Document Type


Version Deposited

Accepted for publication (PostPrint)

Publication Date


Publication Title

Journal of Business Ethics Education


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, Lisa McElhone, to pay $337 million to Par Funding investors and to declare they engaged in a Ponzi scheme in defrauding those investors.3 Ultimately the Federal district court in Miami ordered Par cofounders to pay “$219 million in ‘ill-gotten gains,’ fines and interest so the funds can be used to help reimburse 1,200 investors who were duped into buying the risky, unregistered securities used to finance the high-fee loan company.”4 How LaForte and McElhone executed their scheme is an intriguing story which provides helpful insight into ethical and U.S. securities law principles


This manuscript has been accepted for publication in Volume 20 of the Journal of Business Ethics Education.