SEC Orders Restitution for Investors Defrauded by Long-time Accountant for Pennsylvania Amish and Mennonite CommunityThursday, February 27, 2020
On January 31, 2020, the SEC filed a complaint in a Philadelphia federal court against Pennsylvania resident Philip Riehl. The SEC charged Riehl with defrauding $60 million from Amish and Mennonite community members by making false claims about the use of their funds and guaranteed returns.
According to the SEC complaint, Riehl provided accounting services to the Amish and Mennonite communities, creating a fraudulent investment program that raised over $60 million in ten years. Riehl allegedly promised investors that he would use their funds in business and real estate loans to others in the religious community and personally guaranteed repayment with interest, usually at a higher rate than what is typically offered at a traditional bank. Riehl assured investors that he would be able to pay the principal and interest by charging his borrowers a higher interest rate than he paid investors and further promised to lower the risk of borrowers’ faulting on repayment by requiring two co-signers for each loan.
The SEC also alleges that Riehl sold promissory notes issued by Trickling Springs Creamery, a dairy business he owned, and promised returns of 4.5% to 5% on these notes without revealing the business’s poor financial state and increasing debt. The SEC further states that Riehl diverted money in 2018 from at least one investor against his wishes in an attempt to help lift the financial burden on the dairy business. Ultimately, Trickling Springs Creamery filed for bankruptcy in 2019 and Riehl has been unable to pay back investors. The SEC Complaint states that Riehl even sent a letter to investors apologizing for his dishonesty and admitting that a “considerable percentage of the funds were channeled into [his] personal projects.”
The SEC charged Riehl with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Act of 1934. Riehl has agreed to settle the charges, providing injunctive relief and returning the alleged ill-gotten gains plus prejudgment interest. The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against Riehl as well.
If a broker, insurance agent, attorney, financial advisor, or CPA advised you to invest in Philip Riehl’s scheme and you lost money, we may be able to help you recover. Call us (1-877-410-8172) for a free consultation.