Philip Riehl, the majority owner of Trickling Springs Creamery LLC (TSC), a now-shuttered processor and marketer of grass-fed, organic dairy products, has been sentenced to 10 years in prison for orchestrating a massive Ponzi scheme that targeted members of the Mennonite and Amish religious communities in Pennsylvania and elsewhere.
The entire scheme is what is commonly referred to as “affinity fraud,” which typically involves investment scams that prey upon members of identifiable groups, such as religious or ethnic communities. These types of scams exploit the trust and friendship that exist in groups of people who share common interests or beliefs.
“While no form of fraud is ever acceptable, it takes a particularly vile person to target their own religious community,” said Michael Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Philip Riehl’s investors knew him and they took him at his word. He fully exploited that trust, misleading them repeatedly, with some $60 million of their hard-earned money disappearing into what proved nothing more than a giant Ponzi scheme. While we can never make his victims whole financially or emotionally, today he is being held accountable and that is some measure of justice for those he’s wronged.”
In February, Riehl, 68, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud.
Riehl was also ordered to pay $60 million in restitution for his role in fraudulently soliciting tens of millions of dollars in investments from his accounting clients and others into an investment program that he operated. Riehl then diverted funds from the program to TSC. Riehl also fraudulently solicited direct investments in TSC.
TSC ceased operations in September and filed a bankruptcy petition in December. Investor losses are estimated to be around $60 million, making this one of the largest Pennsylvania-based Ponzi schemes ever.
Riehl was also ordered to forfeit two pieces of real estate, $22 million in loans receivable and $1.5 million in payments.
“The people who invested their money, sometimes their entire life’s savings, with Philip Riehl believed implicitly that they could trust him because he was one of their own,” said U.S. Attorney William McSwain. “Riehl preyed upon that trust, swindling them out of tens of millions of dollars in an effort to keep his creamery business from going under. No matter what community they belong to, fraudsters like Riehl must be held accountable under the law for justice to prevail.”