While all investment fraud is appalling perhaps the most insidious is when a member of a close-knit group uses their “closeness” as a familiar disguise to lure other members of the group into their lair. We’ve seen this with Bernard Madoff and the Jewish Community, numerous televangelists with their Christian communities, immigration fraud in the Latino community with Latino’s posing as immigration lawyers, and most recently, Earl Miller, of Amish heritage, taking advantage of the Amish community.
The $5.2 Million Scam
Earl Miller of Indiana, was raised of Amish heritage. Somewhere along the way he lost all sense of the beautiful belief system of his community.
Miller created a fund targeted to Amish investors. He realized if he convinced naïve Amish investors that he was one of them, he could more easily separate them from their money. He did a lot of advertising in Amish community newsletters and appeared at Amish town-hall meetings. He created a small-scale Ponzi scheme and took more than $4 million exclusively from his Amish clients. Like Madoff and others before him, he promised “double-digit returns,” and an impressive fixed rate of 8 percent to 12 percent per year.
The problem was, it was all a lie. He had never managed a fund before. He convinced investors he would essentially pool their money and invest it in solid real-estate investments. The Amish know and understand the value of good land and Miller knew that as well. He took their life savings and put it into very high-risk investments having nothing to do with real-estate.
According to the SEC Miller managed to trick investors into believing he would take no fees for managing the fund. He must have told them it went against his/their values to profit off of the hard work of others in the community. In fact, he scammed more than $1 million for his personal use and used the rest to buy out a former business partner.
Fighting Ethics to the End
Earl Miller was tried by U.S. District Judge Joseph S. Van Bokkelen.
He claimed he had done nothing wrong and that he was making every attempt to repay his investors. The judge was not buying any of it. Miller was required to return $4.1 million of the original investments, $799,000 in interest and $320,000 in civil penalties. He is looking at six years in a federal penitentiary.
The community that Miller tried to taken advantage of, has now publicly shamed him.
This scam took an inordinately long time to settle in the courts, as the original filing occurred in 2015. While much of the original investments have been recovered, and although extra monies were set aside for “interest,” the investment will prove more costly in terms of lost opportunity and lower interest rates as opposed to higher-yielding, legitimate investments.
However, the real fraud here was the breach of trust created by a false sense of comfort and familiarity. Miller knew this. He honed his pitch to perfection. He saw an opportunity to play into a sense of trust that should not have been a consideration. There was no oversight, just a blind sense of trust.
Miller’s need was for cash and what it could do for him. The fact that more than twenty-five percent of the investor’s money went to lining Miller’s pockets is proof enough that he had no ethical connection to any of these investors save for greed.
In the process of bringing Miller to trial, I am sure that many within the Amish community probably asked each other, “How could he do this to ‘his own people’?” Such questions are the easiest of all to answer. “His own people,” were hard-working and ethical. Miller was unethical and a liar. In the end, there was no connection.
This case of fraud illustrates something we should all embrace. In seeking to invest, view professionals in terms of their credentials and experience, not because they look or sound like “we do.”
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