IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-CV-81205-RAR

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

v.

COMPLETE BUSINESS SOLUTIONS

GROUP, INC. d/b/a PAR FUNDING, et al.,

Defendants.

______________________________________/

RECEIVER’S MOTION FOR AN ORDER TO SHOW CAUSE WHY DEFENDANTS

JOSEPH LAFORTE AND LISA MCELHONE SHOULD NOT BE HELD IN CONTEMPT

AND TO LIFT LITIGATION INJUNCTION AGAINST SPECIFIED THIRD PARTIES 

Ryan K. Stumphauzer, Esq., Court-Appointed Receiver (“Receiver”) of the Receivership 

Entities, by and through his undersigned counsel, hereby seeks an Order to Show Cause Why 

Defendants Joseph LaForte (“LaForte”) and Lisa McElhone (“McElhone”) should not be held in 

contempt of court for diverting funds due and owing to the Receivership Estate1 using, among 

other means, shell corporations, nominee corporate officers, “check cashers,” and structured 

financial transactions. If the Court issues a contempt order against LaForte and McElhone, the 

Receiver will seek compensatory damages for funds diverted from CBSG and CFS, attorneys’ fees 

and costs associated with this motion and related recovery lawsuits, as well as a coercive daily fine 

until LaForte and McElhone comply with the Court’s contempt order.

1

 The Court signed the Order Appointing Receiver on July 27, 2020 [ECF No. 36, “Order 

Appointing Receiver”], and it became effective on July 28, 2020, when the Court issued its Order 

Granting Emergency Ex Parte Motion for Temporary Restraining Order and Other Relief [ECF 

No. 42, “TRO Order”). Complete Business Solutions Group, Inc. d/b/a Par Funding (“CBSG” or 

“Par Funding”) became a receivership entity at that time. For purposes of this motion, it is 

important to note that Contract Financing Solutions, Inc. (“CFS”) was not added to the 

Receivership until May 5, 2021 [ECF No. 579].

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The Receiver also seeks an order authorizing him to initiate litigation against various 

individuals and entities that assisted LaForte and McElhone in executing the diversion scheme, or 

that received proceeds from the diversion scheme, including James LaForte, Jr. (a/k/a “Jimmy 

LaForte,” a/k/a “Jimmy McElhone,” a/k/a “Jimmy Schillaci”), Tina LaForte, Sage Choi LaForte, 

Jamie McElhone, Francis L. Scarpati (a/k/a “Frank Scarpati”), Peter Padovano, Vincent Bardong, 

Marc Roddini, Justin Scavetti, John R. Mulvihill, III, Alan Redmond, Platinum Rapid Funding

Group, Ltd., Financial Mutual, Inc., Total Business Strategies, LLC, Straight Line Source, Inc., 

BG Sky Trade LLC, Bene Market LLC, Mac Mrktng, LLC (a/k/a Mac Marketing), F and N 

Consulting, Inc., and Bushwick Beer Garden LLC (a/k/a Bushwick BG LLC).

I. Individuals and Business Entities Involved in the Merchant Collection Diversion 

Scheme

a. CFS was a merchant cash advance business that operated from the same business 

addresses as Par Funding, hosted data on Par Funding’s G-Suite, and acted as a 

syndicate for Par Funding. In other words, Par Funding sold, transferred, or 

otherwise shared a percentage of its merchant cash advance agreements with CFS. 

Defendant Joseph Cole often signed merchant cash advance agreements on behalf 

of CFS, while Defendant Lisa McElhone would countersign on behalf of Par 

Funding. As of December 31, 2019, the total amount of funds transferred from Par 

Funding to CFS was $13,143,014.68, and the total amount CFS repaid to Par 

Funding was $9,657,088.81. According to her own personal financial statement, 

Lisa McElhone, through her trust, The LME 2017 Family Trust, owns CFS. [ECF 

No. 560, Ex. 2]. The Receiver explained the alter ego relationship between CFS 

and Par Funding, and attached evidentiary proof of that relationship, in a previous 

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Motion to Expand [See ECF No. 560], which was granted on May 5, 2021 [See

ECF No. 579]. 

b. Platinum Rapid Funding Group, Ltd. (“Platinum Rapid”) is a New York business 

entity purporting to operate as a merchant cash advance company. After this 

receivership was established, Platinum Rapid collected at least $1.15 million from 

at least 86 of CFS’ merchants, and transferred approximately $1.8 million to 

Financial Mutual, Inc., discussed infra, between August 2020 and August 2021.

c. Straight Line Source, Inc. (“Straight Line Source”) is a New York business entity 

that purports to be a premier provider of financial products for small businesses that 

are unable to receive working capital through conventional lending institutions to 

finance the continued growth of their business. Straight Line Source transferred 

approximately $77,000 to Financial Mutual between February 2021 and January 

2022.

d. Vincent Bardong purports to be the President of Platinum Rapid. [See Exh. 2, 

Bardong LinkedIn Page Excerpt] and, in multiple lawsuits, has been identified as 

the President of Straight Line Source. See, e.g., Brandon Callier v. Straight Line 

Source, Inc., Case No. 20-cv-0282, United States District Court for the Western 

District of Texas. Mr. Bardong also pledged his residence in Lackawaxen 

Township, Pennsylvania to secure Defendant Joseph LaForte’s release on bond on 

federal firearm charges in the matter styed United States v. Joseph LaForte, Case 

No. 20-231-CR, United States District Court for the Eastern District of 

Pennsylvania. [See Exh. 1, Court Order].

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e. Financial Mutual, Inc. (“Financial Mutual”) is a Wyoming corporation that was 

formed on March 15, 2019, and its registered address is 1712 Pioneer Ave, 

Cheyenne, WY 82001. That street address is also used by Capital Administrations 

LLC, the company that incorporated Financial Mutual. 

f. Total Business Strategies, LLC was a Wyoming corporation that was formed in 

May 2008 and dissolved in July 2021. Its registered address was 1712 Pioneer Ave, 

Cheyenne, WY, 82001. That street address is also used by Wyoming Corporate 

Services, Inc., the company that incorporated Total Business Strategies, LLC.

2 

Wyoming Corporate Services, Inc. utilizes the same email address as Capital 

Administrations, LLC, the company that incorporated Financial Mutual.

g. Francis Scarpati was the President of Financial Mutual and an authorized signor on 

Financial Mutual’s Bank of America account. Scarpati is an associate of Joseph 

LaForte, and previously served as the Director of Credit at Fast Advance Funding, 

2

 Wyoming Corporate Services, Inc. has garnered significant media attention, as has the two-story 

building where it and Capital Administrations LLC are co-located, 1712 Pioneer Avenue, 

Cheyenne, Wyoming. Indeed, some news articles have coined Cheyenne, Wyoming “as the Little 

Cayman Island of the Great Plains” because it is a hub for so-called “shelf” companies. As 

described in a Reuters article, shelf companies are established years prior, “then left ‘on the shelf’

to season for years,” and then “sold later to owners” who want a company with “years of regulatory 

filings behind it, lending a greater feeling of solidity.” See Shell Games, a Reuters Investigation, 

Special Report, a Little House of Secrets on the Great Plains, available at

https://www.reuters.com/article/oukwd-uk-usa-shell-companies-idAFTRE75R22L20110628 (last 

visited July 28, 2022). Extensive text and email correspondence between Defendant LaForte, an 

accountant, and other individuals demonstrate that LaForte often used Wyoming to register 

businesses he controlled, either directly or indirectly. Other companies registered in Wyoming 

include Eagle Six Consultants, Inc., Kingdom Logistics, LLC, Kingdom Energy Group, LLC, 

United Communications, LLC, and Millennium Holding Limited LLC. 

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an affiliate of CBSG and now a receivership entity, and the Director of 

Underwriting at Fairmount Funding, also an affiliate of Par Funding.

3

 

h. Peter Padovano was also an authorized signor for the Financial Mutual bank 

account at Bank of America. Like Mr. Bardong, Peter Padovano pledged his

residence in Staten Island, New York to secure Joseph LaForte’s release on bond 

on federal firearm charges in the matter styed United States v. Joseph LaForte, Case 

No. 20-231-CR, United States District Court for the Eastern District of 

Pennsylvania. [See Exh. 1, Court Order].

i. National Brokers of America, Inc. (“National Brokers, Inc.”) is an Ohio business 

entity with a principal place of business of 354 Penn Street, Reading, PA, 19602. 

National Brokers, Inc. purportedly operated a private health insurance center that 

solicited individuals through direct marketing. On or about September 3, 2019, 

National Brokers, Inc. filed a voluntary petition under Chapter 7 of the Bankruptcy 

Code in the United States Bankruptcy Court for the Eastern District of Pennsylvania 

at Case No. 19-15488-pmm. In its bankruptcy filings, National Brokers, Inc. did 

not list Par Funding or its affiliates as known or suspected creditors.

j. National Brokers of America, LLC (“National Brokers, LLC”) lacks a known 

corporate registration, but used the same federal employer identification as

National Brokers, Inc. National Brokers, LLC entered into more than sixty (60) 

merchant cash advance agreements with Par Funding and accumulated a balance of 

$35,293,618, making it the second largest “exception portfolio” merchant. 

3 In an email dated August 14, 2018, Joe Cole provided Joseph LaForte and Jimmy LaForte with 

a “New Company Projection” for Fairmount, indicating that this new affiliated MCA company 

would be deploying “$80M in new capital.”

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k. Bene Market, LLC (“Bene Market”) is a Delaware business entity organized on 

May 25, 2016, that registered to do business in Pennsylvania on August 16, 2019. 

Bene Market purportedly operated a private health insurance enrollment center that 

solicited individuals through direct marketing. Bene Market used the same physical 

address as National Brokers, LLC, and used the same federal employer 

identification number as National Brokers, Inc. The U.S. Department of Labor 

filed a lawsuit against Bene Market, LLC, National Brokers of America, Inc., Alan 

Redmond, and others on August 31, 2020. In that lawsuit, the DOL alleged: 

Defendant National Brokers was engaged in health 

insurance sales . . . until it ceased operations in 2018. At the 

time Defendant National Brokers ceased operations, 

Defendant Bene Market assumed control over all of the 

employees and business operations of Defendant National 

Brokers . . . Defendant Bene Market is a successor in interest 

to Defendant National Brokers, and is liable for the conduct 

of National Brokers both directly as part of a single 

enterprise and as a successor in interest. 

See Dep’t of Labor v. Bene Market LLC, et al., United States District Court for the 

Eastern District of Pennsylvania Case No. 20-cv-04265, ECF No. 1, ¶8. The alterego relationship between National Brokers, Inc.; National Brokers, LLC; and Bene 

Market was previously described in the Receiver’s Motion to Lift the Litigation 

Injunction to Allow Commencement of Proceedings Against National Brokers of 

America, Inc.; National Brokers of America, LLC; Bene Market, LLC and Alan 

Redmond. [ECF No. 584]. Bene Market was also a party to several merchant cash 

advance agreements with CBSG, including being designated as a “D/B/A” on 

agreements executed by National Brokers, LLC.

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l. Alan Redmond (“Redmond”) is an adult individual with a principal business 

address of 4 S. 4th Street, Reading, PA 19605, and holds himself out as the 

President, Chief Executive Office and/or owner of National Brokers, Inc. and/or its 

alter ago, National Brokers, LLC, and of its successor in interest, Bene Market. 

m. Mac Mrktng, LLC (a/k/a Mac Marketing) is a Delaware limited liability company. 

Jamie McElhone, the sister of Defendant Lisa McElhone and sister-in-law of 

Defendant Joseph LaForte, was the sole member of Mac Mrktng, and purportedly 

used the company for marketing and consulting services.

n. F and N Consulting, Inc. is a New York business entity purportedly doing business 

at 79 Glenwood Avenue, Staten Island, New York, a property address that is

associated with Frank Scarpati. As explained above, Scarpati is also the President 

of Financial Mutual and was formerly associated with Fast Advance Funding and 

Fairmount Funding.

o. BG Sky Trade, LLC is a Florida entity purportedly doing business at 330 SW 2nd

Avenue, Suite 213, Fort Lauderdale Florida, 33312. 

p. John R. Mulvihill, III was the sole manager identified in the Articles of

Organization for BG Sky Trade, LLC, and formerly worked for CBSG under 

Jimmy LaForte.

q. Bushwick Beer Garden LLC a/k/a Bushwick BG LLC (“Bushwick”) is a New York 

business entity formed in January 2020 that maintained bank accounts at BCB

Community Bank.4 Vincent Minsquero wrote an undated letter to BCB

4 Bushwick BG LLC filed its Articles of Organization on January 10, 2020, and Bushwick Beer 

Garden LLC filed its Articles of Organization on January 13, 2020. Although they are registered 

as different legal entities, these two related companies used each other’s names interchangeably in 

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Community Bank to remove his name from the bank accounts of Bushwick BG 

LLC and to give sole signature authority to “James LaForte.” [See Ex. 3]. Sage 

LaForte, a relative of defendant LaForte and James LaForte, Jr., also sent an email 

to BCB Community Bank, attaching a copy of James LaForte, Jr.’s driver’s license

on May 3, 2021, so that James LaForte, Jr. could assume control of the Bushwick

bank account. [See Ex. 4]. Bushwick received $715,838 of funds from Financial 

Mutual. The Receiver has confessed judgment in the amount of $135,308.63

against Bushwick Beer Garden LLC due to its default on a promissory note with 

Receivership Entity Eagle Six Consultants, Inc. Stumphauzer v. Bushwick Beer 

Garden LLC, No. 210902523 (CCP Phila.).

r. Vincent Minsquero was the principal and sole member of both Bushwick entities. 

Like Bardong and Padovano, Minsquero also posted his personal residence on 

Staten Island to secure Joseph LaForte’s release on bond on federal firearm charges 

in the matter styed United States v. Joseph LaForte, Case No. 20-231-CR, United 

States District Court for the Eastern District of Pennsylvania. [See Exh. 1, Court 

Order]. Minsquero also received a check for more than $25,000 from Financial 

Mutual and withdrew $49,800 of cash from Bushwick. 

s. James LaForte, Jr. is the brother of Defendant Joseph LaForte. James LaForte, Jr., 

together with his brother, Defendant Joseph LaForte, was previously convicted in 

the State of New York of multiple counts of grand larceny, money laundering and 

conspiracy in connection with a $14 million real estate scheme. James LaForte, Jr. 

various business transactions, and each received funds from Financial Mutual as part of the 

diversion scheme described in this motion.

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was also previously convicted in the U.S. District Court for the District of New 

Jersey for conspiracies to commit loansharking, extortion, and arson. 

t. Tina LaForte and Sage Choi LaForte (a/k/a Sage Boyle Choi), on knowledge and 

belief, are both relatives of Joseph LaForte and James LaForte, Jr. 

u. Marc Roddini is a resident of Staten Island, New York, and a personal associate of 

Joseph LaForte. In addition, he previously brokered MCA deals on behalf of and 

received commission payments from Recruiting and Marketing Resources Inc., an 

affiliate of Par Funding and currently included as one of the Receivership Entities.

Roddini cashed checks drawn on the account of Financial Mutual.

v. Justin Scavetti is a resident of Staten Island, New York, and cashed multiple checks 

drawn on the account of Financial Mutual. Justin Scavetti also co-signed two notes 

with Joseph Scavetti,

5 the President of Ticket Guru,6 evidencing loans from Eagle 

Six Consultants, Inc. [See Ex. 5]. Those loans were secured by Ticket Guru’s assets 

and a residential property that was jointly owned by Justin Scavetti and Joseph 

Scavetti. [See Ex. 6].

5 Joseph Scavetti and Anthony Zingarelli, often described as the right hand of Defendant Joseph 

LaForte, were charged together in Case No. 08-CR-00916(s)(4) in the Eastern District of New 

York for conspiracy to import marijuana, conspiracy to distribute marijuana, and money 

laundering, and both eventually pled guilty to conspiracy to distribute. Joseph Scavetti was also 

convicted is Case No. 97-CR-00279-ER for conspiracy to distribute methamphetamine and 

distribution of methamphetamine. 

6 In an October 2017, Anthony Zingarelli wrote an email to a website/design consultant for the 

purpose of setting up a website and email addresses for Ticket Guru, a purported merchant that 

owes $254,471 to CBSG and $2,899.501 to Eagle Six Consultants, Inc. In that email, Zingarelli

explained “we opened a new company called Ticket Guru,” and that “Joe would like this to happen 

right away[.]. I copied our new business partner Joe Scavetti on the email.” 

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II. THE SCHEME TO DIVERT RECEIVERSHIP ASSETS

For the last 22 months, the Collections Department at Par Funding has worked diligently

to collect outstanding merchant balances, despite pre-Receivership business conditions and the 

inevitable merchant intransigence that arose following the appointment of a Receiver. Similarly, 

the Receiver and his counsel, together with various consultants and private investigators working 

on their behalf, have conducted witness interviews, subpoenaed dozens of bank accounts, analyzed 

text messages and email correspondence, and conducted research using public sources and 

subscription databases to locate, collect, and recoup assets of the Receivership Entities. All the 

while, the Defendants loudly and persistently criticized the Receiver for his purported inability to 

collect on merchant accounts with due speed or diligence. 

Ironically, the Receiver has uncovered substantial evidence that Defendants LaForte and 

McElhone orchestrated a complex scheme to interfere with the Receiver’s collection efforts, to 

divert merchant collections from CBSG and CFS to other entities LaForte and McElhone 

controlled, to launder the diverted funds through shell and nominee corporations, and to use the 

laundered funds for their personal use and benefit, including the payment of their legal and expert 

witness fees in this case. The diversion scheme had multiple aspects and variations, but common 

patterns have emerged. In one variant of the scheme, unknown individuals contacted dozens of 

CFS’ merchants via telephone and email to explain that their merchant balances had been assigned 

to Platinum Rapid for collection. [Ex. 7]. In some instances, an individual purporting to be “T. 

Lane” or “Terry Lane” (who is believed to be a former Par Funding employee) would legitimize 

the demand by sending a formal letter on Platinum Rapid’s letterhead. [Id.] They did so without 

the Receiver’s knowledge or permission. Between July 2020 and July 2021, Platinum Rapid 

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collected at least $1.15 million from at least 86 of CFS’ merchants.

7

 Although some of these 

collections occurred before CFS was added to the receivership, the Receiver has already 

established that CFS was an alter ego of CBSG, and internal accounting records reflect that CBSG 

funded many of its MCAs.

In a second variant of the scheme, CFS’ merchants submitted payments using wire

instructions provided by a person purporting to act on behalf of Platinum Rapid, without realizing 

the wire instructions were for Financial Mutual’s account at Bank of America, and not an account 

of Platinum Rapid or CFS. [Ex. 8]. Financial Mutual is not one of the Receivership Entities, nor 

does the Receiver have access to, or control of, Financial Mutual’s bank accounts. To the contrary, 

only Francis Scarpati and Peter Padovano, both of whom are Joseph LaForte’s personal contacts, 

had access to that account [See Ex. 9], until they emptied and closed it on March 29, 2022

(approximately four weeks after the Receiver served a subpoena requesting information relating 

to deposits into Financial Mutual’s bank account) [Ex. 10].

After receiving the diverted merchant collections, Financial Mutual, in turn, made 

substantial payments totaling approximately $3 million to lawyers and accountants that were 

retained by Joseph LaForte, Lisa McElhone, The LME 2017 Family Trust, and Joseph Cole Barleta

to represent them in this litigation.

8

 Financial Mutual also made payments on James LaForte, Jr.’s 

7 Several of the financial figures in this motion are subject to change (i.e., to show that additional 

amounts were diverted from the Receivership Estate), as the Receiver has issued multiple 

subpoenas to obtain bank account records for parties and individuals believed to be involved in 

the scheme, including some of the entities named herein. In the event the Receiver identifies 

additional amounts that were diverted from the Receivership Estate through this scheme, the 

Receiver will file a supplement to this motion or a new motion addressing the additional conduct.

8 The Receiver is not suggesting that any of the attorneys or accountants for LaForte or McElhone

necessarily knew or should have known the source of the funds, or that they knew or should have 

known of the underlying diversion scheme. To the contrary, it appears the LaForte and McElhone

laundered the money through nominee companies, or by having checks cashed by relatives and 

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credit card, wrote checks to Jamie McElhone’s company, Mac Mrktng, and wrote checks to Dayne 

Property Management Group Inc. (a company that received merchant cash advances from Par 

Funding, and that Lisa McElhone used to pay property taxes for the residence she owns in Jupiter, 

Florida, after that property was included within the Receivership Estate). Finally, Financial 

Mutual issued countless checks to, or sent wires for the benefit of, James LaForte, Jr., Sage 

LaForte, Tina LaForte, Justin Scavetti, Peter Padovano, Marc Roddini, and Frank Scarpatti. Most 

of these checks were subsequently cashed at various Bank of America branches or check cashing 

stores, thereby making the proceeds virtually impossible to trace. [See Comp. Exhibit 11]. The 

checks issued by Financial Mutual typically did not bear an invoice number, purchase order 

number, product or service description, or any other notation that would be indicative of a 

legitimate business transaction; instead, the “description” field of the check was often left blank 

or contained a dubious description such as “baseball cards.” 

In a third variation of the scheme, Par Funding’s “exception portfolio” merchants,

including B&T Supplies, Inc.; Lifeguard Office Supplies, Inc.; and Bene Market (the successor in 

interest of National Brokers of America, Inc. and LLC) made payments directly to Financial 

Mutual. In other instances, the “exception portfolio” merchants made payments to BG Sky Trade,

which, in turn, made payments to Financial Mutual, the Defendants’ attorneys, Straight Line 

Source, F and N Consulting, Total Business Solutions, and LaForte family members (Sage 

LaForte, Tina LaForte, and others). John Mulvihill, who owned BG Sky Trade and controlled its 

bank account, executed these transactions at the behest and instruction of James LaForte, Jr. The 

friends that were loyal to LaForte and McElhone. The precise purpose of these machinations, it 

appears, was to conceal their actions from the Court, the Receiver, and possibly even the 

Defendants’ own attorneys and the forensic accounting firms working for them on this case. 

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charts below summarize payments that were diverted from CBSG’s “exception portfolio” 

merchants to Financial Mutual and BG Sky Trade:

Payments from B&T Supplies and Lifeguard Office 

Supplies Diverted from CBSG to BG Sky Trade

Date Amount

8/3/2020 $50,000

8/4/2020 150,000

8/5/2020 100,000

8/6/2020 50,000

8/7/2020 150,000

$500,000

Payments from Bene Market, the Successor in 

Interest of National Brokers of America, Diverted 

from CBSG to BG Sky Trade

Date Amount

8/11/2020 $100,000

8/18/2020 100,000

8/25/2020 50,000

8/31/2020 50,000

9/4/2020 50,000

9/11/2020 50,000

9/22/2020 50,000

10/8/2020 100,000

10/19/2020 50,000

10/27/2020 85,000

10/29/2020 50,000

11/5/2020 25,000

11/10/2020 50,000

11/17/2020 25,000

12/7/2020 50,000

12/14/2020 50,000

12/24/2020 50,000

1/4/2021 50,000

1/11/2021 50,000

$1,085,000

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Payments from Bene Market, the Successor in 

Interest of National Brokers of America, Diverted 

from CBSG to Financial Mutual

Date Amount

1/15/2021 $100,000

1/22/2021 59,000

1/22/2021 41,000

2/1/2021 51,000

2/3/2021 49,000

2/5/2021 100,000

2/16/2021 75,000

2/17/2021 75,000

2/18/2021 100,000

2/26/2021 100,000

3/8/2021 50,000

3/19/2021 100,000

3/25/2021 50,000

3/29/2021 50,000

3/30/2021 50,000

4/5/2021 50,000

5/3/2021 200,500

5/3/2021 149,500

5/18/2021 50,000

$1,500,000

Unlike the CFS merchants described in the preceding paragraph, there is no evidence that 

Par Funding’s “exception portfolio” merchants were deceived by unknown individuals or had been 

told their accounts were “assigned” to Platinum Rapid. To the contrary, the founder and owner of 

B&T Supplies and Lifeguard Office Supplies, Tzvi Odzer, provided the Receiver with an expert 

report in November 2021 for the precise purpose of documenting “side payments” to the LaForte 

brothers, often in cash, and it explicitly referenced payments to “BG Sky.” [See Composite Ex. 

12]. This complex web of rerouted payments through nominee-controlled or shell corporations

was, by careful and deliberate design, intended to obfuscate the money trail. Consequently, it took 

the Receiver months to subpoena merchants, subpoena and analyze bank account records, 

interview witnesses, and research the myriad shell companies and their nominee owners. 

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On June 7, 2021, the Receiver’s counsel posed a direct question to the Defendants

regarding the diversion of funds from CFS’ merchants to Platinum Rapid. The Defendants’ 

counsel denied any knowledge of the scheme, stating that “our clients do not know the reason the 

merchants paid Platinum and not CFS.” [See Composite Ex. 13]. It was only after the Receiver’s 

lengthy and involved investigation that he was able to confirm this was not a truthful response 

from LaForte and McElhone.

Likewise, Mr. Redmond, who has been engaged in ongoing communications and 

negotiations with the Receiver’s consulting firm, never mentioned that his alter-ego company,

Bene Market, was making massive payments to Financial Mutual or BG Sky Trade, all the while 

proclaiming that he and his companies were insolvent and therefore unable to repay the $35 million 

owed to the Receivership Estate and, by extension, the victim-investors in this matter. 

And Defendant LaForte, during the midst of this diversion scheme, represented to the Court 

on May 7, 2021: 

The Principal of B&T executed a surety that secures all of the 

corporate assets of his corporate and personal assets and permits 

confessions of judgment against B&T and Mr. Odzer individually. 

See Surety Agreement, attached as Exhibit B. Despite this, the 

Receiver has failed to exercise the surety and allowed B&T to simply 

fail to make payments to the Receivership Estate. In doing so, the 

Receiver has failed in his core function of collecting Par Funding’s 

receivables for the benefits of the investors. Moreover, the lack of 

collection has apparently allowed B&T to use the money it should 

have been paying to the Receivership Estate to instead acquire 

companies. See Apr 14, 2021 press release re B&T’s acquisition of 

85-year old New York City uniform company, OK Uniform. 

Moreover, in November of 2019, B&T entered into a partnership 

with the National Hockey League’s Las Vegas Golden Knights and 

purchased the naming rights to the Las Vegas Golden Knights’ 

community arena in Henderson, Nevada. See November 20, 4, 2019 

press release announcing partnership.

If certainly does appear that B&T is collectible. However, after nine 

months, the Receiver and his highly paid investigative team, is still 

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investigating the value of the security interest and has made no 

apparent effort to collect from B&T. 

[ECF No. 581, Joseph LaForte’s Response to the Receiver’s Quarterly Status Report Dated May 

3, 2021, and Exhibit 1 thereto, at pp. 9-10] (emphasis added). LaForte’s Response did not, 

however, explain that he and McElhone had diverted $500,000 of collections from B&T Supply 

and Lifeguard Office Supplies, and nearly $2.6 million from Bene Market, the successor in interest 

of National Brokers of America. Nor did the Defendants mention that they were using these

diverted funds to pay at least $3 million of fees to their lawyers and accountants in this case, and 

to pay approximately $1.9 million to family members and other nominee “check-cashers,”

including James LaForte, Jr., Tina LaForte, Sage LaForte, Tina LaForte, Mac Mrktng (Jamie 

McElhone’s company), Frank Scarpati, Peter Padovano, Marc Roddini and Justin Scavetti.

III. THE COURT HAS THE LEGAL AUTHORITY AND A SOUND FACTUAL 

BASIS TO ISSUE AN ORDER TO SHOW CAUSE WHY JOSEPH LAFORTE 

AND LISA MCELHONE SHOULD NOT BE HELD IN CIVIL CONTEMPT

a. Legal Standards for Civil Contempt

“[C]ourts have inherent power to enforce compliance with their lawful orders through civil 

contempt.” Spallone v. United States, 493 U.S. 265, 276 (1990). A party may initiate contempt 

proceedings by filing a motion requesting the court to issue an order to show cause why a party 

should not be held in civil contempt. Newman v. State of Alabama, 683 F.2d 1312, 1318 (11th 

Cir. 1982). “If the court finds that the conduct as alleged would violate the prior order, it enters 

an order requiring the defendant to show cause why [the party] should not be held in contempt and 

conducts a hearing on the matter.” Mercer v. Mitchell, 908 F.2d 763, 768 (11th Cir. 1990) 

(emphasis added); Wyatt ex rel. Rawlings v. Rogers, 92 F.3d 1074, 1078 (11th Cir.1996) (stating 

that the moving party need only allege facts, which if true, would support a contempt finding).

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In a civil contempt proceeding, the petitioning party bears the burden of establishing by 

clear and convincing evidence (1) that the allegedly violated order was lawful and unambiguous; 

(2) the contempt defendants had notice of the order; and (3) the contempt defendants violated the 

order. F.T.C. v. Levin, 618 F.3d 1221, 1232, 1235 (11th Cir. 2010). “The focus of the court's 

inquiry in civil contempt proceedings is not on the subjective beliefs or intent of the alleged 

contemnors in complying with the order, but whether in fact their conduct complied with the order 

at issue.” Howard Johnson Co. v. Khimani, 892 F.2d 1512, 1516 (11th Cir. 1990).

After the moving party makes this prima facie showing, “the burden of production shifts 

to the alleged contemnor to show a ‘present inability to comply that goes beyond a mere assertion 

of inability.’” PlayNation Play Systems, Inc. v. Velex Corporation, 939 F.3d 1205, 1212 (11th 

Cir. 2019) (citing Khimani, 892 F.2d at 1516). The moving party bears the ultimate burden of 

demonstrating that the contempt defendants had the ability to comply with the order. Levin, 618 

F.3d at 1332.

District courts have broad discretion in fashioning civil contempt sanctions. Khimani, 892 

F.2d at 1519 (citation omitted). If the court determines that a party is in contempt, the court has 

the option to impose sanctions for contumacious conduct, including the imposition of a “coercive 

daily fine, a compensatory fine, attorney’s fees and expenses to the Receiver, and coercive 

incarceration.” Citronelle-Mobile Gathering, Inc. v. Watkins, 943 F.2d 1297, 1304 (11th Cir. 

1991).

b. An Order to Show Cause is Warranted Based on the Facts Presented

There is sufficient evidence, as documented in this motion and the exhibits hereto, that the 

conduct, as alleged, constitutes a violation of the Order and the Amended Order. For the reasons 

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set forth below, the Court should enter an order for Defendants Joseph LaForte and Lisa McElhone 

to show cause why they should not be held in contempt.

c. The Court’s Orders are Valid and Lawfully Issued.

First, there can be no dispute that the Order and the Amended Order are valid and lawfully 

issued. See Section 22(a) of the Securities Act of 1933, 15 U.S.C. § 77v(a) (providing jurisdiction 

over suits in equity); Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa (same); 

28 U.S.C. § 3103 (setting forth the power of the Court to appoint a receiver in equity). The 

“appointment of a receiver is a well-established equitable remedy available to the SEC in its civil 

enforcement proceedings for injunctive relief,” and “the appointment of a temporary receiver is 

often a necessary ancillary form of relief in a SEC civil enforcement action for injunctive relief.” 

SEC v. First Financial Grp. of Texas, 645 F.2d 429, 438 (5th Cir. 1981).

IV. Two Things Are Emphatically Clear: (1) The Court’s Receivership Orders

(including the Asset Freeze), and (2) the Defendants’ Egregious and Numerous 

Violations of Them.

a. The Court’s Receivership Orders

 On July 27, 2020, this Court appointed the Receiver and vested him with “full and 

exclusive power, duty, and authority” to “take custody, control, and possession” of all 

Receivership property; to “administer and manage” such property, including through the use of 

third-party vendors; and to “marshal and safeguard all of the assets of the Receivership Entities.” 

(ECF No. 36, the “Order”) at 1-2 (emphasis added). Thereafter, on August 13, 2020, the Court 

entered an Amended Order Appointing Receiver with broad “asset freeze” language, as follows: 

all persons and entities with direct or indirect control over any Receivership Assets

and/or any Recoverable Assets, other than the Receiver, are hereby restrained and

enjoined from directly or indirectly transferring, setting off, receiving, changing,

selling, pledging, assigning, liquidating or otherwise disposing of or withdrawing

such assets. This freeze shall include, but not be limited to, Receivership Assets

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and/or Recoverable Assets that are on deposit with financial institutions such as

banks, brokerage firms and mutual funds.

(ECF No. 141, the “Amended Order”, ¶ 3). The Court further advised that anyone with notice of 

the Amended Order was “restrained and enjoined from directly or indirectly taking any action, or 

causing any action to be taken . . . which would . . . . [i]nterfere with the Receiver’s efforts to take

control, possession, or management of any Receivership Property,” “hinder, obstruct or otherwise

interfere with the Receiver in the performance of his duties,” or “[d]issipate or otherwise diminish

the value of any Receivership Property; such prohibited actions include but are not limited to,

releasing claims or disposing, transferring, exchanging, assigning or in any way conveying any

Receivership Property.” Id. at ¶29(a) to 29(c). 

The Amended Order stated further that “the Receivership Entities and all persons receiving 

notice of this Order,” including Defendants LaForte and McElhone, shall not “hinder or interfere 

with the Receiver’s efforts to take control or possession of the Receivership Entities’ property 

interests identified above, or hinder his efforts to preserve them.” Amended Order ¶ 9. The term 

“interference” includes as a meaning “[a]n obstruction or hindrance.” Interference, Black’s Law 

Dictionary (11th ed. 2019). “Hinder” means “to slow or make difficult; to hamper; to hold back; 

to impede, delay or prevent.” Id. No further language prohibiting access to the Receiver’s property 

was necessary to achieve this purpose.

The Court explained it was “tak[ing] exclusive jurisdiction and possession of the assets, of 

whatever kind and wherever situated, of” the Receivership Entities. Id. ¶ 1 (emphasis added). The 

Court further explained that “the appointment of a receiver in this action is necessary and

appropriate for the purposes of marshaling and preserving all assets of the Defendants

(‘Receivership Assets’) and those assets of the Relief Defendant that: (a) are attributable to funds

derived from investors or clients of the Defendants; (b) are held in constructive trust for the

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Defendants; and/or (c) may otherwise be includable as assets of the estates of the Defendants

(collectively, ‘Recoverable Assets’).” Id. at p. 1 (emphasis added). The Court therefore issued an 

asset freeze over the Receivership Assets and Recoverable Assets, and directed the Receiver to 

“take custody, control and possession of all Receivership Property . . . to sue for and collect,

recover, receive and take into possession from third parties all Receivership Property and records

relevant thereto.” Id. at ¶ 7(b). The Court reinforced that anyone with notice of the Amended 

Order:

was restrained and enjoined from directly or indirectly taking any action or causing 

any action to be taken, without the express written agreement of the Receiver, 

which would: 

A. Interfere with the Receiver’s efforts to take control, possession, or

management of any Receivership Property . . . 

B. Dissipate or otherwise diminish the value of any Receivership

Property; such prohibited actions include but are not limited to,

releasing claims or disposing, transferring, exchanging, assigning

or in any way conveying any Receivership Property . . . 

C. Interfere with or harass the Receiver, or interfere in any manner

with the exclusive jurisdiction of this Court over the Receivership

Estates . . . 

[ECF No. 141, ¶¶ 29A to 29C (emphasis added)]. 

As set forth in detail below, the Defendants have violated the Court’s orders hundreds of 

times, if not more, over the course of this receivership. Consequently, the Receiver is now 

compelled, pursuant to the Amended Order, to “promptly notify the Court and SEC counsel of

any failure or apparent failure of any person or entity to comply in any way with the terms of this

Order.” Id. at ¶ 31. 

Defendants LaForte and McElhone will most certainly argue that they collected CFS’ 

merchant balances before that entity was added to the Receivership Estate, but this argument 

should not give the Court any pause. First and most obviously, CBSG money was used to fund 

CFS’ merchant cash advances, and the Defendants were well-aware of this fact, as evidenced in 

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their own accounting records, which reflect a massive balance due from CFS to CBSG. As a result, 

any funds received from CFS merchants through this diversion scheme should have been paid back 

to CBSG. Second, once the Amended Order was entered on August 13, 2020, the accounts 

receivable of CFS (that Defendants LaForte and McElhone diverted) constituted either 

Receivership Assets or Recoverable Assets. Therefore, LaForte and McElhone violated the 

Amended Order by (i) diverting these funds, (ii) failing to transfer the diverted funds to the 

Receiver once CFS was added as a receivership entity, and (iii) failing to provide an accounting 

of these funds and turn over all records and documentation regarding this diversion scheme to the 

Receiver. Third, no matter when CFS was added to the receivership, neither LaForte nor 

McElhone has any possible justification for diverting funds from CBSG merchants, including B&T 

Supply, Lifeguard Office Supply, or National Brokers, Inc. a/k/a National Brokers, LLC a/k/a

Bene Market. These merchants alone owed a total of more than $126 million to Par Funding at 

the time the Court appointed the Receiver. Fourth, if the Defendants believed their conduct was 

justifiable, it is inexplicable why they went to such great lengths to conceal it by: (i) setting up 

Wyoming corporations for the purpose of making it more difficult to ascertain ownership and 

control, despite no business ties to Wyoming; (ii) collecting CFS debt using the name and 

letterhead of Platinum Rapid, and the bank account of Financial Mutual, instead of simply 

depositing money into CFS accounts that were the subject of an asset freeze, but not yet under the 

Receiver’s control; (iii) re-routing some of the money through BG Sky Trade or Bushwick, which 

had no involvement with these merchant balances; (iv) using straw “check cashers” to make the 

money untraceable; and (v) advising their attorneys they had no knowledge of the diversion 

scheme when the Receiver posed specific questions to them about CFS collections activity. 

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Nonetheless, if Defendants LaForte and McElhone attempt to defend their conduct despite 

the obvious, the Court should consider their explanations in light of: (i) their pre-Receivership 

efforts to collect cash from merchants, thereby keeping the money off of CBSG’s books and

unavailable to investors; (ii) the Defendants’ previous data breach, for which they already paid 

some of the Receiver’s fees to avoid a contempt hearing; and (iii) McElhone’s transfer of property

to Kingdom Logistics (which, in turn, transferred it to another entity, DEF Capital, in quick 

succession) after the Receivership Order and asset freeze were in place, allegedly based upon a 

misunderstanding of pre-Receivership contractual obligations. If LaForte and McElhone’s 

conduct is considered holistically, it is clear they have flouted this Court’s Orders, as evidenced

by their continuing efforts to “spin” the facts, all the while lining their pockets and paying their 

lawyers and forensic accountant to defend them in this case, through secret transactions.

b. LaForte and McElhone Violated the Court’s Unambiguous Orders by 

Diverting Funds that Lawfully Belonged to the Receivership Estate 

Finally, there is sufficient evidence that Defendants LaForte and McElhone violated the 

Order and the Amended Order in at least two discrete ways, including by: (i) taking action or 

causing any action, without the Receiver’s knowledge or permission, to interfere with the 

Receiver’s efforts to recover assets by collecting and diverting the merchant balances of Par 

Funding and CFS; and (ii) dissipating and diminishing the value of the merchant portfolio of the 

Receivership Entities by purportedly “assigning” merchant balances to conspirators and thirdparties, which, in turn, paid Defendants LaForte and McElhone, their accountants, their lawyers, 

and other parties LaForte and McElhone designated, including their relatives and credit card 

companies.

This motion, including the tables in Section II, infra, along with the attached exhibits, 

demonstrate that Defendants LaForte and McElhone: (i) made, or caused others to make, deceptive 

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phone calls to CFS’ merchants; (ii) sent, or caused to be sent, false and misleading letters to 

merchants to advise them their account balances had been assigned to Platinum Rapid; (iii) caused 

dozens of CFS merchants to make payments to Platinum Rapid and Financial Mutual, rather than 

to Receivership Entities, including Par Funding or CFS; (iv) directed exception portfolio 

merchants and/or their alter egos, including B&T Supply, Lifeguard Office Supplies, and Bene

Market, to send payments to BG Sky Trade and Financial Mutual; (iv) executed, or caused to be 

executed, hundreds of financial transactions, if not more, over the course of multiple months, 

through multiple shell corporations controlled by loyal nominee owners, in an attempt to make the

funds untraceable; and (v) used “straw” check cashers to convert the proceeds to cash. LaForte 

and McElhone blatantly violated the Court’s orders with each of these actions and, by doing so, 

ensured that funds rightfully payable to the victim-investors were instead diverted for their 

personal use and benefit, as illustrated in the charts below: 

Funds Distributed by Financial Mutual

Recipient Amount

Defendants’ Professional Fees $2,059,129.95

Bushwick Beer Gardens / Bushwick BG 715,838.32

Justin Scavetti 360,000.00

Peter Padovano 255,299.99

F&N Consulting 138,663.64

Sage LaForte 100,146.00

Mac Mrktng 90,576.80

Dayne Property Management Group Inc. 40,875.00

Frank Scarpati Investment – Atlas Fund 25,000.00

Frank Scarpati 20,000.00

Marc Roddini 18,150.00

Tina LaForte 8,000.00

John Mulvihill 4,100.00

James LaForte 3,500.00

Total $3,839,279.70

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Funds Distributed by BG Sky Trade

Recipient Amount

Financial Mutual $656,029.51

Jade Redevelopment9 680,000.00

Defendants’ Professional Fees 479,195.00

James LaForte, Jr. 330,467.84

F and N Consulting 235,000.00

Total Business Strategies 85,000.00

Sage Choi LaForte 43,950.00

Tina LaForte 37,000.00

John Mulvihill 21,010.49

Straight Line Source 15,000.00

Peter Padovano 10,000.00

Total $2,592,652.84

Funds Distributed by Bushwick BG, LLC a/k/a Bushwick Beer 

Gardens

Recipient Amount

Dayne Property Management Group Inc.10 $1,392,400.00

9 Jade Redevelopment LLC (“Jade Redevelopment”) is a Philadelphia business entity that appears 

to be in the business of acquiring and leasing rental units in Philadelphia, Pennsylvania. According 

to recent court filings in Municipal Court in Philadelphia, Pennsylvania, Jade Redevelopment’s 

business address is 2204 West Erie Avenue, Philadelphia, PA 19140. [Exh. 14.] Joey Rosenberg 

represents himself to be the Founder of Jade Redevelopment on his LinkedIn profile. [Ex. 15.] 

Joey Rosenberg is also the president of Rosenberg’s Check Cashing, Inc., which operates a check 

cashing operation out of 2204 West Erie Avenue, Philadelphia, PA 19140, the same address that 

Jade Redevelopment uses. Justin Scavetti, who received $360,000 from Financial Mutual, cashed 

several of those checks at Rosenberg’s Check Cashing. [Exh. 11, at pp. 2, 3, 5, 8, 11, 12.]

Bank records contained within the Receivership Entities’ records reflect that James LaForte, Jr., 

individually and on behalf of entities he controlled, including Valleybrook Consulting LLC and 

Ranier and Lloyd Associates LLC, transferred at least $180,000 to Jade Redevelopment prior to 

the establishment of the receivership. Jade Redevelopment also received at least $680,000 from 

BG Sky Trade as part of this diversion scheme.

10 Dayne Property Management Group Inc. received several merchant cash advances from Par 

Funding prior to the receivership. After the receivership, on May 9, 2022, Dayne Property 

Management Group paid $94,281 to Palm Beach County for the 2021 property taxes due on the 

$5.8 million waterfront residence of Defendant McElhone at 107 Quayside Drive in Jupiter, 

Florida. [Exh. 16.] That property is now part of the Receivership Estate, but Defendants LaForte 

and McElhone remain liable for paying the property taxes pursuant to an agreement with the 

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Defendants’ Professional Fees $468,000.00

James LaForte, Jr. $341,807.78

Justin Scavetti $212,000.00

F&N Consulting $120,100.00

Vincent Minsquero $37,000.00

Sage LaForte $26,450.00

Total $2,597,757.78

Notably, these tables do not reflect substantial restaurant charges, automobile expenses, 

rental payments in luxury New York residential buildings, cell phone and cable charges, shoppingrelated charges, credit card payments, among other seemingly personal expenses that Financial 

Mutual, BG Sky Trade, and Bushwick paid over this same period of time.

CONCLUSION

For the foregoing reasons, the Receiver respectfully requests that the Court issue an Order 

to Show Cause to Defendants Joseph LaForte and Lisa McElhone. LaForte and McElhone, 

through their misconduct and deception—directed at both the Court and the Receiver—have cost 

the investors millions of dollars in the form of diverted collections, unnecessary attorneys’ fees 

and costs, in addition to the Court’s time and resources. See Velex, 939 F.3d at 1215 (upholding 

award of attorneys’ fees to prevailing party in a contempt proceeding because “this Court has long 

held that no willful or intentional violation of a court order is required for attorneys’ fees to be 

granted as a contempt sanction”); Watkins, 943 F.2d at 1304 (noting that the Receiver may seek 

“attorney’s fees and expenses”); Tom James Co. v. Morgan, 141 F. App’x 894, 900 (11th Cir. 

2005) (stating that the district court has the “inherent power” to award reimbursement for 

investigative expenses). Indeed, it is Defendants LaForte and McElhone—and not the victimReceiver. A LinkedIn profile for “Jimmy Schillaci,” an alias James LaForte, Jr. often used, 

represents that he is the “Business Owner” of Dayne Property Management. [Exh. 17.]

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investors—who should bear the expense of the fees and costs resulting from their numerous 

violations of the Court’s orders.

The Receiver also requests that the Court issue an order lifting the litigation injunction to 

allow the Receiver to pursue claims against the following individuals and entities related to their 

involvement and participation in this diversion scheme: James LaForte, Jr. (a/k/a “Jimmy 

LaForte,” a/k/a “Jimmy McElhone,” a/k/a “Jimmy Schillaci”), Tina LaForte, Sage Choi LaForte, 

Jamie McElhone, Francis L. Scarpati (a/k/a “Frank Scarpati”), Peter Padovano, Vincent Bardong, 

Alan Redmond, Marc Roddini, Vincent Scavetti, John R. Mulvihill, III, Platinum Rapid Funding 

Group, Ltd., Financial Mutual, Inc., Straight Line Source, Inc., BG Sky Trade LLC, Bene Market 

LLC, Mac Mrktng, LLC, F and N Consulting, Inc., and Bushwick BG LLC a/k/a Bushwick Beer 

Garden LLC.

The Receiver also requests that the Court impose a coercive daily fine until Defendants 

LaForte and McElhone comply with the Order and the Amended Order by turning over all records 

and documentation regarding this diversion scheme. Watkins, 943 F.2d at 1304 (noting availability 

of imposing a coercive daily fine for contumacious conduct).

Finally, during the Receiver’s meet-and-confer efforts regarding this motion, counsel for 

Defendants LaForte and McElhone requested that, in the event the Court issues a show cause order,

McElhone and LaForte be provided 30 days to file a response. The Receiver does not oppose the 

Court providing Defendants LaForte and McElhone 30 days to file their response, following the 

issuance of a show cause order. A proposed Order granting this motion is attached as Exhibit 18.

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CERTIFICATION REGARDING PRE-FILING CONFERENCE

The undersigned counsel has conferred with counsel for Joseph LaForte and Lisa 

McElhone, and with the SEC, regarding the relief sought through this motion and certifies that: (1) 

counsel for Defendants Joseph LaForte and Lisa McElhone oppose the Receiver’s request for the 

Court to enter a show cause order, and do not agree that they violated the Court’s orders or should 

be held in contempt, but they do not oppose the Receiver’s request to lift the litigation injunction 

to pursue claims against third parties related to the allegations underlying this motion; and (2) the 

SEC does not oppose the Receiver’s requested relief. 

Dated: July 29, 2022 Respectfully Submitted, 

STUMPHAUZER FOSLID 

SLOMAN ROSS & KOLAYA, PLLC 

Two South Biscayne Blvd., Suite 1600 

Miami, FL 33131 

Telephone: (305) 614-1400 

Facsimile: (305) 614-1425 

By: /s/ Timothy A. Kolaya

TIMOTHY A. KOLAYA 

Florida Bar No. 056140 

tkolaya@sfslaw.com

Co-Counsel for Receiver 

PIETRAGALLO GORDON ALFANO 

BOSICK & RASPANTI, LLP 

1818 Market Street, Suite 3402 

Philadelphia, PA 19103 

Telephone: (215) 320-6200 

Facsimile: (215) 981-0082 

By: /s/ Gaetan J. Alfano 

GAETAN J. ALFANO 

Pennsylvania Bar No. 32971 

(Admitted Pro Hac Vice) 

GJA@Pietragallo.com

Co-Counsel for Receiver

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on July 29, 2022, I electronically filed the foregoing document 

with the clerk of the Court using CM/ECF. I also certify that the foregoing document is being 

served this day on counsel of record via transmission of Notices of Electronic Filing generated by 

CM/ECF. 

/s/ Timothy A. Kolaya 

TIMOTHY A. KOLAYA

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