An accountant allegedly defrauded his company of $60 million — and stole from his fellow Mennonites and Amish neighbors, according to the feds.
Philip Elvin Riehl, 68, of Bethel Township, Berks County, was charged this week with conspiracy, securities fraud, and wire fraud, as part of a federal investigation into a scheme that took in about $60 million.
Over a decade, the accountant allegedly targeted more than 300 members of his Mennonite church and neighboring Amish communities in Pennsylvania before his Chambersburg-based Trickling Springs Creamery went into bankruptcy in late 2019.
It’s unclear where the $60 million went or if investors will be refunded, but “most of the victims were members of the Little Mountain Mennonite Church or were Amish,” said U.S. Attorney William McSwain in an interview. “That’s a very tight-knit community. Sometimes they don’t interact with law enforcement much, but the allegations were so egregious that many have cooperated.”
Mennonites and Amish victims of Riehl’s alleged crimes also “are hurting financially. They have strict religious beliefs and part of that is they don’t accept government assistance, such as Social Security, unemployment, or welfare,” McSwain said.
However, “they don’t complain. Part of the reason we’re being so public is that we want to spread the word that other victims should contact us.”
Riehl’s attorney, Christopher Sarno, had no comment on behalf of his client.
Riehl allegedly solicited tens of millions of dollars in phony promissory notes from accounting clients and others, according to the U.S. Attorney’s Office for the Eastern District in Philadelphia and the Securities & Exchange Commission. Many of these clients were members of his Mennonite church and neighboring Amish religious communities, who often loan money to one another as a form of financial support.
But Riehl allegedly diverted those funds to Trickling Springs Creamery, a failing Franklin County creamery of which he was the majority owner.
Riehl allegedly lied about the safety and performance of the promissory notes, as well as the creamery’s dire financial condition, the federal criminal complaint says.
Trickling Springs Creamery closed permanently in September 2019 and petitioned for bankruptcy in December 2019.
Investor losses in this case appears to constitute what’s referred to as “affinity fraud” — scams that prey upon members of identifiable groups, such as religious or ethnic communities, by exploiting their trust and friendship.
In this case, the victims were generally members of the Mennonite or Amish religious communities who wanted a safe and secure investment, operated within their community, and in a manner consistent with their religious principles.
If convicted, Riehl faces a maximum possible sentence of 45 years in prison, a $5.5 million fine, a 3-year term of supervised release, forfeiture, and mandatory restitution. He’s expected to appear for a hearing in February.
According to a separate SEC complaint, Riehl falsely claimed he required two co-signers on every loan, and would personally guarantee repayment.
The SEC further alleges that, in late 2018, Riehl diverted money against one investor’s wishes. In a 2019 letter, Riehl allegedly apologized for his dishonesty, including repeatedly stating that he required two co-signers on each loan, which gave a “false sense of security, in that such a considerable percentage of the funds were channeled into my personal projects," the SEC said in a statement.
The criminal investigation began as far back as 2010 by the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Michael Rinaldi and the Pennsylvania Department of Banking and Securities.