baptist foundation of arizona scandal

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. purpose was to finance new Southern Baptist churches in Arizona. .split(',') The Baptist Foundation of California. var CNBC_MPS_FRANCHISE_TAG='american_greed'; var dynamic_yield_enabled = 1 Founded in 1948 to raise money for Southern Baptist causes, BFA and its subsidiaries and affiliates had marketed securities throughout the United States as retirement vehicles for investors and served as a custodian for tax-deferred Individual Retirement Accounts. Information received from independent sources [9], In 2002, Grabinski sued BFA's insurance carrier, National Union Fire Insurance Company of Pittsburgh, Pa. (National Union), for coverage of his legal fees per the Directors and Officers liability coverage purchased from National Union, plus damages. See Church Loan Guidelines for details or download a Church Loan Application. After a series of delays, a criminal trial for Crotts and Grabinski got underway in September 2005. } Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. assets were receivables from the insolvent ALO. Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. }; mps._urlContainsEmail = function() { isEEARegionCheck(); The BFA became dependent upon future investors to pay older investors and loan interest. mps._queue.adview = mps._queue.adview || []; An investigation being conducted by Arizonas Attorney Generals office and the states Corporation Commission has already revealed that the foundation used bogus transactions and accounting tricks to hide financial losses and mislead potential investors. if (typeof window === 'undefined') return; "These verdicts are a victory for thousands of victims who believed the promises made by the defendants," Attorney General Terry Goddard said in a statement. You may then be asked to log in, create an account if you don't already have one, The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. Auditors must exchange Nov. 5, 1999 BFA and the Investor Committee agree on a restructuring plan that includes petitioning to reorganize under Chapter 11 of the Federal Bankruptcy Code. . Investors in the Baptist Foundation of Arizona, which went belly-up in 1999 in the largest nonprofit bankruptcy in history, are suing Arthur Andersen, the foundation's auditors, for covering up the fact that the foundation was a fraud. Get this delivered to your inbox, and more info about our products and services. head.insertBefore(mpsload, head.firstChild) succeeded in 1984 by his son, William P. Crotts. Inadequate disclosure of losses on notes receivables due } fetch('https://geo.cnbc.com/info/').then(res => res.json()).then(result => { )+[a-zA-Z]{2,}))/; Then, BFA sold property to these companies and received notes receivable that were recorded at the typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); BFA informed Arizona Southern Baptist pastors of the financial crisis at a retreat held last weekend at the Wigwam Resort. Investors take a leap of faith and believe their money will be secure. Investors who agree to receive any money recovered in such litigation must give up their rights to pursue other legal action against the foundation, such as joining the two class-action lawsuits that have already been filed against the foundation and its affiliates. Clearly no. We look forward to serving you! 'nid' : '100000099' .map(categoryPreference => parseInt(categoryPreference.split(':')[0], 10)); All rights reserved. The foundation halted security sales in August, however, when state regulators found that it did not have the money to cover its debts to investors. return false; We want to hear from you. Two year earlier than Enron scandal, the Baptist foundation of Arizona also failed. //end OneTrust Redirect mps._queue.gptloaded.push(function() { if (result && result.geo && result.geo.country_code) { 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. Jalma Hunsinger, President and Director of Church Ventures (a company whose stated purpose was to build churches), paid $150,000 (equivalent to $196,000 in 2021). All rights reserved. In 1962 Pastor Glen Crotts became the first full-time president and was subsequently The Mirage But sometimes in the. The Arizona Southern Baptist Convention was founded in 1928. Defense lawyers said they plan to ask Judge Kenneth Fields to dismiss the charges, and plan to appeal if he doesn't. 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 convention's Executive Board. At the center of the scandal is Crotts, a charismatic 53-year-old lawyer, who took over the BFA from his father in 1982. You have to deal with the embarrassment of it, the cleanup of it, but it doesnt put you out of business., Debra E. Blum is a freelance writer and has been a contributor to, An Update for Readers on Our New Nonprofit Status. 'adunits' : 'Default' , or, indirectly, from BFA itself. Hoover was a member of the Baptist Foundation Board in the late 1970s and served on the board until 1999 when the organization filed for . In his resignation letter, Tresch told BFA officials they have placed themselves in a position of civil and criminal liability. }, mpsopts = { About 11,000 investorsmany of them elderly members of Baptist churches in Arizona and elsewherelost more than $550 million. if (!mps._ext || !mps._ext.loaded) { 'hline' : 'American Greed' , In applying SAS 99, auditors should plan and execute every audit return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; // check for region and redirect if country is in EEARegion real estate in exchange for notes receivable valued in the millions of dollars. One of ALOs primary purposes was to buy and hold non-producing or overvalued investments in real estate so BFA could avoid writing them down as losses. They can either cash out of the foundation, receiving 20 per cent of the value of their investments and the interest due to them, or elect to receive shares of stock in a new for-profit company that will be publicly traded. script.setAttribute("src", "//www.npttech.com/advertising.js"); Former Alcor employee makes harsh allegations against cyronics foundation. View Jasmine's full profile See who you know in common Get introduced . The clause was depicted as a housekeeping measure, Arizona Attorney General Janet Napolitano said, according to the paper, which quoted her as declaring, Arthur Andersen lied., Napolitano, according to a news release from her office, will be seeking severe penalties against Andersen LLP (formerly Arthur Andersen) and others., This is an absolute outrage, Napolitano said. Southern Baptist Foundation Scheme in Arizona. d.setTime(d.getTime() + 60 * 60 * 24 * 30 * 1000); is the cornerstone of a multifaceted effort by the accounting profession to Sept. 25, 1999 BFA creates an Investors Committee to meet and negotiate with the BFA on behalf of their fellows.. (a) The transfer or acquisition of the controlling interest oc-curred within a taxable transfer period. The New Independent Fundamental Baptist Movement (New IFB) was spearheaded in part by Steven Anderson, another well-known anti-LGBTQ pastor. 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. accounting treatment desired by management. The auditors were Arthur Andersen, the same firm that audited Enron. MVPNs were "fraudulently represented as one which could be redeemed at any time, although with an interest penalty. implementation is being urged. Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. But the foundation has operated independently of the convention, and state regulators say it is unlikely that the statewide group would be held liable for the foundations actions. Quotes displayed in real-time or delayed by at least 15 minutes. mps._adsheld = []; } View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. In BFA's early days, it focused its attention [8] Crotts was sentenced to eight years in prison, while Grabinski was sentenced to six years; the two convicted criminals were required to pay $159 million (equivalent to $214 million in 2021), each, in restitution. if (window.mps) { BFA employees sold investment products through circulars touting not one investor has ever lost a penny of their investment or the interest they earned. But by the late 1980s, prosecutors say, the BFA was losing money as Arizonas once-robust property market began to cool off. The newspaper also quoted Arizona Corporation Commission Chairman Bill Mundell as saying, How do you break the news to an elderly couple who risked their life savings? Redirecting. document.cookie = "__adblocker=" + (adblocker ? that ALO had a negative net worth of $116 million and had been losing more What clues did the Like many {"@context": "https://schema.org","@type": "WebPage","url": "https://www.cnbc.com/id/100000099","keywords": ["CNBC TV","Primetime Shows 2","American Greed","source:tagname:CNBC US Source"]} }; The BFA Liquidation Trust, which is seeking to recover the investors funds, immediately took action. Management responded to the new environment by structuring accounting transactions All eyes are on Houston this week, as jury selection gets underway for the long-awaited criminal trials of former Enron leaders Kenneth Lay and Jeffrey Skilling on charges of corporate fraud. Site by Mere. if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { Feeling pressure to show profits, investigators say, BFA officials hid losses in a web of for-profit and non-profit subsidiaries, which were supposed to be economically independent but really werent. In 2002 Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. } mpsload.id = "mps-load"; var CNBC_Premium = CNBC_Premium || {}; 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. Napolitanos news release said she will seek the administrative equivalent of the death penalty for Andersen in Arizona by asking the state Board of Accountancy to revoke the firms registration. Buckner also used Anderson and turned the information over to the firm. [14] Christianity Today reported that the timing of this court approved settlement avoided "the worst case scenario for Baptist Foundation investors" of Andersen being convicted in its then ongoing criminal case regarding its audits of Enron, then quickly filing "for bankruptcy-court protection" from any civil lawsuits not yet settled in a court. The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. operations from collapsing was a constant influx of new investor money that mps._queue.gptloaded = mps._queue.gptloaded || []; Oct. 7, 2009 -- It's a practice that appeals to some people but disturbs many others: freezing the deceased in the hope . auditors overlook? Audit. The BFA consistently sold the concept that its main objective was to help its investors serve the work of the Arizona Southern Baptist Convention, while also providing them with favorable returns, as stated in a BFA investor brochure: We are a ministry dedicated to serving the Lord and furthering Southern Baptist and other Christian causes.

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