IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-CIV-81205-RAR

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff, 

v.

COMPLETE BUSINESS SOLUTIONS 

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

Defendants. 

______________________________________/

RECEIVER, RYAN K. STUMPHAUZER’S RESPONSE TO PLAINTIFF’S 

EXPEDITED MOTION TO AMEND RECEIVERSHIP ORDER

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

Complete Business Solutions Group, Inc. d/b/a Par Funding; Full Spectrum Processing, Inc.; 

ABetterFinancialPlan.com LLC d/b/a A Better Financial Plan; ABFP Management Company, 

LLC f/k/a Pillar Life Settlement Management Company, LLC; ABFP Income Fund, LLC; ABFP 

Income Fund 2, L.P.; United Fidelis Group Corp.; Fidelis Financial Planning LLC; Retirement 

Evolution Group, LLC; RE Income Fund LLC; and RE Income Fund 2 LLC (the “Receivership 

Entities”), by and through undersigned counsel, and pursuant to L.R. 7.1(d)(2), hereby files this 

Response to Plaintiff’s Expedited Motion to Amend Receivership Order (ECF No. 105) (the 

“Motion”).

INTRODUCTION

The Receiver respectfully submits this Response to report on the status of several issues 

identified in the Securities and Exchange Commission’s (“SEC”) Motion relating to the Receiver’s 

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appointment and fulfillment of his duties. Specifically, the Motion identified two sets of issues 

that had arisen as of August 7, 2020, when the SEC filed the Motion:

(1) issues relating to the ongoing participation in this matter of attorneys based on 

unspecified representations of affiliates or owners of the Receivership Entities1

(see Motion at 3-5); and

(2) issues relating to officers, employees, and agents of the Receivership Entities 

(see id. at 5-6).

Brief summaries of recent events relevant to both issues are set forth below.

RESPONSE

I. Ongoing Attorney Participation in this Matter (See Motion at 3-5)

The SEC’s Motion explains that, over the last two weeks, the law firm of Fox Rothschild 

(the “Firm”) had made a number of appearances before the Court in different capacities. The Firm 

initially advised the Court in a letter dated July 27, 2020, that it represented Defendants Complete 

Business Solutions Group, Inc. d/b/a Par Funding, Full Spectrum Processing, Inc., Lisa McElhone, 

Joseph Cole Barleta and Joseph W. LaForte. During the status conference on August 4, 2020, the 

Court acknowledged the concerns raised by the SEC regarding the Firm’s continuing 

representations of any Receivership Entities:

I think her concern really is more as we -- especially as we get, for example, into 

the preliminary injunction hearing, and we hear from the receiver (inaud.) in the 

best interest of the company are (inaud.) in the forefront of the receiver's mind, that 

we don't have kind of a clash, if you will, and counsel for the entity in receivership 

and the receiver who is supposed to be representing the entity going forward.

******

So can you maybe walk me through that because if you do feel that you are able, 

whether it be due process or whatever, to remain in the case while I have a receiver

representing the entity, then I think what we are going to see either from the receiver 

or from the SEC is a motion that will effectively end your representation of the 

entity given the receivership, which I would then review and then have to write a 

1 Unless otherwise defined herein, capitalized terms shall have the same meaning as set forth in 

the Motion. 

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ruling on that, but maybe I'm getting ahead of myself, maybe you are recognizing 

that dichotomy between your representation and that of the receiver.

(See Exhibit 1 at 104:15-106:4.) The Court thereafter instructed the Fox Rothschild attorneys to 

notify the Court by August 6, 2020, if they intended to represent CBSG at the preliminary 

injunction hearing on August 18, 2020. Fox Rothschild subsequently advised the Court that it 

would not appear on behalf of CBSG at that hearing. (See Exhibit 2 (“As the Court requested that 

we file a notice today, I will prepare a notice confirming that we have no role in the preliminary 

injunction hearing and informing the Court of our discussions.”).) 

Contemporaneous with making that representation to the Court, Fox Rothschild continued 

to state its intention to act on behalf of the Receivership Entities. Examples include:

 An e-mail to the SEC on the evening of August 5, 2020, wherein a Fox Rothschild 

attorney wrote: “I’ll try to make this clear. The individuals and the relief defendant 

have their own counsel. . . . That leaves representation of the two companies. Brett 

and I had a detailed conversation with the Receiver’s counsel today about the legal 

and practical issues related to the representation of the companies.” (See ECF No. 

105-3.)

 An e-mail to counsel for the Receiver on August 6, 2020, wherein a Fox Rothschild 

attorney stated that “the officers, directors and owner of this company are a 

constituency that have a right to be protected for under Florida corporate law . . . . 

We would like to discuss with you how the receiver and you intend to protect the 

interests of the owner, officers and directors of this Florida company.” (See Exhibit 

3.)

 An e-mail to counsel for the Receiver on August 6, 2020, wherein Fox Rothschild 

explained that it was continuing to speak with the owners of certain Receivership 

Entities regarding its ongoing participation in the case. (See Exhibit 4 (“We passed 

along your position to the owners of the Companies. It is their call as to whether 

they want to litigate this issue.”).)

At the same time Fox Rothschild suggested that it was now communicating with the owners of 

certain Receivership Entities regarding their legal rights, it also filed a five-page “Notice of 

Independent Counsel’s Continuing Role for the Companies.” (ECF No. 100.) 

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In this Notice, Fox Rothschild explained its view that because the “[c]ourt did not provide 

the Receiver with a legal change of control of the Companies, the terms of this Receivership order 

does not, under this binding legal authority, allow the Receiver to control the attorney-client 

privilege and terminate the Companies existing counsel.” (Id. at 4-5.) Fox Rothschild further 

indicated that “undersigned counsel respectfully submits that it remains our ethical duty to 

continue our representation of the Companies, unless and until an arrangement between the owner 

of the Companies and the Receiver can be accomplished, or until the Court orders a change in that 

representation. See ABA Model Rule 1.16; Florida Rules of Professional Conduct 4-1.16.” (Id.) 

That evening, the SEC asked Fox Rothschild:

I just saw your filing of today where you tell the Court you represent “the owners” 

of CBSG. Who are “the owners” to whom you are referring? Please let me know 

today.

Fox Rothschild responded: 

We are informed that the legal ownership of CBSG is held in a trust.

(See ECF No. 105-3.) 

At the timing of this filing, the Firm’s ongoing representation of certain Receivership 

Entities or its “legal ownership” (as “independent counsel”), and how it may relate to other 

representations of other individual Defendants or their owners, has not been clarified.2 

2 The Receiver’s concerns here also relate to the sharing of confidential or privileged information 

belonging to the Receivership Entities in other ongoing representations. For example, in ongoing 

litigation pending in the Eastern District of Pennsylvania, CBSG and a company called Fast 

Advance Funding, Inc. are jointly represented by Fox Rothschild. Individual Defendant Joseph 

Laforte, when defended during his deposition by Fox Rothschild on March 5, 2020, testified that 

he was an employee of Fast Advance Funding, Inc., and disclaimed any involvement in or 

knowledge of CBSG/Par Funding or his wife’s role in the company: 

Q. Who is the compliance person that Par Funding, in 2012, that would have been 

responsible --

MR. LAFORTE: I don't know any employees of Par Funding. I’m not going to 

testify of things I don't know about because I won't insult the judge.

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II. Officer, Employee, and Attorney Cooperation (See Motion at 5-6)

A. Officers and Employees

The SEC reports in its Motion that “the principal officers and owners of the Receivership 

Entities—i.e., the individual Defendants—have thus far refused to sit for direct interviews with 

the Receiver to discuss the historical (and potential future) financial and operational status and 

viability of these businesses.” (Motion at 5.) The individual Defendants have continued to refuse 

to sit for direct interviews. 

On August 3, 2020, the Receiver sent e-mails to counsel for each of the individual 

Defendants asking to schedule a telephonic interview of each of the individual Defendants that 

would last no more than one hour. At the time of this filing, none of these individual Defendants 

have agreed to participate in these interviews. Counsel for Joseph LaForte demanded that the 

Q. If you could just let me finish my question because --

MR. LAFORTE: I have a question for you. Did you take $50,000 in cash advances?

. . .

Q. Can you please let me know whether you know whether your wife, Lisa 

McElhone, had any involvement with CBSG in 2019.

MR. LAFORTE: No.

Q. You don't know or she didn't?

MR. LAFORTE: I don't know any answers to these questions about Par 

Funding/CBSG.

. . .

Q. So it's true that your wife has had nothing to do with CBSG since she purchased 

Laquer Lounge?

MR. LAFORTE. I don’t know.

Q. Got it.

MR. LAFORTE Is that illegal? Is that illegal? You can't -- you have to work in the 

Laquer Lounge, girl. Is that illegal? Who the president is, who this and that. This 

poor client, I feel bad for the 30,000 they paid.

Q. Is your wife still the president of CBSG?

MR. LAFORTE. I don't know.

(See ECF No. 20-2.)

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Receiver provide him in advance with a list of questions that the Receiver intended to ask of Mr. 

LaForte. Mr. LaForte’s attorney also responded that he wanted to interview the Receiver.

On August 10, 2020, the Receiver sent a letter to counsel for the individual Defendants and 

advised that the Receiver wanted to schedule discussions with employees who were most 

knowledgeable about various aspects of the operations of these Companies. A copy of this letter 

(the “Letter Seeking Information”) is attached hereto as Exhibit 5. The Receiver asked that the 

individual Defendants provide the names and contact information for these employees by August 

11, 2020. None of the individual Defendants provided the requested information as requested. 

On August 12, 2020, however, Bettina Schein, the attorney for Joseph Cole, responded that 

Mr. James Klenk, the comptroller of the Company, would be able to answer most of the Receiver’s 

questions. Ms. Schein offered to schedule the interview, but initially made clear that she and her 

co-counsel, although they do not represent Mr. Klenk, would be present for any interview of Mr. 

Klenk. After a lengthy meet-and-confer call, counsel for the individual Defendants have now 

receded from this position and agreed that the Receiver may communicate directly with CBSG 

employees without the individual Defendants’ counsel being present. As a result, the interview of 

Mr. Klenk has now been confirmed for tomorrow, August 13, 2020, at 11:00 a.m.3

In the Letter Seeking Information, the Receiver also asked for answers to a few basic 

questions and requested the individual Defendants to provide the Receiver with certain 

documents. The Receiver asked the individual Defendants to respond with this information by 

3 The individual Defendants have not provided the Receiver with the names and contact 

information for any other employees of CBSG, but rather suggested that Mr. Klenk “is well 

equipped to respond to most of the questions” the Receiver posed in the Letter Seeking 

Information.

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August 12, 2020. As of this filing, the Receiver has not received any response from the individual

Defendants to these requests.

B. Attorneys and Agents

Several Defendants have told the Court that “counsel for CBSG are available for 

consultation with the Receiver on the legal and compliance issues relating to CBSG’s business.” 

(See ECF No. 115 at 5 (“Whom better for the Receiver to consult with on the questions of the 

current litigation around the country (involving hundreds of cases), and the various state laws and 

rules than the excellent lawyers who have been full-time prosecuting and defending these cases –

successfully, we might add – for the last six months.”)). Specifically, on August 4, 2020, Lisa 

McElhone, Joseph Cole Barleta, Joseph W. LaForte, and The L.M.E. 2017 Family Trust—along 

with the Fox Rothschild firm who joined on behalf of Complete Business Solutions Group, Inc. 

d/b/a Par Funding, Full Spectrum Processing, Inc., Lisa McElhone, Joseph Cole Barleta, Joseph 

W. LaForte, and the L.M.E 2017 Family Trust—filed a Joint Memorandum to the Court Regarding 

the Scope of the Receiver’s Activities Pursuant to the Current TRO (ECF No. 84) (“Joint 

Memorandum”). In the Joint Memorandum, these Defendants detailed in over three (3) pages the 

many attorneys CBSG has utilized since 2014 to provide legal opinions and guidance regarding 

the company’s compliance regarding the legality of its funding business and raising of capital from 

investors. The individual Defendants identified five different law firms (the “Legal Advisors”) 

that provided legal advice, opinion letters, formal memoranda (internal or otherwise), and analysis 

regarding these various legal issues.4

4 Defendants advised the Court that CBSG had received legal advice on, among other things, its 

“MCA business” and “risks associated with the MCA business,” “the legality of the funding 

business,” “the purchase and sale of future receivables agreement[s],” “initial promissory 

note/security agreement[s],” “note purchase agreement[s],” “non-principal debt instruments,” 

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On August 10, 2020, the Receiver sent a letter to the Legal Advisors identified by 

Defendants in their filings to the Court. (See Exhibit 6.) The Receiver requested copies of opinion 

letters, formal memoranda (internal or otherwise), or analysis of the legal and compliance issues 

referenced by Defendants in their filings. (See id.; see also Defendants’ Memorandum at 3-4; ECF 

No. 115 at 5 (“Attorneys from Fox Rothschild know the applicable state law and regulation and 

have successfully prosecuted and defended CBSG in courts all over the country.”).) 

At the time of this filing (after the close of business on the Receiver’s requested response 

date), the Receiver has been told by counsel for one of the letter recipients that he has been 

instructed by certain individual Defendants to assert privilege over the CBSG materials and, thus, 

he cannot provide these materials to the Receiver, absent an Order from the Court or agreement 

from the individual Defendants. This is consistent with prior correspondence from counsel for 

Defendant Lisa McElhone wherein she stated her intent to assert privilege against the Receiver, 

not only on her own behalf, but on “behalf of CBSG, herself, its officers, directors and employees,” 

over “each and every communication by, between or amongst any and all counsel for CBSG and 

Ms. McElhone and/or its other officers, directors and employees.” (See August 6, 2020 Ltr., 

attached as Exhibit 7.) Ms. McElhone advised that the Receiver and his counsel should not review 

any such communications, given Ms. McElhone’s assertion of a privilege, and that Ms. McElhone 

intended to “litigate the applicability of the privilege” if the Receiver refused to turn over all such 

documents to Ms. McElhone. (Id.) The Receiver has not received responses from several other 

Legal Advisors. 

“defaults by merchants,” “issues raised by the Texas Securities Commission,” and “note 

restructure[s]” relating to an “Exchange offer.” (Joint Memorandum at 3-4.)

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On August 12, 2020, the Receiver and his counsel engaged in a meet-and-confer with 

counsel for the individual Defendants regarding the Receiver’s request for these materials from 

the Legal Advisors. The individual Defendants have now advised that they will agree to allow the 

Receiver access to these materials from the Legal Advisors, but only if “the Receiver agrees to 

keep all such communications confidential and not provide such communications to any third 

party, including any litigant, the SEC or any governmental agency, as such may be determined to 

constitute a waiver of the company’s privilege.” As of the filing of this Response, the parties have 

not yet been able to reach an agreement on this issue.

CONCLUSION

The Receiver offers this Response for the purpose of updating the Court on these recent 

events and to assist the Court in its consideration of the issues raised in the Motion.

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Dated: August 12, 2020 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

DOUGLAS K. ROSENBLUM

Pennsylvania Bar No. 90989

(Admitted Pro Hac Vice)

DKR@Pietragallo.com

Co-Counsel for Receiver 

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on August 12, 2020, 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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