Government seeks dismissal of Dean Vagnozzi’s lawsuit against SEC

A federal lawsuit filed by investment promoter and multimillion-dollar insurance producer Dean Vagnozzi against the United States and a Securities and Exchange Commission attorney should be dismissed on multiple legal grounds, government lawyers argue.

Filed on Friday, the motion to dismiss contends that Vagnozzi’s claims are time-barred. Attorneys cited statutes of limitation tied to events stemming from a 2020 SEC enforcement action involving Par Funding. The Philadelphia-based small-business lender collapsed in 2020 after federal authorities exposed it as a massive $500 million Ponzi scheme.

Attorneys said Vagnozzi was aware of his alleged injuries -- including an asset freeze and receivership -- at the time they occurred, but did not file suit until December 2025.

Government lawyers also argued the SEC had probable cause to seek an emergency temporary restraining order in the underlying case, noting a federal judge granted the request and later proceedings resulted in Vagnozzi agreeing to a preliminary injunction. He ultimately paid $5.09 million to settle allegations tied to the sale of unregistered securities.

Vagnozzi filed his lawsuit Dec. 8 in the Eastern District for the District of Pennsylvania against the SEC and Amie Riggle Berlin, senior trial counsel at the agency. The lawsuit asks the court to compensate Vagnozzi for alleged constitutional violations and abuse of power.

The government's memo asserts that the United States is protected by sovereign immunity, limiting its exposure to such claims, and that Berlin is shielded by both absolute and qualified immunity for actions taken in her role as a government lawyer.

"Nothing in it refutes how poorly they handled the case against me," Vagnozzi said Thursday. "They are hiding behind immunity."

A highly successful Philadelphia-area insurance producer, Vagnozzi pitched his A Better Financial Plan, or ABFP, via radio ads and steak dinners. He touted and sold alternative investments to Wall Street for many years, one of which was Par Funding.

Precedent cited by the government

According to the motion, Berlin’s conduct -- including filing motions and participating in litigation -- falls within duties comparable to those of a prosecutor, which courts have historically protected from civil liability. The brief also argues that existing legal precedent forecloses constitutional claims against federal officials in this context.

Jurisdictional challenges were also raised. The government contends the Pennsylvania-based court lacks personal jurisdiction over Berlin, a Florida resident whose actions in the case occurred in connection with proceedings in a Florida federal court.

"Berlin never went to Pennsylvania for this case, including for the August 2020 remote deposition of Plaintiff," the government's memo says. "And despite Plaintiff’s conclusory allegation that Berlin was assigned to 'lead' the underlying investigation ... the SEC’s press release confirms that Berlin was not an investigator."

The underlying SEC case, filed in July 2020, accused Vagnozzi and others of securities law violations related to Par Funding. A federal judge granted emergency relief, including a temporary restraining order and the appointment of a receiver to oversee certain business entities.

Vagnozzi later settled with both the SEC and the court-appointed receiver.

Par Funding and founder Joseph LaForte were the primary targets of the years-long SEC investigation. Authorities say LaForte hid past felony convictions [for a prior Ponzi scheme and illegal gambling operation] and his true role in the company from investors.

Founded in 2012, Par Funding portrayed itself as a legitimate alternative lender that provided high-interest, short-term working capital to small and mid-size businesses that couldn't qualify for traditional bank loans.

The company raised over $500 million from more than 1,600 investors by selling unregistered securities and promising annual returns of 10% or more.

Government: Claims don't hold up

Government attorneys argue that Vagnozzi's claims fail as a matter of law, pointing to established procedures that allowed Vagnozzi to challenge the SEC’s actions during the original case, including the opportunity to seek dissolution of the restraining order and contest the receivership.

The motion also disputes allegations of misconduct, stating that the SEC’s enforcement action was supported by detailed filings and judicial findings, and that Vagnozzi has not plausibly alleged false statements or lack of probable cause.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.