Pa. Fund Manager Charged In Ponzi Scheme

Jan 22 2009 | 12:26am ET

In these busy times for battling Ponzi schemes, the federal prosecutors have charged a Philadelphia-area fund manager with defrauding investors of $50 million.

The criminal mail fraud charges against Joseph Forte follow similar charges levied by the Commodities Future Trading Commission and Securities and Exchange Commission last month. According to the regulators, Forte approached federal authorities in December as his alleged scam fell apart and confessed.

Prosecutors say Forte ran his scheme between 1996 and last year, lying to his roughly 80 investors about the fund’s supposedly double-digit returns. In fact, the fund posted millions in losses on the little trading Forte did, according to prosecutors. Forte also allegedly lied to investors about the size of the fund, claiming more than $154 million in assets when his trading account had less than $150,000 in it.

“Ponzi schemes such as this exploit the trust and hopes of investors,” acting U.S. Attorney Laurie Magid said. “In these troubled economic times, the devastation caused to the victims cannot be overstated.”

In an affidavit filed with the charges, U.S. Postal Inspector George Clark said that Forte admitted he “falsely reported investment returns of up to 38 percent when, in fact, he regularly lost money in his futures trading.”

If convicted, Forte faces up to 20 years in prison and a $250,000 fine, as well as restitution to his victims.

RELATED STORIES

Philly Man Confesses To $50M Futures Ponzi Scheme


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.