Criminal fraud defendant also faces civil lawsuits

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Paul Paredes, a Rochester man already facing federal fraud charges, is now being sued in two civil complaint by alleged victims in the criminal case.

Earlier this month, Paredes was charged in U.S. District Court with wire fraud, money laundering and aggravated identity theft.

Paredes allegedly fraudulently obtained loans using the financial information of other companies and individuals who initially hired him for legitimate business purposes.

If convicted, Paredes, 52, could be sentenced to a mandatory minimum penalty of two years in prison and a maximum of 20 years and a $500,000 fine.

Paredes was originally scheduled to be in court on Oct. 18 for a detention hearing, but that was delayed because federal immigration officials have asked to have him detained.

The U.S. Attorney’s Office declined to comment on the case.

Just before he was criminally charged, a civil complaint was filed against him in state Supreme Court by Channel Partners Capital LLC, a finance company, which Paredes allegedly defrauded out of $2 million.

“In sum and substance … Paredes defrauded at least one financial lending company out of approximately $2 million over an approximately six-month period in 2022 and used the identities of dozens of business owners in furtherance of this scheme,” according to the affidavit of an FBI agent.

Channel is represented by Rochester attorney Joseph M. Shur.

According to the affidavit, the criminal investigation has uncovered evidence of similar conduct by Paredes against other victim loan companies.

Another civil complaint, filed Friday by the owners of Custom Teez, a store located in Greece Ridge Mall, is asking for $4.4 million in damages and $10 million in punitive damages.

According to the lawsuit, the FBI confirmed that Custom Teez is one of the victims in the criminal case against Parades.

The lawsuit accuses Paredes of identity theft, fraud, emotional distress, and breach of contract.

The Custom Teez owners are represented by Rochester attorney Jason Bost.

Paredes owns and operates J&E Business Consulting LLC, which provides merchant services to businesses, including acting as a broker between credit card processing companies and small retail businesses.

In the criminal case, Paredes is accused of fraudulently submitting loan applications under the identities of his business customers to arrange for the loan money to be given to J&E for equipment it had supposedly sold to the business customers.

To prevent detection, Paredes provided alternate email addresses, phone numbers, and bank accounts that he controlled to intercept any inquiries from the victim finance company, according to the affidavit.

According to the most recently filed civil complaint, J&E Consulting was hired to provide credit processing services to Custom Teez.

The store was provided with credit card processing hardware and linked to American North Bank, which provided credit card processing.

From 2012 until March of 2023, ANB processed all Custom Teez credit card transactions and ANB received a percentage of each transaction through automatic withdrawals from the bank account of Teez.

Paredes asked each of the owners for personal information claiming it was needed for the ANB account. He also told the owners he needed their personal information because he knew of another company that might be able to provide the same services as ANB but at a cheaper rate.

“Paredes specifically asked victims to verify their social security numbers, bank account information, personal mailing addresses, and other individually identifying information,” according to the complaint.

“Paredes would also slip in questions during casual conversations which in retrospect were all questions that could be asked by a bank or lender while trying to verify one’s personal identity,” according to the suit.

In March 2020, Paredes told the owners that he found a new company that can process all credit card transactions for a flat fee of $450 per month and the owners signed a contract for the new service.

On the 15^th of each month, $450 was automatically deducted from the store’s bank account and transferred to companies the owners didn’t recognize.

Despite switching to the new alleged credit processing company, ANB still deducted various amounts from the store’s bank account.

The owners questioned Paredes and he claimed it was a mistake and the money would be sent to the store account from ANB.

Custom Teez owners were contacted by several companies claiming they owed thousands of dollars for loans, equipment, or services, that were actually the result of fraudulent activity by Paredes, according to the suit.

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