The Securities and Exchange Commission has filed a civil injunction action charging a 77-year-old Amish man from the village of Sugarcreek, Ohio, with targeting his fellow Amish as investors in a fraudulent offering.

The SEC’s complaint, filed on Tuesday, alleges that from as early as 1986 through June 2010, Monroe L. Beachy, doing business as A&M Investments, raised at least $33 million from more than 2,600 investors through the offer and sale of investment contracts. The vast majority of Beachy’s investors were Amish.

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 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 had only a 10th grade education and some tax preparation training with H&R Block, according to the Washington Post. He also owned a horse and buggy among his personal assets.

Beachy’s investments suffered significant losses in investor principal, which Beachy hid from his investors, according to the SEC. Like Bernard Madoff with his Ponzi scheme, Beachy mailed his investors monthly account statements showing fabricated rates of return and exaggerated account balances.

As of June 2010, Beachy’s investors believed, based on the fraudulent monthly statements Beachy had sent them, that they had approximately $33 million invested with him and his firm. In reality, less than $18 million of investor money remained in the accounts. 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.

The SEC’s complaint charges Beachy with violating the securities laws. 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 U.S. District Court for the Northern District of Ohio.

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