The former chief financial officer of a now-defunct Philadelphia-based lending company was sentenced Monday to 5½ years in prison — a penalty that a federal judge said was reflective of the man’s role in helping perpetuate one of the biggest frauds in Pennsylvania history.
Joseph Cole Barleta, formerly a top official at Par Funding, was a key player in helping the cash advance business run for years as a criminal enterprise. He created bogus financial statements and concealed important metrics to hide the firm’s perilous financial health, prosecutors said, acts that allowed Par to deceive investors and raise more than $500 million based on false promises of lucrative returns.
Barleta was not accused of some of the more brutish crimes committed by other Par executives, including those who resorted to loan shark-style tactics to collect on debts, or those who threatened to kill borrowers who fell into default.
Still, prosecutors said Barleta was a crucial part of ensuring that Par could continue raising money even as the business was suffering massive losses — and he was paid more than $8 million over the years to do so.
U.S. District Judge Mark Kearney told Barleta that even though he wasn’t the type of “old fashioned criminal” who might shake down borrowers or threaten people who posed a risk to the conspiracy, Par’s fraud could not have continued without him.
“You put the holy oil on what they were doing,” Kearney said.
Barleta, who pleaded guilty last year to racketeering, said he was remorseful and ashamed by his actions. He was 29 years old and without a college degree when he was hired, he said, and he was eager to please Par’s founder, Joseph LaForte, thinking that doing so could help him secure his family’s financial future.
Instead, Barleta said, he failed them, and abandoned the ideals he learned from his mother, who was a working single parent and raised Barleta and his sister.
“I dishonored myself, my family,” Barleta said. “There’s no justification for it.”
Barleta, who became a naturalized citizen after emigrating from the Philippines with his family as a child, joined Par in 2012 after replying to an employment ad on Craigslist. He had some previous accounting experience but was perhaps better known for his exploits in the unrelated world of competitive eating, where he went by the moniker “Johnnie Excel.”
Par had been founded by LaForte to offer quick loans at high interest rates to borrowers deemed too risky to secure financing from traditional banks. The firm ran radio ads and staged elaborate solicitation events to attract investors who would provide funds it could lend out to borrowers. And it would go on to portray itself as unusually successful, promising yearly returns of 10% or more.
Behind the scenes, however, prosecutors said the business was a sham. LaForte was legally barred from selling securities because of previous felony convictions, and he’d listed his wife, Lisa McElhone, as the company’s CEO, even though she had little to do with its day-to-day operations.
LaForte and Barleta also lied to investors about Par Funding’s profitability and the default rate on its loans to try and secure additional funding. Between 2016 and 2020, prosecutors said, the business was operating with yearly deficits as high as $70 million — details Barleta helped hide from lawyers, auditors, and financial regulators.
Prosecutors said he also worked with accountants on a complex payment structure that obscured how much money he and the LaFortes were collecting personally. And although Barleta did not rake in the tens of millions that LaForte used to buy luxury houses, boats, watches, jewelry, and other items, prosecutors said Barleta did use his $8 million in compensation to pay for things like a personal concierge and travel arrangements.
The conspiracy began falling apart in 2020 when Par was unable to pay investors’ monthly dividends. The company was ultimately put under the control of a court-appointed receiver, and federal prosecutors in Philadelphia pursued a criminal case against the company’s leaders.
Three years later, the U.S. Attorney’s Office filed conspiracy, extortion, and wire fraud charges against Par executives including LaForte, McElhone, and Barleta. All have since pleaded guilty, and most of the key players have been sentenced, including LaForte, who in March was ordered to serve 15½ years behind bars.
Barleta said Monday that he could not explain why he ignored the “red flags” about the business or the way it operated, beyond saying he wanted to prove to LaForte that he could help the firm succeed.
Kearney, the judge who’s overseen the criminal cases against Par executives, told Barleta that although his crimes may not have been as brazen as LaForte’s, he nonetheless was responsible for failing to recognize the harm he was continuing to cause to himself and others.
“You are the perfect vehicle for LaForte,” he said, “because you’re just gonna run through a wall and you’re not going to consider how hard that wall’s going to hurt.”