CLEVELAND – A man has agreed to plead guilty to defrauding his fellow
Amish in 29 states out of nearly $17 million, the government said
Tuesday.

The attorney for Monroe L. Beachy, 77, owner of A&M
Investments, notified a federal court of Beachy’s “intention to plead
guilty as charged” and spokesman Mike Tobin with the U.S. attorney’s
office confirmed the pending guilty plea.

Ohio’s Amish
communities, concentrated in rural counties south and east of Cleveland,
have a modest lifestyle, travelling by horse and buggy and forgoing
most modern conveniences.

Beachy declined to comment when asked
Tuesday whether he had struck a plea bargain or why he was changing his
plea. His attorney did not immediately return a message seeking comment.

Tobin
said the U.S. attorney’s office had no immediate comment on the pending
guilty plea. Prosecutors typically avoid any comment that might disrupt
a defendant’s pending agreement to plead guilty.

The indictment
charging Beachy with one count of mail fraud says he promised investors
safe securities but moved money to riskier investments. Mail fraud is
punishable by up to 20 years in prison.

According to the
indictment, nearly 2,700 people and entities, including an Amish
community loan fund, lost about $16.8 million since 2006.

Beachy’s firm has filed for bankruptcy protection.

The
investments directed by Beachy “were not the ‘safe’ investments as
reported to his clients or investors,” the indictment said.

In
announcing the agreement last fall, U.S. Attorney Steven Dettelbach said
the case highlighted the risks of affinity fraud involving trusting
investors from a group with similar ethnic, religious or personal
backgrounds.

Harvey Salkin, an investment professor at Case
Western Reserve University, said dishonest financial advisers can take
advantage of personal relationships in close-knit groups.

“People are very susceptible to invest with their own kind,” he said. “There are bad apples in every barrel.”

Salkin said investors, even those like the Amish who might have limited research options, need to check out investment advisers.

“They
can’t say, ‘Well, we don’t use telephones, we don’t do this, we don’t
do that.’ That’s a good way to go broke. And they work hard for their
money, very hard,” he said.

Dettelbach stopped short of saying
whether Beachy had personally profited or just made bad investments, but
he said Beachy had made a living for years offering investor services
to the Amish.

A&M Investments filed for bankruptcy protection
in June 2010, listing about $33 million in liabilities and nearly $18
million in assets.

In a court appearance in October, Beachy tried
to plead no contest on religious grounds. He didn’t elaborate on the
religious grounds, and his attorney advised against the move.

Amish
traditionally avoid involvement in the court system. The religion issue
also emerged in the bankruptcy filing involving Beachy’s company.

A
bankruptcy judge rejected a bid by members of Mennonite and Amish
communities to let them settle the matter out of court. Members of the
Plain Community said Beachy had “accepted the counsel” of his church.

The community has “a history of taking care of our own and mutual aid,” a Mennonite minister said at the time.

Beachy is a member of an Amish church near Sugarcreek.