Amateur Ponzi uncovered
With Madoff in our minds, it is still interesting to hear about a $50 million Ponzi scheme? Almost an amateur set up you would think. Why not go for gold and ‘make no small plans’? The Securities and ExchangeCommission has charged a Philadelphia-area investment fund manager and his firm for conducting a multi-million dollar Ponzi scheme, and has obtained an emergency court order freezing their assets. According to the SEC’scomplaint, Joseph S. Forte of Broomall, Pa., fraudulently obtained anestimated $50 million from as many as 80 investors through the sale of securities in the form of limited partnership interests in his firm, JosephForte, L.P. The SEC alleges that Forte told investors that he would invest the funds in an account that would trade in securities futures contracts,including S&P 500 stock index futures. According to the complaint, despitethe impressive and consistent returns he reported to investors, Forteconsistently lost money in the limited trading that he did, withdrewmillions of dollars in so-called fees for his personal use based on thefalsely inflated value of Forte LP, and used investor funds to repay other investors.
Again, the economic downturn stopped the inflow of cash, resulting in the Ponzi wheels to stop turning. A lot of fraud has been detected lately and a lot more fraud will be unvealed…..
http://www.sec.gov/news/press/2009/2009-5.htm
