Truth Tracker: Dean Vagnozzi (Part 2)


Dean J. Vagnozzi, CEO of A Better Financial Plan Capital Management, LLC claims he is the most ethical investor in the business, despite his history of financial negligence. Part one of this Truth Tracker investigation highlighted multiple instances where this claim would come into question. Included in that article were the enforcement order issued by the Department of Banking and Securities, his defense as a licensee in bankruptcy court, and his interactions with clients. In an attempt to expand on his interactions, Retirement Media, Inc. sat down with a client of A Better Financial Plan to shed light onto the dealings of Vagnozzi and his business.

John Doe, a resident of Pennsylvania met with Vagnozzi’s staff to invest a large sum of money after hearing about A Better Financial Plan’s enormous returns. As a retired individual, he was seeking high-growth investments  and decided to put Vagnozzi’s method to the test. After discussing the outlines of the deal, Vagnozzi guaranteed a 10% annual return and full repayment of principal once the contract matured. This is not a deviation from prior rhetoric from Vagnozzi’s business as he is currently advertising 10%-14% returns on The investment being advertised on that website is merchant cash advances. 

According to Doe, his monthly earnings are derived from interest paid on merchant cash advances. As discussed in part one, merchant cash advances or MCAs, are given to small businesses attached with high interest payments of 35% or more. The client went on to explain that after he makes his investment, A Better Financial Plan lends the funds to a Philadelphia based company that then issues the MCAs. When asked if he knew what company was working with Vagnozzi, he stated that he was unaware. Further, after the small business receives the advance they must pay back the loan along with interest. This 35% interest payment “legitimizes the 10% [annual interest payments] to prospective customers,” said Doe.

Thus, the money travels from the investor (lender) to Vagnozzi’s company (borrower), which then lends the money again to an unknown Philadelphia based company who hands out the merchant cash advances. Once the money is repaid along with the interest, that money funnels its way back through the unknown company to Vagnozzi, which he then uses to deposit the investor’s monthly interest payments. There is sufficient evidence however, to believe that the Philadelphia based company is Par Funding – the business that is associated with Vagnozzi who received an enforcement order for the sale of unregistered securities. This process was not outlined in the client’s contract and further, Doe stated that he was not informed about who manages the money after it gets invested. The only information the client has about his investment is contained in his contract, stating that he will receive a 10% annual return along with full repayment of principal once the contract matures.

In his meeting with A Better Financial Plan, Doe stated that merchant cash advances were the only investment opportunity being promoted by Vagnozzi’s staff. Further, the only information Doe gathered about other investments were from leaflets around the office. While in the meeting he recalled a powerpoint presentation being used to quickly explain the details of the investment while adding, “[I received] no physical paperwork other than my contract.” While the entire encounter was professional, Doe stopped short of calling it informative. Following the meeting, Doe was informed that his contract was backed by Allianz, in the event of default. When he requested a copy of the policy to read he was denied. Instead, he was told to come and read the policy in their office.

The contract that Doe referred to is a promissory note issued by one of the several income funds incorporated in Delaware, but doing business in King of Prussia at A Better Financial Plan. Doe explained that even though he wrote a check to one of the funds, he did not know its purpose. “At worst, the contract is potentially misleading,” Doe said, but remains confident in his investment.

Doe’s contract also consists of an unsecured promissory note which states that it is not registered with the Securities and Exchange Commission, nor with the State of Pennsylvania.  The Pennsylvania Department of Banking and Securities states that, “[S]mall businesses that want to issue stock or debt and do not qualify for an exemption must register the security with the Department. ” They go on to say, “The business may not make offers or sales of securities in Pennsylvania until the offering has been cleared by the department.”

With that said, Vagnozzi is exempt from registering the securities he sells with the SEC and Pennsylvania due to Rule 506 of Regulation D. He is also exempt from being a registered broker due to the same rules as discussed in part one. Vagnozzi was previously fined by the Department of Banking and Securities for not being a registered agent and selling unregistered securities. The order levied a fine of $490,000 against Vagnozzi. When the client learned of this, he was alerted, but not dismayed about the 2019 enforcement order. Doe maintained that Vagnozzi’s staff claimed the enforcement was due to a large gray area in the regulation of securities.

While Vagnozzi is exempt from registering his securities with the state and exempt from being a registered issuer, the process that Doe described raises a few red flags. First and foremost, the client was only presented with one investment option and received no physical paperwork explaining the details of his investment. Doe was also denied the ability to read the policy that protects his plan unless he were to physically come to A Better Financial Plan’s headquarters. The fact that the client was not aware of who manages his money after he invested is troublesome to say the least. At the end of the day, Dean Vagnozzi seems to have corrected past wrongdoing despite his behind closed doors tactics.