CLEVELAND - An Ohio man has been charged with defrauding fellow Amish in 29 states out of nearly $17 million by moving their money from safer securities to riskier investments subject to market fluctuations, federal prosecutors said Thursday.
Monroe Beachy, owner of A&M Investments in Sugarcreek in northeast Ohio, was charged in a one-count mail fraud indictment filed late Wednesday in U.S. District Court.
The 77-year-old Beachy said by phone Thursday that he was unaware of the indictment and had no comment.
Nearly 2,700 people and entities, including an Amish community loan fund, lost about $16.8 million since 2006, the indictment said. Beachy routinely mailed false investor statements, it said.
"These representations were false and made to lead investors to believe they were earning interest and had an account balance that was over-inflated compared to actual assets of A&M Investments," the indictment said.
Beachy had promised to put investor money into safer mortgage-backed securities but instead placed the money in stocks, mutual funds and bond funds that had more risk, the indictment said.
They "were not the `safe' investments as reported to his clients or investors," the indictment said.
Mail fraud is punishable by up to 20 years in prison. U.S. Attorney Steven Dettelbach said any sentence would be decided by a judge based, in part, on the loss and the defendant's background.
Dettelbach said at a news conference that the case highlighted the "all too often" risks of affinity fraud involving trusting investors from a group with similar ethnic, religious or personal backgrounds.
He stopped short of saying whether Beachy had personally profited but noted that Beachy had made a living for years offering investor services to the Amish.
Dettelbach and Stephen Anthony, head of the FBI in Cleveland, said the case demonstrated that investor fraud extends beyond Wall Street.
A&M Investments filed for bankruptcy protection in June, listing about $33 million in liabilities and nearly $18 million in assets. Members of Mennonite and Amish communities who lost money recently asked a bankruptcy judge to let them settle the matter out of court.
Members of the Plain Community said Beachy has "accepted the counsel of his church" and wants to dismiss the bankruptcy filing. He is a member of an Amish church near Sugarcreek.
The proposal said Beachy "breached the trust of his fellow Amish and Mennonites by moving from the Plain Community's environment of trust and mutual aid" and taking the matter to bankruptcy court.
The plan calls for disbursing some assets to creditors and for volunteers to contribute money to help those in most need. The plan also suggests dealing equitably with investors outside the community.
The attorney representing Beachy in the bankruptcy case couldn't be reached for comment Thursday. A message was left at her office.