February 19, 2021
On July 24, 2020, the Securities and Exchange Commission (“SEC”) filed a Complaint in the United States District Court for the Southern District of Florida (the “Court”) against Complete Business Solutions Group, Inc. d/b/a Par Funding; Full Spectrum Processing, Inc.; ABetterFinancialPlan.com LLC d/b/a A Better Financial Plan; and various other entities (collectively defined as the “Receivership Entities”) and individuals. The Court has entered a series of Orders in this matter, including an Order Granting the SEC’s Motion for Appointment of Receiver on July 27, 2020, and an Amended Order Appointing Receiver on August 13, 2020 (the “Amended Receivership Order”).
The Court has appointed me as the Receiver over the Receivership Entities, and has ordered me to “take custody, control, and possession of all Receivership Property and records relevant thereto from the Receiver Entities” (the “Receivership Property” or, collectively, the “Receivership Estates”). In addition, as Receiver, I am responsible to “manage, control, and operate and maintain the Receivership Estates and hold in his possession, custody and control all Receivership Property, pending further Order of this Court.”
There are several types of investors in Par Funding. Some invested directly in Par Funding and received a promissory note from Par Funding reflecting the repayment terms of that investment. Many others invested through “agent funds,” which were separate entities formed for the purpose of pooling funds for investment in Par Funding. Investors in the agent funds received promissory notes from the agent fund, which, in turn, received a promissory note from Par Funding. Many investors in these agent funds utilized self-directed individual retirement accounts (IRAs) for their investment in these agent funds.
The Receiver’s professional staff is responsible for preparing 1099-INT tax forms for the Receivership Entities. Many of these forms have already been prepared and sent out by U.S. Mail to investors of the Receivership Entities. Because the records the Receiver obtained for certain of the Receivership Entities were not accurate and complete, however, the Receiver’s staff is continuing to work on and finalize these tax forms for certain of these entities. We anticipate finalizing and sending out these tax forms within the next few weeks. If you have questions about a tax form you have already received, please send us an email to [email protected]. If you have not yet received a tax form you are expecting to receive from one of the Receivership Entities, we appreciate your patience as we update the applicable records and finalize these documents.
Please note that the Receiver only controls the Receivership Entities. A list of those entities is available through the following link: https://parfundingreceivership.com/list-of-receivership-entities/. If you invested in Par Funding through an agent fund that is not listed as one of the Receivership Entities, you should contact the manager for that fund with any questions, including questions regarding the issuance of tax forms. Some of these agent funds that are not included as Receivership Entities include the following:
- AGM Capital Fund;
- AGM Capital Fund 2;
- Blue Stream Income Fund;
- Cape Cod Income Fund;
- Capricorn Income Fund;
- Capricorn Income Fund I Parallel LLC;
- GR8 Income Fund;
- Jade Fund, LLC;
- Jax Fund;
- LWM Equity Fund;
- LWM Income Fund 2;
- LWM Income Fund Parallel LLC;
- Mariner MCA Income Fund;
- MCA Capital Fund;
- MCA Carolina Income Fund;
- MCA National Fund; Merchant Factoring Income Fund;
- Merchant Growth Income Funding;
- Merchant Services Income Fund Parallel;
- Mid Atlantic MCA Fund;
- MK One Income Fund;
- Par Equity Lenders;
- Pisces Income Fund Parallel LLC;
- RAZR MCA Fund;
- Sherpa 1 Income Fund;
- Spartan Income Fund Parallel LLC;
- STFG Income Fund;
- Titan Holdings LLC;
- Victory Income Fund;
- Wellen Fund I; and
- WorkWell Fund.
Many investors—in connection with tax reporting and other financial planning purposes—have asked the Receiver for information about the value of and anticipated distributions from their investments in Par Funding and these various agent funds. At this stage of the proceedings, the Receiver is continuing his recovery efforts and cannot provide any information regarding the anticipated dates for or amounts of distributions from the Receivership Estate. For those who invested through an IRA, the Receiver is unable to provide any additional information regarding the value of your investment or required minimum distributions from your IRA account. If you have any questions about any adjustments your IRA custodian may have made to the value of the investments contained within your IRA account, you should address those questions to the IRA custodian.
Additionally, the Receiver cannot offer tax or legal advice to investors. Accordingly, the Receiver cannot provide any additional information as to how investors should report the status of their investment in Par Funding or the agent funds for tax purposes, and the impact of this receivership on any required minimum distributions from IRAs. Investors should consult their qualified tax professional, financial advisor, or legal counsel to discuss these issues.
The Receiver will be developing a registration portal where investors can provide the Receiver with updated contact information and other details regarding their investments in Par Funding. The Receiver will also develop a proposed claims procedure for investors and other creditors who believe they are owed money by, and entitled to a distribution from, the Receivership Estate. Any plan for the submission of claims and distributions to investors and creditors will be presented to the Court for its consideration and approval. As part of this process, the Court will establish dates and other requirements for investors and creditors who wish to submit claims as part of this process, which will be posted on the receivership website, available at https://parfundingreceivership.com. Please review this website for updates and other information regarding the status of these proceedings. If you have other questions that are not addressed through the information on this website, you may contact our office by sending an email to [email protected].
Yours very truly,
/s/ Ryan K. Stumphauzer, Esq.
Ryan K. Stumphauzer, Esq.
(A PDF copy of this letter is available by clicking on this link.)