"host" : 'mps.cnbc.com', isEEARegionCheck(); The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. [1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. 207, or tstolle@bcmd.org. We re-invest your money and the profit we earn goes to further such ministries as Christian education, care for children and senior adults, missions and new church starts. all audit engagements. The Cacaces were among 11,000 investors who lost a combined $580 million when the Baptist Foundation of Arizona, or BFA, a registered nonprofit, filed for Chapter 11 bankruptcy in 1999 in what prosecutors described as a Ponzi scheme. Investors who choose to roll their money into securities may be risking even bigger losses. Powered and implemented by FactSet Digital Solutions. outside an entity that suggests the possibility that management fraud may National Union Fire Insurance Company of Pittsburgh, Pa. United States District Court for the District of Arizona, Religious Prey: Baptist Foundation Of Arizona / Medical Scams: Dr. Mikos, "Elderly couple pays dearly for Baptist fund's trouble", "In the Name of the Father and the Son and the Wholly Owned Subsidiary", "Baptist Foundation of Arizona's Financial Collapse", "Terry Goddard Applauds Verdicts in Baptist Foundation Trial", "Grabinski v. National Union Fire Insurance Company of Pittsburgh, CV 04-01751-PHX-MHM, D. Az", "Final 5 Ariz. Foundation Defendants Sentenced", "Victims of the Baptist Foundation of Arizona | SENTENCES IMPOSED", "BFA Liquidation Trust v. Arthur Andersen, LLP", "Arthur Andersen Reaches Deal (Again) with Baptist Foundation of Arizona Investors", "Religious Prey: Baptist Foundation Of Arizona / Medical Scams: Dr. Mikos", https://en.wikipedia.org/w/index.php?title=Baptist_Foundation_of_Arizona&oldid=1137812926, Christian organizations established in 1948, Baptist organizations in the United States, Baptist denominations established in the 20th century, Articles lacking reliable references from May 2022, Creative Commons Attribution-ShareAlike License 3.0, This page was last edited on 6 February 2023, at 16:04. Sept. 20, 1999 Pastor Richard A. Kimsey amends his lawsuit against BFA to include the Arizona Southern Baptist Convention and Steve Bass, executive director treasurer of the conventions Executive Board. 'nid' : '100000099' return true; for Southern Baptist causes. The Reverend Ed Shaw suggested that the BFA "Explain the situation completely to investors; ask their forgiveness; let them know their gift of principal would help if they choose to give some or all of it. By Jonathan Weil Staff Reporter of The Wall Street Journal. return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; Crotts and Grabinski could face six to 23 years for each count. As for how Southern Baptists in Arizona and elsewhere will emerge from the mess created by the foundation, Bill May, president of the Arizona Church Growth Board, a unit of the state convention, says this: Its like family. It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. Instead, they referred the individual to former BFA Director, Jalma Hunsinger, who then purchased the property for US$1. New Era, which solicited investments largely from Christian institutions, folded in 1995 after taking in about $350-million in what had amounted to a Ponzi scheme. Aug. 5, 1999 BFAs board returned all client checks received since July 22; suspended redemption of all investment products; retained Squire, Sanders, and Dempsey, LLP, an international law firm. View Jasmine's full profile See who you know in common Get introduced . [2], The collapse of the BFA did not occur in a vacuum. propertys book value, not its diminished current value. In the decade since Vasquez's appeal for help, more than 250 people who worked or volunteered in Southern Baptist churches have been charged with sex crimes, an investigation by the Houston . A BFA liquidation trust was set up to sell off assets to allow investors to recover part of their money. The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. console.log('PUB-GDPR-CHECK'); typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); accounting treatment desired by management. The entities had no employees of their mps._urlContainsEmail = function() { } Login Here. real estate bubble burst and property values declined substantially. A jury on Monday found former foundation president William Crotts guilty of three counts of fraud and one count of illegally conducting an enterprise, according to the Arizona Attorney General's Office, which prosecuted the case. })(); Money & Investing. the firm should have issued either a qualified or an adverse opinion on the Click the link below to sign up for updates from Good Faith Media via our daily or weekly e-newsletters. } mps._queue.gptloaded.push(function() { [8] Indictments were handed down in April 2001; by July 2006, when BFA's president and CEO William Crotts and BFA's Chief Legal Counsel Thomas Grabinski were found guilty at trial on multiple counts of fraud, five other defendants had already pleaded guilty. The previously announced cash out plan is shelved after talking to more than 4,000 investors. MVPNs were marketed with the notion that they received a higher than average yield and that part of the investment's return was used for God's mission. if (typeof adunit != "string") return false; ALO in turn sold the stock to New Church Ventures, in exchange for a $1.6 million reduction in ALOs credit line owed to New Church Ventures. Essentially, in a transaction that favored a former director, the BFA accepted a piece of property (which the BFA itself declined to purchase) as collateral for a loan that amounted to US$4.9M more than the property's appraisal value. When the foundation was closed by the Arizona attorney general's office, it owed $570 million to investors and had assets worth an estimated $220 million. the substance of ALOs actions was to buy and hold BFAs overvalued Powered and implemented by FactSet Digital Solutions. (function(){ DIRECTOR OF OPERATIONS. .map(categoryPreference => parseInt(categoryPreference.split(':')[0], 10)); [14] The court signing off on the settlement meant that the BFA Liquidation Trust had standing should Andersen which was at the time being charged for issues surrounding Enron be unable to make that payment. CNBC_Comscore = 'CNBC_TV'; To this day, it is considered one of the largest affinity frauds in U.S history. July 22, 1999 BFAs board accepts the offers of President Bill Crotts, General Counsel Tom Grabinski and Controller Don Deardorff to relinquish their BFA responsibilities although remain as BFA employees. They were acquitted of 23 counts of theft. about the Baptist Foundation of Arizona. As recounted by The Wall Street Journal March 4, many of the foundations investors were elderly churchgoers attracted by the foundations offer of above-market returns on promissory notes and other investment products, and by its mission of using earnings for good works, such as building churches and nursing homes for the poor. [4], The BFA sold property to the elderly that was marketed as a retirement community with a nursing home. In 1989, Arizonas The Baptist Foundation of Arizona filed for bankruptcy in federal court last week, owing nearly $600-million to 13,000 people who had bought securities from the organization. d.setTime(d.getTime() + 60 * 60 * 24 * 30 * 1000); Oct. 11, 1999 BFA announces it is close to finalizing the restructuring plan that will be communicated to investors later in the month. Second, However, the State Board too heavily upon management assurances. 1991 to 1994 statements and an adverse opinion on the 1995 to 1997 financial This material may not be published, broadcast, rewritten, succeeded in 1984 by his son, William P. Crotts. Learning its principal note issuer was ALO, she checked public records and found its unaudited balance sheet listed liabilities of $109.7 million and assets at minus $6.9 million. return unescape(document.cookie.substring(cStart, cEnd)); Aug. 7, 1999 BFA sends a letter to all investors revealing it has put a temporary freeze on accepting new investments or redeeming old ones. In one year, there was an amazing increase in the Sign up for free newsletters and get more CNBC delivered to your inbox. 'cag[type_creator]' : 'Stacy Keach' , The BFA had issued millions of dollars in money-losing loans. Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. Information received from independent sources script.setAttribute("onerror", "setAdblockerCookie(true);"); Former general counsel Thomas Grabinski was convicted of three counts of fraud and one count of illegally conducting an enterprise. July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. The Mirage But sometimes in the. The second time, on the same day, he declared the same piece of property was valued at $960,000.[4]. Three former BFA officials have pleaded guilty to felonies in the case while Crotts and four others face fraud and racketeering charges. Twenty years later, Glen Crotts' son, William Pierre "Bill" Crotts, became the organization's second president. Here we see that Andersen chose to victimize BFAs victims yet again.. window._mpspixZ = (function(a){var b="abcdefghiklmnopqrstuvwxyz".split("");a||(a=Math.floor(Math.random()*b.length));for(var c="",d=0;d