An elderly Ohio man has been labeled the "Amish Madoff" after the Securities and Exchange Commission accused him of losing $15 million of his neighbors' money in a duplicitous investment scheme reminiscent of the notorious Manhattan fraudster's. Here, a quick guide to the allegations:
Who is the "Amish Madoff?"
Monroe Beachy, a 77-year-old Mennonite from Sugarcreek, Ohio. Beachy is said to have collected $33 million from as many as 2,600 investors, many of them Amish, over 30 years, but lost more than $15 million of it in speculative investments such as junk bonds and dot-coms.
Why is he in trouble?
He told investors in his fund that he was only putting money in government-backed securities, and sent out quarterly statements assuring his clients they were making a profit. Just like Madoff, he gained a reputation as a "financial wizard," before going bankrupt in June last year. He claims the fraud was "not intentional."
Is it fair to compare him to Bernie Madoff?
Not exactly, says Mark Memmott at NPR. While Madoff lined his pockets with the billions of dollars he took from wealthy investors, Beachy does not look to have personally profited from his fraud. In fact, his personal assets amount to a horse, buggy and harness. "Not quite the extravagant lifestyle that Madoff led."
Will he be cast out of the Amish faith?
It's unlikely, says Donald Kraybill at The Washington Post. "Beachey has cooperated with the church and confessed his wrongdoing." If he shows sufficient remorse for his crimes, he will not be excommunicated. "Nevertheless, he will be held accountable for financial restitution to the creditors."
How might he be penalized?
The SEC is taking the fraudster to court to redistribute the remaining money in his fund, but his Amish creditors are not happy about it. Pursuing claims in court violates their faith, they say, and they would rather settle the matter privately.
Sources: New York Daily News, Washington Post, NPR, Daily Telegraph
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