Par Funding probe: Company founder threatened to kill Philly developer Ori Feibush, prosecutors say

With his properties and bank accounts seized and investigations by multiple federal agencies bearing down on him and his company last year, Joseph LaForte, founder of Philadelphia business lender Par Funding, was feeling the pressure — and, prosecutors say, lashing out in increasingly violent ways.

Government lawyers accused LaForte this week of attacking or threatening several people he believed to be potential witnesses in the $550 million fraud and extortion case against him.

Among his targets, they say, was prominent South Philadelphia real estate broker and developer Ori Feibush, whom LaForte allegedly threatened to have killed last year.

The heated Nov. 28 argument erupted in the conference room of Feibush’s Point Breeze-based real estate brokerage and development business, OCF Realty, and arose after the company had been appointed to manage 20 properties the government seized from LaForte and his wife, Lisa McElhone. Feibush had drafted a report for court-appointed monitors that LaForte believed placed too low a value on those real estate holdings.

When LaForte showed up at Feibush’s office, prosecutors say, he flew into “a violent rage.”

“He threatened to have [Feibush] ... ‘clipped’ if [Feibush] did not increase the property valuations,” Assistant U.S. Attorney Matthew Newcomer wrote in a recent court filing that did not identify Feibush by name. “LaForte had his hands clenched into fists at his side, as if he was trying to hold himself back from striking [Feibush,] and … he warned [Feibush] he had ‘500 men on the street’ ” to carry out his threat.

LaForte’s lawyer, Joseph R. Corozzo, has dismissed that account as an exaggeration and described the dispute between the two men instead as “a onetime, very brief argument.”

Feibush, in an interview Friday, declined to say whether he felt “terrorized,” as prosecutors have described his reaction in court filings. Within days of the threat, he submitted a revised report increasing his valuations of the real estate portfolio by nearly $2 million.

“I stand by my estimates,” Feibush said.

Still, the encounter was among the reasons cited by a federal judge this week to jail LaForte until his trial on charges including conspiracy, extortion, fraud, tax crimes, perjury, and obstruction of justice — and is only the latest allegation of strong-arm tactics that prosecutors say were integral to how Par Funding conducted business.

“His entire way of doing business — his entire M.O. — is to use violence and threats of violence to get his way,” Newcomer said at a court hearing Thursday. “These are the tools in the LaForte toolbox.”

LaForte, 52, of Philadelphia, has denied allegations — lodged in a 63-count federal indictment last week — that he and other Par Funding principals ran their Old City-based company like a mob-style loan-sharking operation, raising more than a half-billion dollars between 2016 and 2021 by deceiving investors, lending it out to small-business owners in need of quick cash, and then using violence and intimidation when those borrowers failed to pay back their debts.

Yet as dual investigations by the FBI and the U.S. Securities and Exchange Commission have played out over the last four years, the allegations of menacing behavior have continued to pile up.

Borrowers from Par Funding have reported that LaForte threatened to blow up their homes or cars or have their children kidnapped amid disputes over unpaid debts. One said LaForte dispatched a Par Funding employee who threatened to stab him in the head with a fork. Prosecutors have accused LaForte of telling another borrower he’d leave her at the bottom of the Hudson River wearing a pair of “cement shoes.”

After the SEC sued LaForte, his company, and several of its principals for fraud in 2020 and a federal judge in Miami appointed a receiver to identify company and personal assets that could be sold off to help repay Par Funding’s bilked investors, prosecutors say LaForte and his brother James attacked a lawyer in Philadelphia who had been conducting that work.

That broad-daylight assault left lawyer Gaetan Alfano bleeding from injuries that required seven staples to the head.

Feibush — one of Philadelphia’s most outspoken and active developers who ran an unsuccessful campaign for City Council in 2015 — said he began managing properties for McElhone, LaForte’s wife and the company’s listed CEO, in the late 2010s as cash from Par Funding began piling up and she began buying up properties in Center City. She hired Feibush’s realty firm to manage them.

By 2020, they included a 24-apartment complex in Spring Garden, eight apartments and two storefronts in Fishtown, and 16 apartments with ground-floor retail in Old City, near Par Funding’s offices, among others.

All those properties were seized — along with bank accounts, the LaForte’s Haverford home, vacation properties in the Poconos and Florida, and a private plane, as well as art, jewelry, and other assets — because of the 2020 SEC lawsuit.

The court-appointed receiver, Florida lawyer Ryan K. Stumphauzer, kept Feibush’s firm on as the property manager while the court sorted out whether the real estate should be sold off to help pay back hundreds of millions of dollars Par Funding owed its investors.

As part of that work, Feibush provided an initial estimate in October 2022 valuing the portfolio of 20 commercial, residential, or mixed-use properties — including 110 apartments and 11 store or office spaces — at $44.3 million.

Days after LaForte’s alleged death threat, Feibush revised that estimate upward to $46 million — an increase of 4%. Prosecutors maintain he did so because “he was terrified of LaForte and what he might do or have done to his family.”

Feibush did not report the alleged threat to authorities or Stumphauzer at the time and declined Friday to address his reasons for initially failing to do so. He also declined to say when he eventually reported it. .

The property valuation was particularly important to LaForte at the time, prosecutors say, because LaForte and his wife had just been ordered by the federal judge overseeing the SEC case to pay roughly $197 million that would be used to pay back investors.

The more value assigned to their real estate holdings and other seized assets, the less additional cash they would have to pay up to satisfy that judgment.

Corozzo, LaForte’s lawyer, acknowledged that his client’s interactions with Feibush over the valuations had become heated. LaForte, the lawyer said, was concerned that Feibush had undervalued the properties because he intended to buy them himself either directly or through straw buyers.

“I deny there were threats — those specific words,” Corozzo said during a court hearing this week. “I don’t deny there was an argument.”

Feibush, meanwhile, says he stands by both valuations he put forward. But, he added, he reviewed his first valuations after LaForte’s complaint and decided the value he’d assigned to some of the properties warranted an increase. He sent a revised report to the receiver’s lawyers with those higher values. The receiver did not use those revisions in its official report to the court.

“I wouldn’t have looked at it again, if [LaForte] hadn’t come into my office,” he said in the interview Friday.

Feibush is likely to be called as a government witness to expand on the dispute should LaForte take the case against him to trial in the coming months. The episode forms the basis for one of the eight counts of obstruction of justice, retaliation, or witness tampering included in LaForte’s indictment.

And prosecutors, at least, hope his story will help them secure LaForte’s conviction.

“It paints a picture,” said Newcomer, “of a man who is literally willing to do or say anything to stop [the criminal] investigation and the SEC case.”