The Securities and Exchange Commission has charged a 77 year-old Amish financial adviser with defrauding his fellow Amish in an investment scheme that allegedly went on for 24 years.
The Securities and Exchange Commission has charged a 77 year-old Amish financial adviser with defrauding his fellow Amish in an investment scheme that allegedly went on for 24 years.
From 1986 through June 2010, Monroe L. Beachy, who until June ran Sugarcreek, Ohio-based A&M Investments, raised $33 million from more than 2,600 investors — most of whom were Amish, according to the SEC complaint. Mr. Beach allegedly told investors that their money would be used to purchase risk-free U.S. government securities. Instead, he made speculative investments and lied about it, according to the complaint, which was filed Feb. 15 in the U.S. District Court for the Northern District of Ohio.
Mr. Beachy filed for bankruptcy in June 2010. Up until that point, the SEC claims, he lied about how he was investing his clients' money. The commission said, “Beachy also never told his investors that he had experienced significant losses on the underlying investments.” Rather, he “provided his investors with monthly account statements that showed fabricated gains,” the SEC said.
By the time Mr. Beachy filed for bankruptcy in June 2010, less than $18 million of the original $33 million of investor money remained.
Mr. Beachy, reached at his home, declined to comment.
Because of the length of Mr. Beachy's alleged scheme, generations of families were affected because older generations of Amish investors referred their children to him. “Amish children did in fact purchase investment contracts from Beachy,” according to the complaint.
Mr. Beachy has agreed to settle the SEC's charges without admitting or denying the allegations, according to an SEC notice about the complaint. The SEC is not imposing a civil penalty on him, based on his financial condition, according to the agency's notice.
