The easy analogy is to the crimes of Ponzi schemer Bernard Madoff, who stole billions of dollars from the investors who trusted him with their money.
But the story of Monroe Beachy, a 77-year-old Amish man from Ohio who over about 25 years lost nearly half of the $33 million that 2,600 people entrusted to him, has both sharp similarities with and huge differences from the Madoff saga.
As the Courthouse News Service and The Washington Post have reported, Beachy is accused of fraud because he told investors that their money was going into safe, secure government securities — when in fact he was pouring much of it into far riskier investments and then lying about the losses he was racking up. The Securities and Exchange Commission's complaint against him is posted here.
But Beachy's personal assets, the Post says, were along the lines of "a horse, buggy and harness." Not quite the extravagant lifestyle that Madoff led.
In fact, if you read through that SEC complaint, you don't see accusations that Beachy personally profited.
He told the Post yesterday that the whole mess "was not intentional."
Another interesting part of the story is how the Amish community is reacting. At the Post's On Faith blog, Elizabethtown College senior fellow Donald Kraybill writes that:
"Members who commit religious transgressions are held accountable by the church. If they confess their wrongdoings they are forgiven and pardoned. The recalcitrant face excommunication and subsequent shunning. Beachey has cooperated with the church and confessed his wrongdoing. As long as he shows remorse and continues to cooperate he will not face excommunication. Nevertheless he will be held accountable for financial restitution to the creditors. ...
"He has been cooperative with church and legal authorities. He faced an August 2010 meeting of hundreds of creditors who had lost millions of dollars but did not need bodyguards for protection. The meeting opened with prayer and a Scripture reading leading one of the five sheriffs deputies to exclaim, 'what exactly are we doing here in a church meeting?' "
The local Times-Reporter in New Philadelphia, Ohio, has been following the Beachy story for months. It notes another interesting wrinkle to the case: Beachy had filed to put the investment firm into bankruptcy — an action opposed by others in the New Order Amish community because members believe "that participation, regardless of how minimal, in judicial and other litigation practices are strictly prohibited by Scripture." Not all the investors, though, were Amish.
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