by Staff Writer on September 16, 2011
Members of the Amish community traditionally have settled their scores independent of secular society, but the federal legal system will decide the fate of Monroe Beachy, 77, of Sugarcreek, Holmes County.
Beachy was charged (pdf)Wednesday with defrauding thousands of his fellow Amish farmers, carpenters and neighbors of tens of millions of dollars in an alleged Ponzi scheme that has earned Beachy a nickname: The Amish Bernie Madoff.
Beachy, who has a 10th-grade education, acquired much of his financial knowledge from classes at H&R Block. He declared bankruptcy in 2010. He faces one count of mail fraud, and was expected to surrender to federal authorities by Friday.
U.S. Attorney Steven Dettelbach will hold a news conference at 2 p.m. today in Cleveland to detail the charges.
Since 1990, Beachy raised an estimated $33 million from more than 2,600 investors — many of them fellow members of the Amish community who reside in this pastoral locale about a two-hour drive south of Cleveland.
When the Securities and Exchange Commission charged Beachy with fraud in February, the agency said he had lost nearly half of his investors’ money.
Beachy had assured his investors that their money was safe, earning higher returns than banks in U.S. government securities, and he issued periodic statements that government officials allege were fictitious.
In reality, Beachy had lost nearly all of his investors’ money by 1998 in speculative investments such as stocks, mutual funds and junk bonds, officials said. But he continued to solicit investments from new investors, which he used to repay earlier investors — a so-called Ponzi scheme similar to that operated by the infamous Bernard Madoff, which lost an estimated $18 billion in 2009, according to investigators. It was the largest loss in history and earned Madoff a sentence of 150 years in prison.
Since Beachy’s bankruptcy filing, Sugarcreek’s Amish community has been in turmoil, with many victims upset at being dragged into court rather than resolving the case among the Plain People themselves.
Some of Beachy’s creditors argue that forcing them to pursue claims through the court would be a violation of their religious freedom.
Chessnwine, ibankcoin, September 15, 2011