CHAMBERSBURG, Pa. – An owner of a shuttered creamery faces federal charges for allegedly running a Ponzi scheme that tricked members of his own religious community to support the 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, Pennsylvania, 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.
Tricking Springs Creamery used milk purchased from 32 family farms to make products that it sold along the East Coast. Its store and production facility in Chambersburg, shut down suddenly at the end of September, though the store remained open a few more days. It filed for bankruptcy in December.
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A Pennsylvania Department of Banking and Securities filing from a year prior showed that 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.
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.”
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.
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