Philadelphia-area fund manager Joseph Forte was charged by U.S. prosecutors with mail fraud over allegations that he ran a $50 million Ponzi scheme that bilked investors including a charity, church and private school, Bloomberg reported.
Forte, 53, duped around 80 investors about his fund's investment returns between 1996 and 2008, Acting U.S. Attorney Laurie Magid in Philadelphia said in an e-mailed statement today. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine, plus restitution to victims.
"Ponzi schemes such as this exploit the trust and hopes of investors," Magid said. "In these troubled economic times, the devastation caused to the victims cannot be overstated."
New York-based fund manager Bernard Madoff's alleged $50 billion Ponzi scheme has investors and regulators scrutinizing money managers like Forte, who claim to deliver consistently strong returns. The FBI has begun a manhunt for Arthur Nadel, the manager of several Florida-based funds who vanished last week. Investors said they may have lost as much as $350 million in Nadel's funds.
Forte, based in the Philadelphia suburb of Broomall, Pennsylvania, wasn't immediately available to comment.
The U.S. Securities and Exchange Commission sued Forte and his fund earlier this month over the Ponzi-scheme allegations. Unable to raise money to maintain payouts, Forte approached federal authorities in late December and admitted to the scam, SEC officials said.
