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Investigator Exclusive: SEC investigating Amish investment fund

2:55 PM, Aug 11, 2010   |    comments
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More than 2,700 investors turned to A & M Investments to handle their money, with the understanding that it offered a steady return on the dollar.

They also liked the fact that A & M offered something other funds couldn't match: it was overseen by Monroe Beachy, a member of the Amish community.

"A lot of the people in the plain community invested money there because he was one of them," said Paul Weaver, whose in-laws invested in the fund.

"I wouldn't say (the return) was enormously high, but it was consistent."

But it all came crashing down on June 30, when A&M filed for bankruptcy protection.

"Everybody feels that trust has been breached," Weaver said.

It turns out, Beachy's fund had lost more than half of the $33 million clients gave him to safeguard. He never told a soul, continuing to take investments, even as he knew things were going sour.

"A gentleman went in a day or two before they closed and invested $82,000," said Holmes County Commissioner Jim Miller. "Gone."

Beachy filed for bankruptcy protection after learning that the SEC was investigating whether he defrauded investors, said Anne Piero Silagy, who was appointed by a federal judge to represent investors.

Federal authorities also want to know why A & M was not registered with the SEC.

Investors are likely to get only a third of their original investment, according to court estimates.

The SEC is also investigating another fund connected to Beachy. He was treasurer for the Amish Helping Fund, which loans money to help young Amish buy their first home or farm.

The Amish Helping Fund had also invested about $1.8 million in A & M, court records show.

Beachy declined to speak with Channel 3 News, saying: "I'm sorry. I'm not allowed to talk about it."

The bankruptcy is already taking its toll. One family told the U.S. Bankruptcy Court that they needed the money "for our medications," which they pay out of pocket.

Another said he planned "to use (it) for fixing the house." Several area churches, meanwhile, may lose hundreds of thousands.

"The heartbreaking thing is, some of these people were older and this was money they were going to use for retirement," said Miller.

"They're Amish widows. Amish ladies that have never been married. Single kids that have had money saved up to go to college. I know of one kid that had $12,000 saved up to go to college this fall."

Most investors wouldn't talk to us either, embarrassed by the situation. But Bishop Jake Beachy, of the New Order Church, who is Monroe Beachy's cousin and an investor in A & M, says his flock is being level-headed.

"Yes, it's serious and we all regret," Jake Beachy said. "But, you know, is it going to help any if we rave about it or we get angry? You know, we destroy ourselves doing that. So we might as well try and make the best of it."  

WKYC-TV

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