by Jeremy Roebuck Updated
Sep 8, 2022
Renato "Gino" Gioe threatened “to stick a fork” in the head of one borrower to collect a debt owed to Philadelphia-based Par Funding. He threatened to cut off the hands of another.
A bodybuilder and reputed associate of New York’s Gambino crime family became this week the first defendant charged in a long-running criminal probe into the business practices of one of the nation’s largest merchant cash-advance lenders.
Renato “Gino” Gioe, 54, of Miramar, Fla., pleaded guilty Tuesday to federal charges alleging he served as the enforcer for Philadelphia-based Par Funding, which offered quick cash at high interest rates to help businesses ride out money crunches.
But when borrowers couldn’t pay their debts, it was the well-muscled Gioe the company sent to collect, using mob-style extortion tactics including harassment and violent threats.
He threatened “to stick a fork” in the head of one borrower, prosecutors said, and warned another that he would cut off their hands if they didn’t pay up. Threats against borrowers’ families were also routine, according to court filings laying out a six-year pattern of conduct involving at least seven victims.
But the charges against Gioe — and his guilty plea Tuesday — were also significant for what they revealed about the wider case federal authorities have been pursuing against his employers since at least 2019.
Par Funding quickly became a national name in the growing but increasingly controversial merchant cash-advance industry, which sidesteps traditional lending regulations such as interest rate caps by asserting the money they give to borrowers isn’t a loan but an advance on future sales.
Critics say such loans are often designed to fail, allowing companies like Par Funding to profit more from defaulting clients than those who pay their loans on time.
And despite the industry’s sheen of professionalism, lawsuits against some of the most aggressive merchant cash-advance lenders painttheir collection practices as little more than old-school mob loan-sharking dressed up in a business suit.
Dozens of lawsuits filed against Par Funding describeit and its founder — Lower Merion resident Joseph LaForte, a convicted scammer with ahistory of a multimillion-dollar fraud — as one of the worst offenders.
Charging documents in Gioe’s case describe him traversing the country to harass and threaten borrowers who fell behind on what they owed.
He admitted in court Tuesday to hassling one borrower — the owner of a chain of Philadelphia barbershop that owed Par Funding more than $120,000 — for three years, stopping athis stores unannounced and threatening to hurt him if he didn’t pay up.
In 2018, he told another — the owner of a Los Angeles-based technology company — that failure to make good on their debts could “make widows” and that one of the last people who hadn’t paid on time had been involved in a suspicious car accident.
LaForte has previously dismissed claims of such heavy-handed collection tactics as “absurd and patently false stories” from “disgruntled ex-customers” hoping to weasel out of their debts.
But by 2019 the federal government had taken note.
The following year, the U.S. Securities and Exchange Commission filed suit against the company, LaForte, his wife, and a network of associated businesses and financial advisers alleging they’d defrauded investors while raising nearly $600 million to cover loans it doled out while downplaying its massive number of borrower defaults. A federal judge in Florida has since placed the company into receivership.
The FBI raided Par Funding’s Old City offices in 2020. Search warrants soon followed for LaForte’s Lower Merion home.
Though those charges are unrelated to his merchant-cash advance business, prosecutors have made no secret of the fact that they’ve been building a larger criminal case against him and potentially others tied to Par Funding’s business practices.
At a bail hearing they urged a federal judge to hold LaForte in custody while awaiting trial on the gun charges, citing threats Par and its employees made against their customers.
And Gioe was charged in a federal extortion case in New Jersey that summer — but one that was involving personal loans he made to a business owner in Toms River and not directly tied to his work for Par.
It was in that case, which remains unresolved, that prosecutors first identified Gioe as a mob associate — a claim he and his attorneys, Robert Caliendo and Christopher G. Furlong, have denied.
Gioe suggested to Bloomberg in 2018 that the case stemmed from prejudice against Italian Americans.
He and his attorneys did not respond to requests for comment about the Philadelphia charges unsealed this week.
Details about his guilty plea and his deal with the government remain under court seal; it’s unclear whether Gioe has agreed to cooperate or potentially testify in the wider probe.
But charging documents in the case suggest further legal jeopardy for LaForte.
While he is not mentioned in them by name, the filings say all the threats Gioe made were conductedunder orders from a Par Funding owner who matches LaForte’s description.
In one 2018 incident described in court filings, Gioe had LaForte on speakerphone while he menaced the owner of a Miami-based real estate company that owed Par Funding more than $4.1 million.
After Gioe took the man’s Rolex watch as a gift of appeasement, the owner sent LaForte a text begging him to “please call off the hounds … and by that, I mean that animal you sent down here.”
Shane Heskin, a Philadelphia-based attorney who began representing several former Par Funding borrowers after Gioe showed up to collect from his father-in-law’s business, hailed the man’s guilty plea this week as a step forward in addressing what he described as Par Funding’s pattern of predatory practices.
“It was this type of behavior that made me so passionate about getting into this area of law and fighting these violent and threatening collection habits,” he said. “Hopefully this will act as a deterrent to this type of behavior.”
Sept. 8, 2022
I cover public corruption, white collar crime and the criminal misuse of power.