On Native American reservations, “disenrollment” is serious business. If a family’s bloodline is determined to be impure, its members can lose their home, health insurance, educational stipend, and cultural heritage with just one signature from a tribal leader. There are no appeals. There are no second chances. “That’s it,” one excommunicated Chukchansi woman recently told the New York Times. “We’re tribeless.”

According to reporter James Dao, tribal leaders in California have purged at least 2,500 Native Americans since 2001, and the rationale has virtually nothing to do with proper ancestry. Sadly, the decisions are driven primarily by greed over revenue from casinos, a massive industry that has fully transformed reservation life during the past three decades. In 2009, the last year for which data was available, Indian casinos* generated $26.4 billion, outperforming nationally their older and often smaller commercial counterparts. With that much money on the table, activists and academics contend, some elder statesmen have taken the most extreme step possible -- slimming down the tribe -- to consolidate control over the profitable gaming operations.

That gambling plays such an outsized role in the lives of Native Americans is essentially an historical accident, the byproduct of a obscure legal decision and the subsequent entrepreneurialism of one desperate indigenous administrator. A few years ago, University of New Mexico law professor Kevin Washburn wrote a detailed law review article about Bryan v. Itasca County, the case he calls the “bedrock upon which the Indian gaming industry began.” The plaintiffs were Helen Charwood and Russell Bryan, members of the Leech Lake Band of Ojibwe in northern Minnesota. In late 1971, the couple purchased a two-bedroom trailer to replace a dwelling that had burned down on their property. Most Native American land is held in trust by the federal government, a legal arrangement that shields homeowners from state property taxes, but Itasca tax collectors considered double-wides personal property, which is not similarly exempt. One day the following June, a tax bill for the last two months of 1971 arrived in Charwood’s mailbox; the levy equaled $29.85. In July, USPS delivered another notice indicating a six-month assessment of $118.10. Both bills had to be paid off within 30 days.

Charwood, a Head Start teacher fearful of foreclosure, immediately contacted the newly-established office of the Leech Lake Reservation Legal Services Project, which helped her file suit. Whether or not the mobile home constituted federal trust property turned out to be largely irrelevant; instead, the case centered around the court’s interpretation of Public Law 280. While the U.S. Constitution generally grants the federal government plenary power over Indian tribes, that law -- passed by Congress in 1953 -- transferred to six states (including Minnesota) federal law enforcement authority over certain tribal nations. Itasca’s lawyers assumed tax recovery was one of the regulatory powers the county could bring to bear. The Ojibwe disagreed. The case worked its way up to the U.S. Supreme Court, which released a broad and blistering decision in favor of the Native Americans. Chief William Rehnquist and all eight of his colleagues found nothing “remotely resembling an intention to confer general state civil regulatory control over Indian reservations.” The purpose of 280 was to bequeath the state with jurisdiction over criminal offenses committed on the reservations, they reasoned, not to control all behavior. Charwood and Bryan were off the hook.

As Washburn writes, the expansive and forgiving SCOTUS ruling was “pregnant with possibility.” Jim Billie was the first to capitalize. Born in 1944 on the grounds of a chimp farm, and initially left for dead** by his bruising and proud people, Billie learned at a young age that tourists would flock to Indian reservations if the home tribe provided a novel reason to visit. His first entertainment venture was alligator wrestling, for which he became regionally famous. "It was P.T. Barnum, that's all," he later told Sarasota Magazine in 2004, "All them boys could catch 'gators. I just added a flair to it." Twenty years later, after two tours in Vietnam (as a decorated Army Ranger), a spell in college studying cosmetology, and a victory in the race for Seminole tribal chairman, the charismatic Floridian turned his attention towards big-time gambling.

The appeal was obvious. The year Billie was elected, the incumbent chairman controlled a budget of just $400 per member. Poverty was rampant, human services and cultural programs nearly absent. And on his first day in office, the tribe’s comptroller dumped on his desk a proposal from several South Florida financiers to open a high-stakes bingo parlor on Seminole land, a plan his predecessor -- fearful of the reaction he’d receive from his many Southern Baptist members -- had ignored. Bingo was already legal in Florida, but state law only sanctioned a maximum jackpot of $100. Thanks to the Bryan ruling, which solidified the regulatory sovereignty of Native American tribes, Billie and his potential colleagues figured they could offer payouts that were both legal and massive. He quickly signed a contract that gave the tribe a 55 percent cut of all revenue, secured a $3 million bank loan for construction, and set about building a bingo hall outside of Fort Lauderdale.

Americans, it turned out, really like to gamble. The first hall, which initially featured a $4,000 super jackpot, opened to capacity crowds. The state of Florida tried to shut down the operation, but Billie’s team of lawyers outmaneuvered the AG’s office and established legal precedence for their establishment in 1981. The following year, the Seminoles opened a second building in Tampa, which included poker and video slot machines. Players stormed the gates. Before long, they expanded to Immokalee, Brighton, and Coconut Creek, and the cash poured in; between 1980 and 2000, the tribe’s budget grew from $500,000 to $650 million, of which over 90 percent came directly from gambling. Billie went on a construction spree, opening schools, museums, hotels, tourist ranches, farms, office parks, and even an aircraft plant. The Seminole political action committees donated more money to Florida politicians than any other interest group in the 1990s, ensuring their gaming rights would not be challenged. Every man, woman, and child in the tribe was sent a monthly subsidy. And their exuberant and flirtatious chief even bought a 47-foot yacht, a $9-million jet, and three multi-million dollar helicopters to travel from his home in the Everglades to tribal headquarters.

Money, while useful, can also breed resentment and suspicion, feelings from which the nouveau-riches Seminole leaders were not immune. When Billie hired an outside investigator to audit the tribe’s ostentatious spending habits, and the administrator recommended the Seminoles eliminate a massive pool of contingency cash the five councilmen doled out without any oversight (and often for political favors), his colleagues turned on him. After five straight landslide electoral victories, the council went public with a sexual harassment complaint they would have historically dealt with privately and forced Billie to resign from his post without severance in 2003. The man who had launched the Indian gambling industry was escorted off his own reservation by police.

But that’s not the end of Billie’s tale. This May, the former leader was reelected as tribal chairman in a “house-cleaning that saw several other long-entrenched tribal leaders defeated in bids to stay in office.” Back in power, he’ll need to confront some intractable health and social problems afflicting his tribe; although most live in free housing and collect monthly dividends of $3,500, Seminoles still suffer from a disproportionate rate of joblessness, Type II diabetes, and substance abuse. Those are issues penny slots alone can’t solve.

For more on Billie, be sure to read the excellent Sarasota Magazine piece I linked to above.

*Nearly 450 casinos now operate in 28 states.
**Billie’s father was an Irish soldier and “mixed bloods” were once thought to possess evil spirits.

“It’s rats and roaches, blood, guts, and talent … It’s being young, creating, doing things with dignity.”

That’s Berry Gordy Jr., on November 6, 1966, describing to a reporter from the Los Angeles Times what he considered the essence of the Motown Sound. As the owner of the most beloved independent (and black-owned) record label in American history, Gordy was in the business of selling records, so an unsympathetic critic could read the quote as mawkish myth-making. I’ll be generous and say the sentiment reflects with some accuracy the sensibility young audiences found appealing about the bevy of singers who belted out hits from the famed bungalow in 1960’s Detroit. Solid Motown tracks always felt simultaneously specific -- rooted in diverse, mid-century black neighborhoods -- and universal. It didn’t hurt that the pop-infused soul tunes were catchy as hell, either.

The label’s linchpin was undoubtedly The Supremes, the all-female pioneers who ultimately registered 12 chart-topping singles and first signed a contract with Gordy 50 years ago this year. As a creative person trying to catch a break myself, I find some inspiration in their famous (and quirky) origin story. The original ensemble -- Diana Ross, Florence Ballard, Betty McGlown, and Mary Wilson -- grew up together in the Brewster-Douglass* housing projects and were initially brought together by Milton Jenkins, a small-time promoter for the local men’s quintet known as The Primes (later The Temptations). Jenkins thought a sister act might be good for his business, so he started booking the young ladies at block and basement parties under the moniker “The Primmettes.” "I used to get whipped every night for going to those parties," Ross told Time in 1966, "but I always went. We sang because we loved to sing.” The gigs, while exhilarating, didn’t pay much, which forced Ross and her high school colleagues to try some creative tactics to grab Gordy’s attention and secure steadier work. More from Time:

In 1960 they made their first bid for a recording contract with Berry Gordy, the hiphazard impresario of Detroit's Motown Record Co. "They seemed like just three skinny teen-age girls," he remembers. "I told them to go back to school." Back they went, but in her junior-year Diana wangled work with Gordy as an assistant to his secretary. "I didn't know anything about being a secretary," says Diana, "and I used to sing every time he opened his inner door." She was fired within two weeks, but did manage to land the girls some recording jobs in a background chorus. One day after school, they dropped in to tell Gordy he owed them some back pay. The ensuing conversation led to the audition and the contract that was to make Berry the U.S.'s largest producer of 45-r.p.m. records last year.

Given the label’s enduring cultural impact, it’s easy to forget that Motown -- powered by The Supremes -- really had just one creatively significant decade. Gordy’s tight-fistedness and mechanized production model eventually turned off popular musicians who rightfully deserved better contracts and more promotion for their work. Between 1967 and 1980, Motown lost control of the Jackson 5, Marvin Gaye, Smoky Robinson, The Temptations, Martha and the Vandellas, and the famed songwriting team of Holland–Dozier–Holland, not to mention Diana Ross herself.** That’s a murderer’s row of talent. And when Gordy felt the wanderlust for Hollywood and moved operations to California in 1972 to focus on films and television, he didn’t spend enough time developing new voices to replenish his cupboard. (Rick James and The Commodores sold some albums, but were not critical darlings.) Jheryl Busby, who took over Motown in 1988 amid lagging sales, explained the problem diplomatically in an 1989 interview with the New York Times: ''When Motown moved from Detroit to Hollywood and Berry diversified into movies, there may have been a failure to keep their ears on the street, where the creativity comes from.''

I guess it’s fitting that Hitsville U.S.A. was transformed into a popular museum while the building that once housed the business side of the enterprise was left to decay and was ultimately razed to make way for a parking lot. The label’s music was iconic, and its management imperfect.

*My buddy Paul is finishing up a documentary on the B-D homes, which I am excited to see.
**I especially like Tito Jackson’s blithe comment announcing his group’s departure for Epic in 1975: “We left Motown because we look forward to selling a lot of albums.”

In my latest effort to complicate Robert Putnam’s theory about America’s social capital crisis, a few friends and I are trying to organize a monthly poker game here in Chicago. Though it’s been a while since I played regularly, I’m excited to sidle up to the table. The odds of taking home a big pot aren’t fantastic, but neither are the chances that my fantasy football team will break .500 this season. And a big hand could give this freelancer some modest financial flexibility.

If we lived in the Old West and frequented establishments like Al Swearengen’s Gem Theater, our game of choice wouldn’t be Texas Hold-Em or Seven-card Stud. Instead, we’d play faro, a French creation that found fans in New Orleans and was eventually championed by riverboat gamblers on the Mississippi and new inhabitants of the American frontier. Lost to history now, faro was considered our national card game in the late 19th century, occupying what two historians once called “the summit of professional gambling.” Its appeal was obvious; faro is fast, simple to learn, and can be played by as many card sharks as can squeeze into a gambling hall.

Here’s how it works. Images of one full suit -- Ace through King -- are painted on a felt table, otherwise known as the Faro Bank. Similar to roulette, players place bets on any of the 13 cards available, trying to predict which cards will appear in a given round. After burning the lead card, the dealer flips over the second card in his deck, known as the “banker’s card,” and places it on the right side of the table. Next, he flips over the third card in the deck and tosses it to the left. This is the “player's card.” If the face value of the banker’s card matches the card a gambler bet on, he forfeits his wager to the house. If the player’s card matches it, he wins even money. And if the banker’s card and player’s card are equal, the house wins half the chips that are placed on that corresponding value. That’s essentially the entire game.

Aside from the splits, a faro banker has no consistent advantage over the players he lures to his table. Honest faro, in other words, makes virtually no money for the house in the long run. To compensate, Western casino owners and their dealers employed any number of tricks to swindle eager customers. Crooked dealing boxes were common, as were specially-designed cards. John R. Sanders described some of these inventions in his 1996 piece for Wild West:

“Sanded” cards, roughened on one side, would cling together, and were used with “two-card” boxes that allowed the dealer to slide out more than one card at a time. “Strippers” were narrower on one end, or had curved sides, so a dealer could manipulate them during the shuffle to 'put up' splits. Since splits occurred naturally only about three times in two deals, there was an obvious house advantage in increasing the number dealt. [...]

Crooked games were called brace games, defined by Indiana gambler Mason Long as those “in which a man has no chance of winning unless the dealer breaks his finger, and that he never does.” Brace houses sprang up nationwide, where “cappers” posed as players and “steerers” lured in unwary “gulls.” Such organized and widespread cheating led reformed gambler Jonathan Green to write in 1853, “A man would act more rationally and correctly to burn his money than to bet it on faro.”

By the time Nevada legalized gambling in 1931, faro had lost much of its popularity, tainted by rampant cheating and eclipsed by table games (craps, roulette) that offered both larger payouts and better house odds. In 2000, one former dealer tried to launch a revival in Reno, but it didn’t take hold. The best faro enthusiasts can do now is play the game online.

And who knows? Now that Congress is cracking down on poker websites, an Internet comeback may just be in the cards.

Whoever drummed up the idea to launch Off The Grid, Chicago’s new “writers-in-residence” blog, is one smart cookie. And signing up Alex Kotlowitz as the first contributor was an inspired choice.

For his second post, the decorated writer (and now film producer) decided to visit a pawnshop on the city’s West Side. Like dollar stores and other businesses that service people “skimming along the margins,” pawn brokers have made a killing since the economy tanked; spurred by a spike in gold prices and the hollowing out of people’s savings accounts, the nation’s three publicly-listed pawnshop companies -- Cash America International, EZCorp, and First Cash Financial Services -- have outperformed virtually every other business in the financial services sector over the past three years. Flush with cash, Smart Money reports that those chain merchants are “going Disney,” deploying clean-cut employees, investing in new technology, and expanding into suburban markets in an effort to bring in more (or once) affluent customers. Independent operators like the 58-year old shop Kotlowitz visited, which still make up the bulk of the industry, have been forced to follow suit. “In good times,” he writes, “you walk into the pawnshop, people are lined up desperate for just a little cash, and you realize the fiction of the American dream. In bad times, like today, you get a glimpse of what could be around the corner for the rest of us.”

Reading the post, I realized I didn’t know the first thing about the mechanics of pawnshops, context Kotlowitz glossed over, perhaps assuming that most of his readers aren’t idiots like me. It turns out that pawning can be a really nasty racket.

Here’s how it works: Customer A has poor credit (and thus no access to commercial banks) and needs some quick cash. He grabs one of his prized possessions and brings it into the shop. The broker assesses the value of the object (in our imaginary case, $400) and offers Customer A a short-term loan, generally for 30 days and totalling one-quarter to one-third of the item’s resale value ($100), with the keepsake serving as collateral. Customer A goes on his merry way. At any point during the next month, Customer A can pay back the loan (plus interest) and recoup his valuable. If one month elapses and Customer A doesn’t return, he’s given a 30-day grace period to pay up. If he doesn’t show by Day 61, the pawnshop takes ownership of the “collateral” and the broker is free to sell that merchandise, usually at 50 percent of the item’s retail price ($200). When you walk by a pawn shop, it’s those “foreclosed goods” you see hanging in the window.

Cash America’s CEO estimates that roughly three in 10 of the company’s lendees pocket the loan for good. That means pawnshops make up a small portion of their profits on the difference between what they loaned out in capital and the sticker price for the saleable wares they now own ($100, in the case of negligent Customer A). The rest they collect on interest and fees. And it’s definitely not cheap for those customers who actually make good on their financial promise; though pawnshops are regulated at the state level and thus fees vary by geography, some of the nation’s 13,000 storefronts charge borrowers upwards of 25 percent, equivalent to a 300 percent annual percentage rate. (In Illinois, there’s a 20 percent cap.)

Data on pawnshop-induced debt is difficult to come by. The Consumer Financial Protection Bureau has actually been ordered to conduct a study on folks who use “exchange facilitators” for personal or family purposes in hopes of better understanding the impact of these firms on consumer credit. That’s encouraging. Pawning doesn’t seem nearly as pernicious as payday lending, but it’s no walk in the park, either. Unless you’re a Pawn Star, that is.

The debt deal Congress struck over the weekend wasn’t the only time-consuming legislative project lawmakers have focused on at the expense of job creation. For months, congressmen in the capital “debated” the merits of a major patent reform bill, one that led to a “byzantine war between powerful interests,” according to the Huffington Post’s Zach Carter. Our Constitution gives Congress the power to issue patents, whose purpose is to encourage the development of new and productive ideas. Carter’s reporting shows that the latest melee on the Hill did little to clarify or improve existing intellectual property law. Instead, it provided lawmakers a justification to hold meetings and accept donations from tech giants, drug companies, and major banks. It was a massive, if profitable, distraction.

If the nation’s first patent statute was still the law of the land, this process would have looked considerably different. On the books for just three years, from 1790 to 1793, initial applicants were required to file a petition with the U.S. Secretary of State (who at the time was Thomas Jefferson). Along with the Secretary of War and the U.S. Attorney General, the cabinet member evaluated each application to determine whether or not the discovery was “sufficiently useful and important.” If approved, the patent holder would receive exclusive rights for 14 years.

Jefferson and his fellow “Commissioners for the Promotion of the Useful Arts,” who were a little tied up running a brand new country, granted just three patents during their first year on the job. The original awardee was a man named Samuel Hopkins, a Quaker from Pennsylvania who claimed to have perfected a new and improved technique for manufacturing potash, a substance (derived from the ashes of hardwood trees) that served as a crucial ingredient in soap, glass, and gunpowder. Hopkins speculated that potash producers could boost yields by burning the raw tree ash in a furnace before dissolving and boiling the plant product in water. With patent in hand, Hopkins staked his financial future on a licensing scheme, asking asheries in forest-rich New England for a $50 down payment (roughly $650 today) in exchange for a five-year furnace contract.

Hopkins' price, it turned out, was way too high to attract serious investors. As David Maxey wrote in his 1998 report on the subject, not-so-subtly titled “A Study of Failure,” “the cost to licensees far outweighed the increased yield … especially when a much cheaper, noninfringing alternative for producing potash was within easy reach.” Hopkins couldn’t dump his own resources into an advertising blitz either, because making a major financial commitment to an unproven venture could have been construed as gambling, behavior that was inconsistent with the values of the Religious Society of Friends. Financial ruin inevitably followed. Here’s an excerpt from the minutes of one monthly church meeting in 1802, which Maxey dug out of the archives:

"Samuel Hopkins, who has been some years removed from us with his Family to Rahway, hath been treated with by the Overseers on account of having, by entering into Engagements beyond his Ability to manage, failed to fulfill his Contracts, and pay his just Debts, whereby Reproach hath been brought on the Profession of Truth which he hath made. At our last Sitting, . . . Samuel came forward and asked the aid of his Friends, and the Meeting verbally named a Committee to hear his Request in company with the Overseers. With their united Consent he now offers a paper acknowledging that by leaving a Business in which he had been instructed, and for want of Patience too speedily embracing another Employment which though appearing more eligible, had led him into a Train of Difficulties and Embarrassments, and prevented his doing Justice to his Creditors, whereby he had been brought into deep and exercising Conflicts on these Accounts.

America’s first patent holder, in other words, was a massive failure. And we have the nation’s third president to blame.

Tomorrow morning, I’ll be traveling to Long Island (via Brooklyn) with some fellow Wolverines to attend a college roommate’s wedding. After six enjoyable ceremonies in five states (and two countries) last summer, I’ve been craving an opportunity to suit up and wild out over a friend’s nuptials since Labor Day. And this particular reception, with its black tie requirement and country club setting, promises to be a classy affair. I couldn’t be more excited.

The privilege of reveling in the joyous marital festivities without having to foot the bill is one this penny-pincher doesn’t take lightly. Although couples have limited their outlays marginally since the economy tanked, mostly by cutting down on the number of invitations offered, the median cost of a wedding is still $16,453, or four-months pay for the median U.S. household. The average cost is almost twice that figure, which means those soon-to-be-spouses near the top of the income ladder aren’t sparing any expense at all. Rebecca Mead, who literally wrote the book on the so-called “marriage-industrial complex,” once joked that “weddings have only got bigger and grander, as if the extravagance of the ceremony might keep at bay the hobgoblin of divorce statistics.”

Lalit Tanwar and Yogita Jaunapuriais, a newly-arranged Indian couple, upped the ante dramatically earlier this year. The progeny of influential (and insanely wealthy) politicians, Tanwar and Jaunapurials threw what some are calling the most expensive wedding in history in March, a week-long bacchanal attended by an estimated 18,000 of their closest, um, friends. More strange, hilarious details from the Wall Street Journal:

The bride’s family gave the groom a Bell 429 helicopter, which can sell for more than $4 million. More than 100 different kinds of food were served, including Thai, Chinese and Indian dishes. It also featured a Domino’s pizza stand. The huge wedding tent took a month to build and featured Roman pillars, Venetian props and Chinese furnishings. The site was created on a sugarcane field outside Delhi.

Actor Neha Dhupia performed while Gurdas Maan rocked the audience with Punjabi pop.

The groom’s father, a member of the ruling Congress Party, had the chutzpah to call the wedding “simple,” a comment that’s roiling his political enemies. If the family was actually interested in showing fiscal constraint, they could have employed some of these helpful tips, most of which focus on ditching the most extraneous accoutrements. (I’ve seen a few parties set their own wedding playlist on an iPod, to amazing reviews.)

On that note, I need to go pack my dancing shoes. See y’all next week!

Though the sample size is small, it’s safe to say most temple and church basements I’ve visited over the years lack grandeur. For every gleaming piece of religious iconography, there’s a ceiling covered in peeling tiles, a stack of frayed hymnals, and a curtainless stage that’s sat unused for decades. Need rickety folding chairs? Churches across America have you covered.

The underbelly of the Sree Padmanabhaswamy Hindu Temple, in the southern Indian state of Kerala, looks much different than the holy basements to which I’m accustomed. Last week, temple officials announced that a seven-member excavation team, dispatched by the Indian Supreme Court, found centuries-old vaults filled with gold coins, sacks of diamonds, and solid-gold idols hidden below the temple’s main floor. The trove, originally stowed away by the royal family of Travancore (which still runs the temple) and valued at an astonishing $22 billion, is believed to be the richest ever discovered on the sub-continent. The Indian Times calls it the “mother of all treasure hunts.”

Temples in this part of the world often benefited from the largess of pious businessmen and the former royals they enriched. According to the director of the Kerala Council for Historic Research, “traders, who used to come from other parts of the country and abroad for buying spices and other commodities, used to make handsome offerings to the deity for not only his blessings but also to please the then rulers.” Temple building is a habit wealthy Indians have never really broken, either. To the consternation of hyper-rich American philanthropists like Bill Gates, new billionaires in South Asia are still more likely to donate their disposable income to religious institutions than evidenced-based aid programs, if they give to charity at all (PDF).

Because the sum of the Kerala treasure is so large, editorial boards have started asking whether or not the money could be put to public use. Kerala itself scores well on human development indices like life expectancy and literacy, but one-quarter of all Indians still live on less than $1.25 per day. The Supreme Court will make the final determination, and Kerala’s Chief Minister is convinced that the goodies will remain in the temple’s control. If they do, the Travancore clan better put the windfall to good use. A Bollywood production on the temple’s now-empty basement stage, perhaps? Just an idea ...

Few Americans weathered the Great Recession as nimbly as the Amish, a religious group with a (growing) population of 250,000. The distinctive mores of the Pennsylvania Dutch -- self sufficiency, a rejection of modern conveniences, conservation -- largely insulated this religious group from the economic pain so many of its Midwestern neighbors endured. And their rigid belief system, which emphasizes family and humility, instills in its members sound financial habits; the majority of young adults live and work at home, are obliged to save the majority of their earnings, and are taught that accruing debt brings shame.

Financial temperance, however, does not a good investor make, a lesson Sugarcreek, Ohio native Monroe Beachy found out the hard way. Armed with a 10th-grade education and some classes from H&R Block, the Amish man (now 77) began selling investment contracts 25 years ago to members and institutions in his community, including a school capital fund and a Mennonite church. Unfortunately for them, Beachy wasn’t exactly forthright about the haphazard investment decisions he subsequently made. From a February complaint filed with the SEC:

"From as early as 1986 through June 2010, Beachy, doing business as A&M Investments, raised at least $33 million from more than 2,600 investors through the offer and sale of investment contracts," the complaint states. "The vast majority of Beachy's investors were Amish. Beachy told the investors that their money would be used to purchase risk-free U.S. government securities, which would generate returns for the investors.”

"In reality, Beachy used investor money to make speculative investments. Until he filed for Chapter 7 bankruptcy in June 2010, Beachy never told his investors that he had lied about how he was investing their money. Beachy also never told his investors that he had experienced significant losses on the underlying investments. Beachy provided his investors with monthly account statements that showed fabricated gains.”

In total, Beachy lost $15 million of the original capital, and was technically insolvent as early as 1998. But while one bankruptcy trustee essentially equated Beachy with Bernie Madoff, the SEC filing does not actually accuse Beachy of profiting personally from the operation. It seems more likely that his goal was altruistic in the beginning, and when things started to go south, he panicked. (Beachy told the Washington Post that “of course it was not intentional.”)

The saga of the Amish “Ponzi scheme” is far from resolved. Because “participation as a creditor is abhorrent to [their] deeply held spiritual principles,” investors have asked the bankruptcy court Beachy entered to drop the case and let the community address the debts internally. If that happens, it’s tough to see how the fraud victims will recoup their losses entirely. Under their alternative plan, a committee would only distribute evenly the remaining $18 million in assets, not seek full restitution for the squandered funds.

Forcing Beachy to repay the additional $15 million, on the other hand, would put his brothers and sisters in a Catch-22; when an Amish member faces financial difficulties, he or she is expected to ask neighbors for assistance. In Beachy’s case, those would be the same folks he so inelegantly swindled.