In September, a prominent member of the Amish community in Sugarcreek, Ohio was arrested and accused by federal prosecutors of running a Ponzi scheme that betrayed his neighbors’ trust and wiped out more than $16 million of their savings. The elderly defendant, Monroe L. Beachy, had been a respected financial figure in his community for decades. Interestingly, unlike Bernie Madoff, the investors went to court and urged that it was more important to forgive him than recover their money. In fact, Amish religious leaders petitioned the bankruptcy court to let the church take on the debt and handle the ponzi scheme, rather than the courts. The bankruptcy judge ruled that “delegating insolvency proceedings to a religious body” would be unconstitutional. More than a year after Beachy went bankrupt, he has been indicted on mail fraud charges arising from a “scheme to defraud” that the Feds say dates back to 1990. If convicted, he faces a possible jail term of up to 20 years.
1. What is a Ponzi scheme?
2. The campaign to have the Beachy bankruptcy case dismissed was based on what legal Act or rights? Do you agree or disagree with the bankruptcy judge? Discuss.
3. Explain how, if Beachy had been insolvent since as early as 1998, that this fraud was able to last until 2010?
Henriques, D. B. (2012). Broken Trust in God’s Country. The New York Times, Feb. 25. (Retrievable online at http://www.nytimes.com/2012/02/26/business/in-amish-country-accusations-of-a-ponzi-scheme.html?_r=1)
NYTimes Video. (2012). Ponzi Scheme in Ohio (Retrievable online at http://video.nytimes.com/video/playlist/business/1194811622255/index.html)