Tuesday, February 15, 2011
The SEC announced that it filed charges in the United States District Court for the Northern District of Ohio against Monroe L. Beachy, a 77-year-old Amish man from Sugarcreek, Ohio, who allegedly targeted his fellow Amish as investors in his fraudulent offering of securities that raised more than $33 million. According to the SEC, from as early as 1986 through June 2010, Beachy, doing business as A&M Investments, raised money from more than 2,600 investors through the offer and sale of investment contracts. Beachy enticed investors by promising interest rates that were greater than banks were offering at the time. Many of Beachy’s investors treated their investment accounts with Beachy like money market accounts, from which they could withdraw their money at any time. Beachy told his investors that their money would be used to purchase risk-free U.S. government securities, which would generate returns for the investors. In reality, Beachy used the money to make speculative investments in high yield (junk) bonds, mutual funds, and stocks.
Beachy filed for Chapter 7 bankruptcy on June 30, 2010, and his assets are currently under the control of a Chapter 7 bankruptcy trustee appointed by the bankruptcy court. Beachy has agreed to settle the SEC’s charges without admitting or denying the allegations. The SEC’s proposed judgment does not impose a civil penalty based on Beachy’s financial condition.
The settlement is subject to the approval of the United States District Court for the Northern District of Ohio.