02 Feb AiroAV Says: Feds: Berks man defrauded Mennonite, Amish investors | Berk…
READING, Pa. – The owner of a Berks County-based accounting firm is in trouble with the law for allegedly crafting a scheme that defrauded fellow Mennonites as well as members of the Amish community out of millions of dollars.
Federal authorities held a news conference at the Madison Building in downtown Reading on Friday to announce criminal charges of conspiracy, securities fraud, and wire fraud against Philip Elvin Riehl, the owner of Riehl Accounting in Bethel Township.
The criminal charges against Riehl were filed in the form of an information — which is often a prelude to a guilty plea — and the U.S. Securities and Exchange Commission said that he has apologized in a letter to investors, some of whom lost millions of dollars.
“I am sorry for any form of dishonesty I am guilty of, and for my part in any false impressions,” he wrote, according to an SEC complaint.
Authorities said Riehl created an investment program in the late 1990s, promising his customers a general 4-1/2-5% return on their money, which he claimed would be used to make loans to other people in exchange for interest on those loans.
“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.”
By late 2018, authorities said Riehl had hundreds of investors who lived in Pennsylvania, elsewhere in the United States, and outside the country.
But instead of fulfilling his promise to the investors, Riehl used the money to “enrich” himself and his co-conspirators, and to try to keep his now-defunct dairy business afloat, authorities said.
Riehl, 68, was the majority owner of Trickling Springs Creamery, which opened near Chambersburg, Pennsylvania, in 2001 and produced milk, cream, butter, ice cream, yogurt, and cheese. The dairy’s products were sold up and down the East Coast.
“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,” McSwain said. “Fraudsters must be held accountable under the law – no matter what community they belong to – for justice to prevail.”
Court documents said Riehl lured investors to a fund that made most of its loans to Trickling Springs and paid off older investors with money from new investors. He and a co-conspirator also sold promissory notes in an effort to prop up the struggling creamery, lying to investors that it was profitable when in reality it was losing money, according to court documents.
“Trickling Springs Creamery was a house of cards ready to collapse,” McSwain said.
Trickling Springs closed its plant and retail location in Chambersburg last fall, writing on its Facebook page: “We would like to express appreciation to our wonderful employees for their dedication and hard work as well as the farmers who stood beside us and supported our mission. We are especially grateful to the community who has supported and loved our products throughout the past 18 years.”
The dairy filed for bankruptcy in December. By then, the victims of Riehl’s scheme were owed approximately $60 million, not including accrued interest, authorities said.
“So long as there are people with money to invest, there will be swindlers ready to take their money under false pretenses,” said Michael T. Harpster, special agent in charge of the FBI’s Philadelphia division. “But it is particularly loathsome when these criminals exploit trusting members of their own church or community.”
If convicted, authorities said Riehl faces up to 45 years in prison, a $5.5-million fine, a three-year term of supervised release, forfeiture, and mandatory restitution.
Pennsylvania banking regulators previously filed a civil complaint against the dairy, Riehl and its other owners, alleging 370 violations of state securities law. On Thursday, the state banking commission ordered Riehl and his alleged co-conspirators to pay a $4.375 million civil penalty — believed to be the largest such penalty in state history.
Riehl and the other defendants have been excommunicated from the church, The Washington Post reported last month.