Monmouth County Man Sentenced to 63 Months in Prison for Multimillion-Dollar Accounts Receivable Factoring Scheme

DOJ Press

TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 63 months in prison for defrauding lenders of $50 million dollars in connection with an invoice factoring scheme perpetrated over nearly a decade, U.S. Attorney Philip R. Sellinger announced.

Vincent Galano, 60, of Oceanport, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Zahid N. Quraishi to an information charging him with one count of wire fraud. Judge Quraishi imposed the sentence today in Trenton federal court.

According to documents filed in the case and statements made in court:

Accounts receivable factoring, also known as invoice financing (factoring), is a financial transaction through which a company obtains cash by selling its unpaid invoices, ordinarily at a discount, to a factor. Factoring clients send their debtors notices of assignment naming the factor as the assignee of the debt owed on the invoices. The factor collects invoiced amounts owed by the clients’ debtors and, upon collection of the entire invoiced amount, pays its clients the balance of the invoice, deducting the factor’s fees.


Galano formed PF Funding LLC (PF Funding) in 1996 for the purpose of factoring accounts receivables for various corporate clients. In 2007, PF Funding entered into a secured lending relationship with a single purpose entity created to finance PF Funding’s factoring business. Shortly thereafter, the factoring lender established a line of credit as a means to provide PF Funding capital to grow its receiveables portfolio. Over the next several years, PF Funding grew its factoring business by drawing from the line of credit while maintaining as current its loan obligations to the factoring lender. However, beginning in 2011, Galano, through PF Funding, purchased increasingly greater numbers of invoices for which he was unable to collect the debt owed on the receivables. To justify PF Funding’s continued draws from the line of credit, Galano concealed this bad debt from the factoring lender by misrepresenting the bad invoices as collectible on reports he routinely provided to the factoring lender. In other instances, Galano mischaracterized invoices that had already been paid and collected as outstanding and capable of being factored, in essence double-counting to drive up the outstanding receivables. In the reports provided to the factoring lender, Galano manipulated the overall value of PF Funding’s portfolio of outstanding invoices in an amount proportional to the funds he needed to draw from the unsecured line of credit to maintain as current the principal and interest payments on his outstanding loans.   


Engaging in this pattern of misrepresentation over nearly a decade, by 2020 PF Funding had ultimately defaulted under its loan obligations, owing approximately $50 million to its lenders by virtue of the scheme. During a May 2020 telephone call with his lenders, Galano admitted that he had concealed significant losses suffered by PF Funding over many years. He admitted that he had routinely distributed to lenders over that prolonged period fabricated reports that overstated the number and value of outstanding invoices which the reports represented as payable.   

In addition to the prison term, Judge Quraishi sentenced Galano to two years of supervised release and ordered him to pay restitution of $50 million. 

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Office’s Criminal Division in Trenton.

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