Latest News 2010 December An Amish Bankruptcy Shuns Court

An Amish Bankruptcy Shuns Court

The Columbus Dispatch has reported that an Amish community has asked a U.S. Bankruptcy Court judge to dismiss a case, involving $17 million from the Plain Community, so that they can handle it themselves. 

Monroe Beachy received more than $33 million, over a period of 25 years, from more than 2,000 members of the Amish and Mennonite churches in the northeast of Columbus.  He was trusted to invest it for them.

He lost $17 million and the Federal government suspects Beachy of fraud.

The Amish, in following the Bible, don't believe in the "force and fear" of a court system ruled by the government.  Beachy, by going to court to file a bankruptcy, has rejected "Godly counsel" and gone with what their church forbids.

The Amish use a court called the Kingdom of Heaven.  In this form of a higher court brothers are judged by brothers.  They feel that disputes are better handled in an atmosphere of love, trust and mutual aid. 

An appointed federal trustee is managing the interests of the creditors, and the remaining cash.  The trustee, while reviewing Beachy's actions, has found that he wasn't licensed to handle money, played the stock market, purchased .com stocks and engaged in gambling activities.

By 1995 Beachy's A&M Investment was insolvent but he told his investors that things were fine. 

Federal officials are now calling Beachy's actions that of a classic Ponzi scheme.  By continually bringing in new money and investors, Beachy was able to keep his scheme going.  Eventually, he used the money he had left to pay off a $2.4 million personal loan and then file for bankruptcy.

Investors were out about $33.3 million.  Each creditor, which translates to each extended family member, lost approximately $6,250 each.  A bankruptcy trustee was able to liquidate some investments and recovered $16.4 million.

Beachy, 76, now being investigated by the U.S. Securities and Exchange Commission, said, "I'm not happy about it." 

The Amish, and Beachy now as well, want to work together to resolve the matter.   Beachy said, "I can sense the forgiveness, it's been a teaching in the Amish community to forgive ... and it has happened here."

The Amish are planning on working with Beachy to help him pay back his debts by soliciting donations from their own community.  Statements from individual Amish to the U.S. Bankruptcy Court reads, "Forgiving a brother, however, is not shielding or protecting a brother from what he has done. My participation as a creditor is abhorrent to deeply held spiritual principles on which my family and I have built our lives. We file no claims in court. We are responsible to pay our debts."

The federal trustee, refusing to comment, wrote in a statement that he not only opposed the Amish to provide justice, but also that it would be irresponsible to remove the case from judicial oversight.

The bankruptcy court hearing is set for January 18.

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