Beachy of Sugarcreek, Holmes County, Ohio, collected tens of millions of dollars from Amish families after taking a course at H&R Block. He only has a tenth grade education. He has only been charged with one count of mail fraud. He collected an impressive $33 million since 1990. Families suffered an average loss of $13,000.
It will be interesting to see how the Ponzi allegation is laid out in trial. Beachy had lost half of the money — $16.8 million — and was paying off older customers by collecting money from new customers. However, the indictment below is conspicuously vague. It charges such things as investing in areas that were not as “safe” as advertised. That does not make a Ponzi scheme. If Beachy continued to invest and was trying to make whole his investors, I am not sure this is a true Ponzi scheme which suggests simply shifting money from new customers to old customers without generating new investment profit.
The worst allegation is the issuance of false interest and investments reports. However, once again, the indictment is exceptionally and unusually vague on such critical points.
Here is the complaint: beachy-indictment