vagnozzi is to find a new administrator for those funds so investors can get money back.

The new suit adds allegations that Vagnozzi’s involvement with Par “has compromised” the non-Par investments, which include funds that invest in life insurance policies, lawsuits, medical-payment claims, and office buildings.

Vagnozzi’s advice, it said, had left investors in those funds with "dubious prospects of recouping their principal, let alone receiving the double-digit returns that [Vagnozzi] promised.”

And the suit accuses Pauciulo and his firm, Eckert Seamans Cherin & Mellott LLC, of playing key roles in enabling the alleged fraud by working closely with Vagnozzi to help induce investors to buy the funds, without properly warning of risks.

Vagnozzi sold more than $100 million worth of investments in Par Funding and other “merchant cash advance” lenders to investors. The firm promised them returns of up to 14 percent, then lent funds out as cash advances to small merchants, charging them effective interest rates of 50 percent or more.

He raised more than $70 million for the other funds.

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Vagnozzi, Pauciolo and their attorneys didn’t respond to requests for comment. Nor did the Coventry firm, based in Fort Washington, Montgomery County.

But in emails to investors on Friday, which were obtained by the Inquirer, Vagnozzi expressed optimism that payments to his non-Par investors, which stalled after the receivership was imposed last summer, could soon resume.

“The legal process will prove my innocence in due time,” Vagnozzi wrote, referring to the SEC civil suit.

This summer, the SEC, in a separate action, faulted Vagnozzi’s sales pitches for life settlements. As a result, he and one of his companies agreed to pay a $95,000 penalty to settle accusations that he sold $32 million in such funds to 339 investors without registering his products with the SEC as securities.

In all, Vagnozzi has agreed to pay more than $1 million since 2018 to resolve complaints from federal and state regulators. Under the settlements, Vagnozzi didn’t admit any wrongdoing.

» READ MORE: Fined $500,000 by SEC, Dean Vagnozzi keeps his insurance license, says he plans an IPO (From 2019)

The latest suit includes investors from a wide range of funds, according to Eric Lechtzin, a lawyer at Edelson Lechtzin LLP in Bucks County, which brought the suit with firms in Wilmington, Del., and Florida.

In an interview, Lechtzin agreed that back payments to investors in Vagnozzi’s Atrium and ProMed litigation-based funds, administered by Conshohocken-based Experity Ventures, could be paid and regular payments resume once a new administrator is in place.

But the life-settlement funds are more “problematic,” he added. He said he had not found any Pillar investors, back to the first Pillar fund in 2010, who say they have gotten their entire original investment back, let alone projected profits.

One of the funds’ policy suppliers, Texas-based Life Partners, went bankrupt in 2015. Earlier this year, Vagnozzi wrote to investors who had bought funds built upon the Texas company’s policies and acknowledged problems.

“The life expectancies were terrible,” he wrote.

“It goes without saying,” he said, “I apologize for how poorly this fund has performed.”

Coventry First replaced Life Partners as lead policy supplier. Even so, some more recent investors have also complained that policies have not paid off as expected.

The Edelson firm filed an earlier federal RICO lawsuit, Caputo vs. Vagnozzi, in Delaware last summer on behalf of a Pennsylvania couple who had invested in Par. That suit, solely focused on Par Funding investments, has been frozen until the SEC action is resolved. A third RICO lawsuit, which seeks class-action status, has also been filed in Florida.

Do the plaintiffs in the new suit, Melchior v. Vagnozzi, expect to collect more money by suing? “I don’t know if Vagnozzi has insurance,” Lechtzin said. “But Eckert Seamans certainly does.”