Delaware County Man Sentenced to 15 Years for Multi-Million Dollar Investment Scheme

PHILADELPHIA—Joseph S. Forte, 54, of Broomall, PA, was sentenced today to 15 years in prison for wire fraud, mail fraud, bank fraud, and money laundering in connection with a multi-million dollar Ponzi scheme, announced United States Attorney Michael L. Levy. Between 1996 and 2008, Forte collected investment money from 91 individuals and entities using a fraudulent scheme in which the defendant falsely claimed that he was profitably trading in S&P 500 stock index futures contracts through a partnership named Joseph Forte LP. Forte admitted to diverting millions of dollars of investor funds to pay some investors “returns” on their investments by using money contributed by other investors.

Forte consistently claimed that his trades were profitable, reporting fabricated investment returns between 18 percent and 38 percent, when in fact, Forte consistently lost money on his trades. Despite the partnership’s actual losses, Forte was able to continue raising money from new investors by falsely reporting high return rates. Forte employed a two step process for misleading his investors. On a quarterly basis, he sent to an accountant e-mail messages containing false representations about his trading activity, the status of the investors’ investments, and the worth of the partnership. At Forte’s instructions, the accountant then sent the investors, via U.S. mail, quarterly investment statements that were created based on Forte’s misrepresentations. The information further alleges that Forte paid himself millions of dollars in salaries and fees and used his profits to make numerous financial transactions and induced Commerce Bank to loan him nearly $500,000 by misrepresenting the value of Joseph Forte LP.

In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered Forte to pay restitution in the amount of $34,865,554, and serve five years of supervised release. Judge DuBois also ordered an additional money judgement in the amount of $34,865,554.

The case was investigated by the United States Postal Inspection Service, the Federal Bureau of Investigations, the Delaware County District Attorney’s Office, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. It is being prosecuted by Assistant United States Attorney Joe Khan.