What Does a Criminal Look Like?

A group of Kentucky men would prefer to spend time in jail time rather comply with vehicle safety rules.

As you can see from their booking photos, the men are Amish and belong to the Old Order Swartzentruber Amish group. They say their religious beliefs forbid the placement of bright orange safety triangles on the backs of their buggies. They believe that displays of “loud” colors should be avoided, along with the use of “worldly symbols.” Swartzentruber Amish believe such symbols indicate the user no longer trusts fully in God.

The orange triangles are required on all slow-moving vehicles, according to Kentucky state law. The Swartzentruber Amish use along with lanterns and red reflector lights, but refuse to use the orange triangle.

Is this a case of a bad rule, over-zealous enforcement, or criminal behavior? The compliance aspect of the situation caught my attention. The ethical, religious, and legal aspects of the situation are numerous.

The goal is to make sure that all vehicles on public roads are visible, especially slow-moving vehicles. That seems to be a reasonable goal.

This is not the first time the Amish community has clashed over this issue. In 2003, the Swartzentruber families in Nicktown Ohio successfully appealed after they refused to put orange reflective triangles on their horse-drawn buggies. They were allowed to mount less gaudy gray tape. Other states already accommodate the religious beliefs of conservative Amish groups by allowing the use of reflective tape instead of triangles.

I fall on the side of the Amish on this one. Suppose the rule was not for a triangle, but a six-pointed star. SOme would argue that it is merely an icon. Others will argue that it has obvious religious implications. The triangle symbol does not mean much to me, but it does to this Amish sect.

They don’t like bright colors. That seems to conflict with the need for visibility. One of the failings in the orange triangle rule is that the regulators had no studies to show that the orange triangle decreased the rate of collisions more than gray reflective tape the Amish were willing to use.

From a compliance perspective, it’s always better to have a clear, simple rule. When the situation gets complicated by deeply held beliefs that conflict with the rule, it’s time to revise the rule or allow deviations from the strict rule.

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The Amish Madoff

The Securities and Exchange Commission filed charges against Monroe L. Beachy, a 77-year-old Amish man from Sugarcreek, Ohio. They found the Bernie Madoff of the Amish.

Beachy targeted his fellow Amish in his alleged fraud. He raised more than $33 million from as early as 1986. Beachy enticed investors by promising interest rates that were greater than banks were offering at the time. Beachy told his investors that their money would be used to purchase risk-free U.S. government securities. Many of Beachy’s investors treated their investment accounts with Beachy like money market accounts, from which they could withdraw their money at any time. In reality, Beachy used the money to make speculative investments in junk bonds, mutual funds, and stocks.

By the time Mr. Beachy filed for bankruptcy in June 2010, less than $18 million of the original $33 million of investor money remained.

I would guess that Beachy started off doing the right thing, but made a bad investment along the way. Rather than be honest with his investors, he took greater risks to try and make back the earlier loss, missing again and again.

Like Madoff, it sounds like he was offering a modest rate of return. That would allow this Ponzi scheme to go on longer and longer.

Like Madoff, the fraud continued for decades. Because of the length of Mr. Beachy’s alleged scheme, generations of families were affected. Older generations of Amish investors would referred their children to Beachy.

Unlike Madoff, Beachy had actually invested the money. Just not in the safe investments he promised to his investors.

UPDATED: The Washington Post has a great story with some background on the fraud: In an Amish village, the SEC alleges a Madoff-like fraud by David S. Hilzenrath.

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Amish Buggy Sign is by Daniel Schwen