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	US Shuts "Ponzi" Scheme Targetting Priests By Robin Pagnamenta The Times January 9, 2009 http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5482228.ece The US Government has shut-down two new Ponzi investment scams, including a scheme involving an 82-year old alleged fraudster who targetted Catholic priests, cemetery funds and religious orders. The closure of the two schemes emerged as the fallout from the alleged $50 billion swindle perpetrated by Bernard Madoff, the New York fund manager, intensified. A Ponzi scheme, named after the swindler Charles Ponzi, is a fraudulent investment operation that pays abnormally high returns to investors out of money put into the scheme by subsequent investors, rather than from real profits generated by share trading. The Securities and Exchange Commission (SEC), the US regulator, and the Department of Justice, have accused Richard Piccoli of operating a $17 million fraud by advertising in Catholic newspapers. The 82-year-old New York resident promised to investors a 7.1 per cent annual return for a $5,000 investment, with a higher rate for larger investments, in his two companies, Gen See Capital Corp and Gen Unlimited. According to court documents, Mr Piccoli directed $600,000 from his businesses to himself and his children and boasted to potential investors that he had more than 50 priests as clients. In the other alleged fraud, the SEC and the Commodity Futures Trading Commission (CFTC) charged a Philadelphia fund manager with operating a similar, $50 million scheme. Joseph Forte, 53, has been operating since 1995 and had collected funds from as many as 80 investors, including at least one charity. The SEC claimed he had admitted to the Ponzi scheme late last month and that he did not have sufficient funds to repay investors. Mr Forte had reported annual returns of as high as 37.96 per cent but had in fact consistently lost money and had used new investor funds to make payments to existing customers. From January 1998 until October 2008, the Forte LP trading account posted net losses of about $3.3 million. Despite claiming that he was a succesful commodity trader, neither he nor his fund had ever been registered with the SEC. The SEC said it has obtained an emergency court order freezing all of his assets.
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