Thursday, February 17, 2011

Trusting Amish Out Millions

by Gary Snyder

Monroe Beachy is a 77-year-old Amish man who built up much trust with the Amish people. Beachy spent a quarter-century raising $33 million from 2,600 investors, the overwhelming majority of them fellow members of the Amish community. But Beachy's investment approach allegedly had more in common with the timeless methods of Charles Ponzi and Bernard Madoff. He became treasurer of the Amish Helping Fund, a nonprofit that takes in money from investors and makes loans "in an effort to preserve the Amish way of life," the group said in a court filing. They entrusted him with $2.6 million for the charity. It all collapsed last year when Beachy filed for personal bankruptcy. He said he had lost nearly half of his investors' money. It turned out that he had been running a Ponzi scheme, a bankruptcy trustee alleged, and that he had put the money into speculative investments. As early as 1998, Beachy was insolvent, but he continued to solicit investments from new investors to repay earlier ones, the trustee said. The SEC is investigating.
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