The US Government moved to clamp down on fraudulent Ponzi schemes in the wake of the $50 billion (£33 billion) Bernard Madoff scandal, by charging two men for allegedly operating two similar schemes.

The US Securities and Exchange Commission (SEC) charged a fund manager based in the Philadelphia area with operating a $50 million Ponzi scheme, in which he paid off early investors with money from later investors.

In a joint filing, the SEC and the Commodity Futures Trading Commission allege that Joseph Forte, 53, reported consistently strong results to as many as 80 investors even though he routinely lost money, withdrew millions of dollars in personal fees and used recent investors’ contributions to repay earlier backers.

In a separate case, the SEC and the Department of Justice charged Richard Piccoli, an 82-year-old, with running a Ponzi scheme through his companies, Gen See Capital Corp and Gen Unlimited. Mr Piccoli, of Williamsville, New York, raised most of his money from clergy, Catholic parishioners, senior citizens and cemetery funds, many of them recruited through advertisements in Catholic newspapers.

US authorities are keen to be seen to be tackling Ponzi schemes to help to restore confidence among investors, which is fragile as a result of the housing crisis and the credit crunch, in the wake of the Madoff scandal.

They are expected to follow these charges with others as the publicity surrounding the Madoff scandal combines with the increasing scrutiny of potentially similar schemes to flush out further fraudsters.

Joel Cohen, the deputy head of Clifford Chance’s litigation and dispute resolution practice in New York, said: “It’s consistent with previous times when markets are down. The rocks get exposed when the tide has washed away.”

Mr Forte, who is based in Broomall, Philadelphia, has reported annual returns of between 18.5 per cent and 38 per cent since 1995, claming that the profits came from successfully betting on the direction of the Standard & Poor’s 500 index, the complaint said.

In fact, Mr Forte consistently lost money as he racked up trading losses of $3.3 million on the portion of the money he invested, He also withdrew for himself $23.1 million he received from investors , the complaint alleges.

Mr Piccoli’s scheme, which promised to deliver annual returns of at least 7.1 per cent from investing in high-quality residential mortgages, allegedly has taken at least $17 million from investors since 2004. Records show no property transactions, the complaint said.

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