"Amish Bernie Madoff" Sentenced to 6.5 Years in Prison

An Ohio man dubbed the "Amish Bernie Madoff" convicted of swindling thousands of investors, mostly members of the Amish community, out of nearly $17 million was sentenced to spend 6.5 years in federal prison.  Monroe Beachy, 78, had pled guilty in March, and faced a recommended sentence of 12.5 to 15.5 years in prison under federal sentencing guidelines.  However, it seems that a campaign by Beachy to seek forgiveness from each of his victims through written letters may have swayed United States District Judge Benita Pearson, who acknowledged receiving seventy-five letters from victims asking to forgive Beachy, while only two victims sought a prison sentence.  However, Judge Pearson rejected Beachy's request for home confinement, stating that "There can be no carve-out because you belong to a religious community that I respect."

Beachy was arrested in September 2011 after authorities uncovered evidence of a Ponzi scheme involving the Ohio Amish community spanning several decades.  According to the indictment, Beachy solicited primarily Amish investors through his company A&M Investments.  From 1990 to 2010, potential investors were assured that their principal would remain safe, and that they could expect a stream of constant annual returns.  Beachy told investors 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.  Investors were provided with monthly hand-written account statements showing continuing growth in their accounts.  In total, 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.  Authorities estimated that total losses from the scheme at roughly $16.8 million.

One factor that set the case aside from frauds of similar proportion was the acknowledgement by both the Government and Beachy's attorney that no evidence existed showing that Beachy diverted any investor funds for his own personal gain.  Beachy's lawyer noted that Beachy and his wife continued to live in a modest farmhouse during the scheme.  However, viewed in light of typical Amish traditions of modesty and frugality, the distinction is perhaps more understandable.

A copy of the indictment is here.