Amish & Mennonites Victims of 4 Major Financial Schemes Since 2008

The year 2015 brought news of an investment scam targeting Amish in multiple states. Amish-born Earl D. Miller promised investors double-digit returns, and many Amish people gave Miller their money.

Miller eventually gathered over $50 million. Some of this was used to pay back earlier investors promised returns, in typical Ponzi fashion, before the scheme imploded.

Amish being victimized by large-scale financial scammers is nothing new, however.

This was at least the fourth major financial scheme targeting Amish and Mennonites to come to light in the past decade. More on that below.

Image credit: grego1402/flickr

The Earl D. Miller Case

Here’s the background on the latest case, in a nutshell. From the Washington Times Herald:

The bankruptcy uncovered a massive fraud case involving millions of dollars, almost all of it coming from the Amish communities in Indiana, Michigan, Ohio and Pennsylvania. According to the bankruptcy documents, the chief fundraiser was Earl Miller, a man who was formerly Amish and still had connections into the Amish community in northern Indiana. Miller eventually took over the entire company.

Court records indicate that Miller would advertise in Amish papers and during meetings, would convince many people to use their 401K and IRA accounts as investments in 5-Star. The marketing campaign was directed almost exclusively to Amish and between 2009 and 2012, netted $12.1 million. A separate campaign in 2013 raised $13.6 million. In total, the court found 5-Star took in $54.5 million from investors and paid out $17.5 million.

“A number of folks in Daviess County fell victim to this scheme,” said Swartzentruber. “In some ways, there are elements of a Ponzi scheme where later investors were paying folks who got in earlier. There was no growth to it. It was get more investors in to pay off those you had previously agreed to pay.”

The scam depended in part on 5-Star giving investors false, overvalued mortgages on properties, sometimes with multiple investors holding mortgages on the same property.

The story is back in the news because last Saturday, Amish and others met with the Creditors’ Committee at Dinkys auction barn in the Daviess County, Indiana settlement.

They were there to find out if they’d be able to get any of their money back. As many as 50 Daviess County Amish families were affected with funds invested totalling up to $5 million.

Some relief

It turns out investors will have some of their investments returned. But of course, nowhere near the full amount:

At this point, the bankruptcy court has been able to recover $5 million to $7 million from the 5-Star assets and begun sending that money back to the investors.

“Typically in a Ponzi scheme, the return is around 3 percent,” said Swartzentruber. “The court has approved an interim distribution. It seems like this is getting sorted out in about as good a way as possible. The return in this case looks like it will be 30 cents to 40 cents on the dollar.”

If the typical Ponzi fraud return is 3 percent, getting 10 times or more than that seems a pretty good deal, all things considered.

Daviess County however, may have been more affected than others, as the investors there were some of the latest joiners, and so did not receive the Ponzi payouts that earlier investors would have.

Not the first time

This recalls similar fraud cases in the past, in which the Plain background of the operators made it easier for bad things to happen.

These include the John M. Sensenig financial scandal, (Sensenig was a member of a Lancaster Old Order Mennonite church), as well as the A & M Investments case, which was run by an Amish fund manager. There was also the Pigeon King scam. That one was not run by a Plain person, but it impacted many Amish and Mennonite investors.

Each of these cases differed in the details. But the background of the founders and/or the mutual confidence generated by having other Plain members involved as investors contributed to their temporary “success”. Each collected tens of millions of dollars from victims.

Will the story keep repeating?

With close-knit church communities like Amish and Mennonites, there is built-in trust which can more easily be exploited in what has been termed affinity fraud. Unfortunately that has now happened multiple times.

One possibly positive point, however. These schemes were all occurring at more or less the same time. And all were exposed within a period of six or seven years.

Earl D. Miller ran his business from roughly 2008-2015. The A & M case came to a head with the fund’s bankruptcy in 2010. Pigeon King started in 2001 and had fallen apart by 2008. Sensenig operated from around 1997 until 2009.

Hopefully these cases coming to light in close succession has driven the lesson home, and will help bring an end to an era of large-scale financial exploitation of and within Plain communities.

At the same time, by their very close-knit nature where trust between members is inherent, Amish and Mennonite communities will remain at some risk of this repeating in future.

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    1. Stephanie Zito

      Amish & Mennonites Victims of 4 Major Financial Schemes

      I don’t like to see Amish and Mennonites be targets and end up victims of scams. This Financial Scheme is terrible. The one suggestion that I have is when anyone seeks you out and tells you that if you invest in what they have to order, best to run backwards. There are a number of highly reputable Financial and Investment Company’s that you can find on the internet and investigate. Also check them out in the Better Business Bureau to see if they have been reported for any reason. If you want to invest go with a highly rated company that sends you monthly statements that shows what kind of return your investment is bringing in and be able to have phone contact and or person to person contact with the investment company. Go and interview investment company’s. Maybe even consult a Christian Attorney before you decide to invest your money. Do research before you make these kinds of decisions to avoid any future scams. I am not a financial advisor but I do know that when doing business especially with those who are not within the Amish and Mennonite Community, it is always wise to investigate your options and know the details of what you are getting into.

      1. Good points Stephanie. But I think the reason these schemes succeed so wildly is because many people put a lot of weight in the recommendations and actions of the people closest to them. If a father or a trusted uncle tells you to option A is a good one, that carries a lot of weight. It’s similar in these close-tied churches and knowing a lot of other people you know and respect have also invested, makes it that much easier to choose similarly… especially if it’s something like investing which for a lot of people is not a topic they are necessarily comfortable with.

    2. Steve B

      Investments Schemes

      This type trickery and behavior is so wrong in so many ways. The lose of money is one thing, but the lose of trust we have for each other, is quiet another. GREED has no shame. It is more than willing to hide behind any symbol of faith or religion, that allows it’s owner to advance at someone else’s expense. Surely, there is a special place in the after-life for folks that willingly take advantage of good and honest people. At least I hope there is.

      1. Yes a widespread degrading of trust in these communities I think would be a bigger loss than whatever financial damage is incurred. Hopefully that does not turn out to be the case (I don’t think it will, but that also means this type of thing might happen again).

    3. Angie wkrzjewski


      I am so astounded to read about this but also knowing the human nature ….no matter the religion or philosophie ..,things like this or other things happens all over the world…and no one likes it …for sure…but that is the way humans are made wuth both sides in hope the amish and mennonites.will get over this quickly..
      Take care…
      Ps i am not amish or else ..juste plainly a human being who likes straight thinking.. …

      1. Yes there are a lot of examples of this affinity fraud happening in other non-Amish churches as well as other organizations. This legal firm’s blog has an aggregation of such stories:

    4. Vivian Furbay

      This is so sad! It’s bad enough when it’s done to people outside the plain people but when they cheat the plain people, i think it is really terrible. God will deal with them. The Bible says: vengeance is mine; i will repay says the Lord.