Investment manager charged with fraud

Joseph S. Forte of Broomall is accused of defrauding investors of $20 million. He faces up to 80 years in prison and a $1.75 million fine, the U.S. Attorney's Office said.

U.S. Attorney Laurie Magid yesterday filed formal criminal charges against Joseph S. Forte, a Broomall investment manager who allegedly defrauded investors of $20 million in a scheme that collapsed late last year.

Yesterday's action followed a January filing of a criminal complaint against Forte, after he had confessed to authorities. That gave prosecutors time to refine their case.

Forte is now charged in federal court in Philadelphia with wire fraud, mail fraud, bank fraud, and money laundering. He faces up to 80 years in prison and a $1.75 million fine, the U.S. Attorney's Office said.

Civil charges were brought against Forte in January by the Securities and Exchange Commission and the Commodities Futures Trading Commission. Those were followed by the criminal complaint Jan. 20. Today's filing was an information, which often indicates that a guilty plea is likely.

The formal charges confirmed a $200,000 donation to a school in Malvern with money from illegal activity. The school was not named.

Forte, 54, was on the board of Malvern Preparatory School in Malvern until January. Forte was also strength coach for the school's football team. His son graduated from the school in 2007.

Asked for comment, Malvern Prep president Jim Stewart said: "We don't comment on the name of anyone who makes a donation or on the amount of a donation."

Since 1995, Forte attracted $80 million from 115 investors by convincing them he had devised a system to make money trading futures contracts on the Standard & Poor's 500 stock index under any market conditions, according to court documents.

In reality, he lost money. He told investors that their fund was worth $154.7 million on Sept. 30 when it was actually worth $150,000. Forte, who allegedly paid himself millions, said in January that he used most of the money he raised to pay off other investors.

Last fall, amid widespread financial turmoil and fallout from the $50 billion Bernard L. Madoff Ponzi scheme, Forte ran into trouble.

After an unsuccessful, last-ditch effort Dec. 19 to raise money to meet redemption requests, he confessed to fraud to a U.S. postal inspector, according to the inspector's affidavit.


Contact staff writer Harold Brubaker at 215-854-4651 or