Prosecutors on Wednesday charged Monroe Beachy of Sugarcreek, Ohio with defrauding thousands of fellow Amish community members in an alleged Ponzi scheme.
The Cleveland Plain Dealer reports that the allegations have earned the 77-year-old Beachy the nickname "the Amish Bernie Madoff."
Beachy faces one count of mail fraud, and is expected to turn himself in to authorities on Friday. If convicted, he faces up to 20 years in prison.
According to the Plain Dealer, Beachy had raised an estimated $33 million from 2,600 investors since 1990. Prosecutors say the investors included widows and retirees, children, a Mennonite church, and a school cookbook fund. Beachy declared bankruptcy in 2010, and by the time the SEC charged him with fraud in February, he is said to have lost $16.8 million 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 were fictitious, Dettelbach said.
In reality, Beachy and his company, A&M Investments, had lost nearly all of his investors' money by 1998 in speculative investments such as risky stocks, mutual funds and junk bonds. But he continued to solicit investments from new investors, investigators said, and used the money to repay earlier investors -- a so-called Ponzi scheme similar to that operated by the infamous Bernard Madoff, which had cheated investors out of an estimated $18 billion by the time he was caught in 2008.
Beachy had access to his investors through his position as treasurer of the Amish Helping Fund. He has a 10th-grade education, and learned about finance through classes at H & R Block.
U.S. Attorney Steven Dettelbach said Beachy's victims suffered an average loss of $13,000.
“This is fraud on a massive scale,” Dettelbach said in a statement. “This defendant took advantage of people’s trust in him and squandered the life savings of hundreds upon hundreds of families.”