The Securities and Exchange Commission today charged a 77-year old Amish man in Ohio with targeting fellow Amish investors in a fraudulent offering that raised more than $33 million.
According to the SEC, from 1986 until June 2010, Monroe Beachy doing business as A&M Investments, offered and sold investment contracts to more than 2,660 people, the vast majority of them Amish. He told his investors that their money would be used to purchase risk-free U.S. government securities and promised interest rates that were greater than banks were offering at the time.
In reality, Beachy used the money to make speculative investments in junk bonds, mutual funds and stocks.
The complaint, filed in the U.S. District Court for the Northern District of Ohio, alleged that he suffered significant losses in investor principal, which he hid from his investors. Beachy mailed his investors monthly account statements showing fabricated rates of return and exaggerated account balances.
Beachy filed for Chapter 7 bankruptcy protection on June 30, 2010, and his assets are currently under the control of a Chapter 7 bankruptcy trustee appointed by the bankruptcy court.
Beachy agreed to settle the SEC’s charges without admitting or denying the allegations and is permanently enjoining from violating the Securities Act of 1933 and the Securities Exchange Act of 1934.
According to the SEC, the settlement “does not impose a civil penalty based on Beachy’s financial condition.”