Tips to avoid investment fraud
An owner of the shuttered Trickling Springs Creamery faces federal charges for allegedly running a Ponzi scheme that tricked members of his own religious community to support the Chambersburg-based business.
According to the U.S. Department of Justice, Philip Elvin Riehl’s suspected $60 million scheme “targeted members of the Mennonite and Amish communities in Pennsylvania and elsewhere and is one of the largest Pennsylvania-based alleged Ponzi schemes in history.”
Riehl, an accountant from Berks County, is accused of fraudulently soliciting tens of millions of dollars into a bogus investment program, then diverting those funds to Trickling Springs Creamery, LLC, according to a news release from the United States Attorney’s Office for the Eastern District of Pennsylvania. He also allegedly solicited investments that went directly to Trickling Springs.
Riehl misrepresented the safety and security of the investments, and made misrepresentations and omissions about the creamery’s business and financial condition, according to the DOJ.
Riehl accused of exploiting people in his own community
Tricking Springs Creamery used milk purchased from 32 family farms to make products that it sold up and down the East Coast. Its store and production facility at 2330 Molly Pitcher Highway, Chambersburg, shut down suddenly at the end of September, though the store remained open a few more days. It filed for bankruptcy in December.
A Pennsylvania Department of Banking and Securities filing from a year prior showed the Riehl, the majority owner of the company, and co-owners Gerald Byers, Elvin Martin and Dale Martin were accused of bilking nearly $9 million from more than 100 investors in Pennsylvania and around the country. The order sought a response from the owners as to why the department should not impose sanctions and remedies concerning the alleged violation.
According to the DOJ, a scheme such as the one alleged is sometimes called “affinity fraud.” These are investment scams that prey upon members of identifiable groups, such as religious or ethnic communities.
Riehl, himself a Mennonite, generally targeted “members of the Mennonite and Amish communities who wanted a safe and secure investment, operated within their community and in a manner consistent with their religious principles,” the DOJ’s release states.
“These investors were looking for honesty and integrity when deciding where and with whom to invest their money,” said U.S. Attorney William McSwain. “According to the Information, Riehl presented himself as a trusted member of their religious community, only to betray that trust and swindle them out of tens of millions of dollars. It is only natural for members of a tightly knit community to want to take care of one another, but Riehl did not care about anyone but himself. Fraudsters must be held accountable under the law – no matter what community they belong to – for justice to prevail.”
Michael T. Harpster, special agent in charge of the FBI’s Philadelphia Division, said, “So long as there are people with money to invest, there will be swindlers ready to take their money under false pretenses. But it is particularly loathsome when these criminals exploit trusting members of their own church or community.”
According to the Department of Banking and Securities filing, Trickling Springs Creamery sold at least 175 promissory notes to 110 investors throughout the country for a total of more than $7.8 million between February 2015 to October 2017. Within the same time period, the company sold at least 20 notes to 15 Pennsylvania residents for $963,104.
In or near the same time period, each owner received checks worth more than $1.4 million in total from company bank accounts, with Riehl getting $954,250. In addition, nearly $1.2 million in cash was withdrawn.
45-year maximum sentence at risk
Riehl is charged with conspiracy, securities fraud and wire fraud.
If convicted, he could face a maximum sentence of 45 years in prison, a $5.5 million fine, a three-year term of supervised release, forfeiture and mandatory restitution.
A call to an attorney listed for Trickling Springs Creamery in the Department of Banking and Securities filing was not immediately returned Friday.
Trickling Springs opened in June 2001. The founders established strict guidelines for the farms producing their milk – including requiring grass-fed, heritage breed cows and no use of synthetic hormones – and would pay farms above-average prices to maintain these standards, according to the company’s website. With this milk, the creamery used minimal processing and simple ingredients to produce its milk products, butter, cream, cheese, ice cream and other dairy products.
Amber South can be reached at email@example.com.
Read or Share this story: https://www.publicopiniononline.com/story/news/local/2020/01/31/alleged-ponzi-scheme-federal-charge-pennsylvania-creamery-amish-mennonites/4623465002/