Mini Madoff in Philly : An investment manager ran a Ponzi scheme that swindled an estimated $50 million from as many as 80 investors, federal authorities charged.
PHILADELPHIA — An investment manager ran a Ponzi scheme that swindled an estimated $50 million from as many as 80 investors, federal authorities charged.
Joseph S. Forte, 53, of Broomall, Pa., was given the money to invest between 1995 and 2008, the Securities and Exchange Commission said Thursday. Through his firm, Joseph Forte LP, he either lost it playing the market or didn't invest it at all, authorities said.
Meanwhile, Forte was telling his investors that he was making huge profits, investigators said. His portfolio in September reported a value of more than $150 million but its trading account contained less than $147,000, according to an SEC complaint filed Wednesday.
The commission said Forte admitted using as much as $20 million in investor funds to repay other investors and withdrawing up to $12 million in so-called fees for his own use. Investigators said account statements provided to Forte LP investors show he actually pocketed $28 million.
Forte, who is charged with fraud and related counts, did not return messages left by The Associated Press.
The investors thought their money was going into a commodity futures pool that traded in securities futures contracts, including S&P 500 stock index futures. The SEC said Forte admitted falsifying investment returns from the beginning.
Many of the alleged victims of the scheme were Forte's friends and acquaintances, said Daniel M. Hawke, director of the SEC's Philadelphia Regional Office.
"Using other people's money, Forte promised and reported outrageous returns over more than a 10-year period," Hawke said, "and because of his relationships with investors was able to lull them into trusting him with their funds."
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