Philadelphia, PA – Joseph S. Forte, of Broomall, Pennsylvania, was permanently barred from trading commodity futures and options after admitting to operating a $50 million Ponzi scheme, the Commodity Futures Trading Commission (CFTC) announced October 8, 2009. The federal court in Philadelphia entered a consent order outlining the injunction and future penalties.
The CFTC initially filed its enforcement action in the U.S. District Court for the Eastern District of Pennsylvania on January 27, 2009. Forte defrauded at least 76 individuals and entities by soliciting funds for a commodity futures pool, falsely claiming a successful trading history. From February 1995 through December 2008, Forte misappropriated pool funds and ran the fraudulent scheme, according to the consent order.
Forte falsely presented himself as a skilled commodity trader, promising high returns on investments in S&P 500 stock index futures, foreign currency futures, and metals futures. However, the CFTC found that Forte was not a successful trader and sustained net losses of at least $3 million while trading on behalf of the pool. For a period of 34 months between 2004 and 2007, he engaged in little to no trading at all.
Despite the lack of legitimate profits, Forte issued false statements to investors, reporting annual gains of 20 to 36 percent and claiming the pool’s value had reached over $154 million. He allegedly paid himself between $10 and $12 million in fees and used approximately $15 to $20 million of investor funds to pay off earlier investors and cover business expenses – hallmarks of a Ponzi scheme.
In addition to the trading ban, Forte is prohibited from soliciting funds for trading, registering with the CFTC, and acting as a principal, agent, or employee of a CFTC registrant. The court-appointed Receiver, Marion A. Hecht, will determine the specific amounts of restitution owed to defrauded pool participants and the civil monetary penalty Forte must pay.
Forte also pleaded guilty in a related criminal action, United States v. Forte, in the Eastern District of Pennsylvania on June 5, 2009. The Securities and Exchange Commission also pursued a separate action against Forte, resulting in a Partial Final Judgment on September 29, 2009.
Source: CFTC.gov
Related Federal Cases
- Gerardo Heriberto Nuñez Nuñez, Elder Fraud Scheme, Boston MA, 2026 · Washington
- Christopher Furman, Wire Fraud and Money Laundering, Pennsylvania 2009 · California
- Christopher Furman, Wire Fraud and Money Laundering, Pennsylvania 2009 · Pennsylvania
- Emily Wilson, Investment Adviser Fraud, Pennsylvania, 2023 · Virginia
- No Defendant Name Found, Bank Fraud Scheme, USA, 2022 · New York
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News