Authorities announced that an Ohio man was charged with operating a massive Ponzi scheme than spanned two decades and defrauded thousands of Amish victims of over $30 million. In an indictment unsealed Wednesday, Monroe Beachy, 77, was charged with one count of mail fraud in connection with the scheme. Beachy, who did not graduate high school, is alleged to have acquired his financial knowledge from classes at H&R Block. He is expected to surrender to federal authorities by Friday.
From at least 1990 through June 2010, Beachy solicited primarily Amish investors through his company A&M Investments. Beachy promised potential investors that their principal would remain safe and promised a stream of constant annual returns. Investors were told that their funds would be invested in Ginnie Mae Bond Funds, a type of mortgage-backed security issued by the Government National Mortgage Association and guaranteed by the United States government. To assure investors of the legitimacy of his operation, Beachy provided investors with fictitious monthly statements showing their account balances and accruing interest. Authorities estimate that approximately 2,698 people and entities invested $33 million with Beachy. Yet, instead of investing in bonds, Beachy allegedly sustained heavy losses investing in risky stocks and junk bonds. Total losses are estimated at nearly $17 million.
If convicted of the charge of mail fraud, Beachy faces a maximum prison sentence of twenty years in prison, along with criminal fines, and will likely be ordered to pay restitution to his victims.
A copy of the indictment is here.