SEC Charges Accountant in Connection to Broomall Man's Multi-Million Dollar Ponzi Scheme

On Monday, July 11, the Securities and Exchange Commission (SEC) filed a settled civil action suit against accountant John N. Irwin and his consulting firm Jacklin Associates, Inc., in U.S. District Court in Philadelphia.

Irwin and Jacklin Associates had allegedly participated in a 13-year, multi-million dollar Ponzi scheme with Broomall resident Joseph Forte of Joseph Forte, LP, from at least February 1995 through December 2008, according to the SEC.

Forte, who was charged in May of 2009 for defrauding approximately 80 investors of more than $35 million, was sentenced later that year to 15 years in prison on the counts of wire fraud, mail fraud, bank fraud, and money laundering, according to the Federal Bureau of Investigation (FBI) Philadelphia Division.

The SEC states that through subsequent investigation and a confession made by Forte revealed that over 100 investors collectively invested over $75 million to Forte's firm.

The SEC claims Irwin and Jacklin Associates helped Forte in soliciting investors for the Broomall resident's Ponzi scheme. Irwin, through Jacklin Associates, had also apparently performed back office and bookkeeping functions for Forte LP, including creating and issuing to investors false quarterly statements and tax documents prepared based on the false information provided by Forte, said the SEC.

"In communicating the fraudulent information to investors, Irwin disregarded red flags that should have alerted him that the information that he was passing on was false," states the Commission in a press release. "Over the course of the fraud, Irwin, through Jacklin, received ill-gotten gains exceeding $5 million in purported fees and trading profits."

According to the SEC, Irwin and Jacklin Associates agreed to settle the Commission’s charges without admitting or denying the allegations in the Commission’s complaint.

Under the settlement, which is subject to the court’s approval, Irwin and Jacklin consented to a judgment permanently enjoining them from violating two subdivisions of Section 17 of the Securities Act of 1933. The amounts of civil penalties that both Irwin and Jacklin will have to pay for disgorgement and prejudgment interest will be determined at a later date, said the SEC. As part of the settlement, Irwin agreed on a suspension from appearing or practicing before the Commission as an accountant.