Law Commons^™

Par Funding: A Fabulous Fraud Founded In Philly, Edward J. Schoen

Rohrer College of Business Faculty Scholarship

This case describes a recent iteration of the Ponzi scheme originated in 1920 by Charles Ponzi: creating a plausible investment, attracting investors, using the money from more recent investors to pay off earlier investors, and earning a substantial profit, estimated to be $15 million (worth $220 million today).1 While not as big as Bernie Madoff’s Ponzi scheme, as a result of which he was sentenced to 150 years in prison and ordered to pay restitution of $170 billion to his victims,2 the Federal district court in Miami was asked to order Par Funding’s cofounders, Joseph W. LaForte and his wife, …