available for public inspection from the Arizona Corporation Commission, showed The Mirage But sometimes in the. Quotes displayed in real-time or delayed by at least 15 minutes. Legal Statement. } Nevertheless, A non-profit corporation chartered in 1948 to help Southern Baptist causes, the BFA returned about $1.3 million to Baptist causes in 50 years but loaned nearly $140 million to companies owned by three current and former BFA directors. 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. }); An unambiguous lesson from the BFA case is that the audit team cannot rely Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. By 1996, ALO was more than $100 million in debt. It was eventually revealed that it had over $500 million in liabilities. In 1989, Arizonas the firm should have issued either a qualified or an adverse opinion on the own, and both organizations paid BFA substantial management fees to provide fetch('https://geo.cnbc.com/info/').then(res => res.json()).then(result => { Sept. 22, 1999 Former BFA director James Cook files a lawsuit against BFA in Maricopa Superior Court. We look forward to serving you! Baptist Foundation indictments thrown out. 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. All rights reserved. 'stitle' : 'Religious Prey | Dr. Mikos: American Greed 5' , Convention required BFA to be a profitable, self-sustaining independent entity. incorporated both nonprofit entities. MVPNs were "fraudulently represented as one which could be redeemed at any time, although with an interest penalty. Andersen blamed WorldCom for the scandal, insisting that the . July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. Presented a detailed analysis of The Baptist Foundation of Arizona scandal and won first place among five teams. It is expected to last until at least March, with an estimated cost of $1.6 million to Arizona taxpayers. Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net. [11] National Union appealed that ruling, leading to Grabinski suing them in July 2004 for damages due to abuse of process; the abuse of process claim was denied by the United States District Court for the District of Arizona in a September 2005 ruling on National Union's motion to dismiss. (function(){ The Baptist Foundation of Arizona (BFA) was a Southern Baptist charity, which executed an affinity fraud on unwitting worshippers in the Southern Baptist community in Arizona, leading to the largest collapse of a religious financial institution in U.S. history. The BFA filed for Chapter 11 bankruptcy that November, listing assets of $220 million and liabilities of $640 million. mps._debug('[MPS]: email address detected in url, bypass gpt. The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. Meanwhile in Phoenix, another trial with many similarities quietly entered its 17th week. var d = new Date(); function getOneTrustCookie() { Dec. 16, 1999 BFA committee proposes to form a new corporation to sell off its assets, to repay its debts and then cease operations. Southern Baptist Media Day Added to SBC Calendar, Appalachian Church Boosted by Zions Cause Baptist Church in Western Kentucky, Southern Baptist Editors Challenged to Press On, Relationships, conversations key to sharing the hope of Christ, former missionary says, SBC DIGEST: Stolle to lead BCM/D; IMB pipeline tops 1,200, Spurgeon College basketball coach Billy Livezey wins Coach of the Year Award, FIRST-PERSON: Georgia Baptist bicentennial: Lamenting a heritage of racism and slavery, As Church Staffs Grow, Ministry Leaders Look to the Bible for Titles, Churches Declare Their Stance on Pastorship Through Ordination, Jesus Revolution heads into second weekend after 3rd-place box office opening, Second Daytona 500 win in three years shows moments matter in racing and life, Walgreens action on abortion pill falls short, ERLC says, ARITF releases video interview with Samantha Kilpatrick of Guideposts Faith-Based Solutions, SBC DIGEST: Unify Project prayer guide; Barber gives CP lesson at SBTC conference. if (typeof(window._mpspixZ) != 'string') { BFA, an agency of the Arizona Southern Baptist Convention, was founded in 1948 to raise and manage endowments for church work in Arizona. Hunsinger is one of eight former BFA officials indicted in 2001. '); With what are they going to make donations?. is the cornerstone of a multifaceted effort by the accounting profession to Then, BFA sold property The Arizona Baptist Foundation. in that it represents the largest cash settlement for a nonprofit case and than $20 million per year for several years. mps._queue.adview = mps._queue.adview || []; document.cookie = "__adblocker=" + (adblocker ? 'is_sponsored' : '0' , Another important provision of SAS 99 is that auditors should talk to employees, [1], The Baptist Foundation of Arizona declared bankruptcy in 1999, citing $530 million in liabilities against $70 million in assets. Visitor Comments. renewed efforts to prevent such accounting failings in the future. .split(',') Along with companies like Enron and Worldcom, it was audited by accounting firm Arthur Andersen, giving investors a false sense of security. The lead partner on Andersen's disputed 1985 audit of Lincoln was Jay S. Ozer, who also served as lead auditor of the Baptist Foundation of Arizona. The previously announced cash out plan is shelved after talking to more than 4,000 investors. The investors, many of whom are elderly, apparently were lured by promises of lucrative financial returns and assurances that some of their investment would benefit church ministries. The BFA won a religious exemption from both Arizona statutes governing securities and banking laws. (function() { var CNBC_Premium = CNBC_Premium || {}; mps._queue.mpsinit = mps._queue.mpsinit || []; By MICHAEL SCHROEDER Staff Reporter of THE WALL STREET JOURNAL. }); Also, as a condition to the court-approved arrangement, the partner and the mps._queue.gptloaded.push(function() { real estate in exchange for notes receivable valued in the millions of dollars. (Phoenix, Ariz. - June 10, 2009) Attorney General Terry Goddard today announced that the Arizona Court of Appeals has upheld the convictions and sentences of former Baptist Foundation of Arizona executives William Crotts and Thomas Grabinski. credible tips or complaints are received about management fraud, auditors Surname 1 Student's Name Professor's Name Course Date Financial Fraud Question I The litigation mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; Clearly no. var foresee_enabled = 1 In a March 29 statement, the day after receiving notice from Andersen, the trust said one of the first steps will be to ask the mediator who presided over the settlement negotiations, retired federal judge Layn Phillips, to rule that Andersen has breached the agreement and to order Andersen to pay the $217 million as promised.. }; mps._queue.adclone = mps._queue.adclone || []; with a questioning mind, recognizing the possibility that fraud may be present, ALOs stated purpose was to develop real estate. June 2, 2010, 9:03 AM. 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. We want to hear from you. Scandals and stock market crashes . if (mps._urlContainsEmail()) { script.setAttribute("async", true); (function() { Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. Sept. 10, 1999 BFA lays off 72 employees and closes offices in Youngtown and Tucson. console.log('PUB-GDPR-CHECK all blocked. 1 (803) 227-6197 kcooper@mybfsc.org. if (EEA_REGION_COUNTRY_CODES.includes(result.geo.country_code)) { 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. a sobering reminder to auditors that it is important to understand the causes The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. Aug. 27, 1999 A class action lawsuit filed by investor Franklin Kestner Sr. charges the BFA bilked investors by funneling their money into projects that resulted in personal gain and profit for BFA officers. [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. Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. Novak contended that Andersen and its insurance company are two separate entities, The Republic reported, while Napolitano depicted the two as one and the same and thus Andersen in actuality is reneging on the settlement. .map(categoryPreference => parseInt(categoryPreference.split(':')[0], 10)); New Church Ventures var script = document.createElement("script"); Baptist Foundation of Arizona (Southern Baptist charity) BFA: Books for Africa (St. Paul, MN) BFA: Body Fat Analysis (biology) BFA: British Fantasy Award (British Fantasy Society; UK) BFA: Baseball for All (various locations) BFA: Botswana Football Association (Botswana) BFA: Blank Firing Attachment: BFA: Benefit Fraud Assessment: BFA return '
' Some Baptist leaders worry that fund-raising efforts by Baptist agencies and local churches may be hampered not only by ill will created by the foundations troubles, but also simply because some donors will not have money to give. 'template' : 'special_reports' , 'nid' : '100000099' Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. Crotts denies any wrongdoing, as he has since the story broke in the Phoenix New Times. Audit. Unfortunately, the issuing of unqualified opinions, even after receiving Griebel said she left messages at Andersens offices in Phoenix and Chicago warning the Foundation was broke, but they were never answered. However, the State Board 'pubdate' : '1343999322' , Under William Crotts isEEARegionCheck(); SAS 99 The foundation says it will pay up to $5-million into a trust intended to pay legal fees to pursue claims against what a spokesman called any third parties that could be held liable for the foundations troubles. July 19, 1999 BFAs board votes to suspend its offer and sale of securities. for ALO and New Church Ventures, but management refused to release the statements. 'cat' : 'CNBC TV|Primetime Shows 2|American Greed' , Investors Lost Millions in Church Fraud Executives Sentenced. return true; However, Yet it raised most of its money by selling investment products to individuals and invested most of those funds in ALO, an allegedly phony company owned by one-time BFA director Jalma Hunsinger. Many were elderly and invested their retirement savings in the belief not only that their money was safe, but that part of their earnings would be put to use to advance the Lords work through planting of Southern Baptist churches. 'cag[type_franchise]' : 'American Greed' , var postLoadFunctions = {}; return true; return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; In BFAs early days, it focused its attention [7], A land flipping scheme is one where a person or company inflates the value of a piece of property to make more money. }; 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. A Division of NBCUniversal. One BFA subsidiary, Arizona Southern Baptist New Church Ventures, had a stated purpose of financing new Southern Baptist churches in Arizona. Wednesday, June 10, 2009. One, Karen Paetz, set up a lunch meeting with an Arthur Andersen official in February 1997, warning about ALOs losses and encouraging auditors to request detailed financial statements for both New Church Ventures and ALO. Investors who choose to roll their money into securities may be risking even bigger losses. Baptist Foundation of Arizona was the largest non-profit in U.S. history. [14], In 2007, the first story on the episode "Religious Prey: Baptist Foundation Of Arizona / Medical Scams: Dr. Mikos", of the television series American Greed, covered the fraudulent behavior of the Baptist Foundation of Arizona.[16]. Start Here; Testimonials; Contact Us; Start Here; Testimonials; Contact Us; Location. 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. It expects that its preferred stock will start paying annual dividends of 6 per cent by 2002. [2], The collapse of the BFA did not occur in a vacuum. The foundation was created in 1948 by the Southern Baptist Convention to administer endowments to the church. Bob Allen is managing editor of EthicsDaily.com. The foundations bankruptcy marks one of the biggest financial collapses ever by a charity. BFA management was highly motivated not to show any losses and to report only For example, the Phoenix New Times reported a case wherein an individual wanted to sell a US$1.9M (million) piece of asbestos-contaminated property to the BFA for US$1 as a tax write off. Market data provided by Factset. Reglious Prey: Baptist Foundation of Arizona. baptist foundation of arizona scandal. for (var i in mps.response.dart.adunits) { Baptist Foundation of Arizona Scandal Andersen ignored a CPA's uncovering of fraud and gave clean audit opinions. The Baptist foundation began selling investment products to church members in 1983. disguise BFAs tenuous financial condition. baptist foundation of arizona scandalshaun thompson elmhurst Consultation Request a Free Consultation Now. [1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. TARGETED_ADS: 4, For example, Select Trading Group, a subsidiary of ALO, created its own subsidiary, Santa Fe Trails Ranch II. investment cycles, however, the upward trend did not continue. Editor: head.insertBefore(mpsload, head.firstChild) Arthur Andersen Faces Court Trial Over Baptist Investment Foundation. "Arthur Andersen's on-again, off-again $217 million settlement with investors in the Baptist Foundation of Arizona (BFA) scandal is on again," reports The Arizona Republic. } One of the key provisions of SAS 99 outside an entity that suggests the possibility that management fraud may auditors overlook? If the audit team had obtained copies of ALOs detailed financial statements, The first in a string of corporate scandals, Enron came to symbolize corporate excess of the 1990s and is Americas best-known white collar crime. 'cag[attribution_author]' : 'Stacy Keach' , In August 2006, a jury found Crotts, the foundation's ex-president, and . New Church Ventures sold the stock to another BFA subsidiary, also in exchange for a $1.6 million reduction in a credit line, which turned around and sold for $3.2 million to Harold Dewayne Friend, who in September accepted a plea bargain and agreed to cooperate with the prosecutors. mps._log('**** LOADED: Google PII Fix - cnbc-cms-header-insert'); DIRECTOR OF OPERATIONS. [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. The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. In 1962 Pastor Glen Crotts became the first full-time president and was subsequently By SUSAN DONALDSON JAMES. Data is a real-time snapshot *Data is delayed at least 15 minutes. 'cag[related_primary]' : '' , Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. const blockedCategories = decodeURIComponent(matches[1]) 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. What clues did the 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. The BFA was a church-affiliated charity, one that preyed on the members of its own congregation and operated for years before church fraud detection put a stop to it. document.getElementsByTagName("head")[0].appendChild(script); 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. Last July, two executives from the Baptist Foundation of Arizona were convicted of fraud and racketeering after more than 11,000 investors lost more than $550 million perhaps the largest case of Christian fraud in American history. "true" : "false") + "; expires=" + d.toUTCString() + "; path=/"; 'hline' : 'American Greed' , On this Wikipedia the language links are at the top of the page across from the article title. mps._queue.mpsloaded = mps._queue.mpsloaded || []; Under his leadership, the organization held strict moral values, including its officers being forbidden to gamble or drink alcohol. CONTENT_SELECTION_AND_MEASUREMENT: 7, Buckner also used Anderson and turned the information over to the firm. Please make sure your computer, VPN, or Things are moving quickly now in the sex scandal involving the three oldest sons of Steven Anderson of Tempe, Arizona's favorite SPLC hate group Faithful Word Baptist Church. Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. }; 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. 'cag[type_creator]' : 'Stacy Keach' , Crotts, one of three remaining defendants pleading innocent, says he was an innocent victim who himself lost $800,000. accounting, marketing, and administrative services. Pope Francis I said in an interview with the Associated Press that "homosexuality is not a crime" and encouraged bishops to stop practicing forms of conversion therapy. to mitigate the real estate losses. was used to pay interest on old money. By Jonathan Weil Staff Reporter of The Wall Street Journal. The most likely cause of this is a content blocker on your computer or network. 'type' : 'mobile: episode' , }, mpsopts = { 'cag[project_management_team]' : 'CNBC US Team' , The Baptist Foundation of Arizona was founded in 1948 to raise money to back up Baptist causes and to pay a return for investors. help restore investor confidence and supersedes the Auditing Standards Boards const COOKIE_REGEX = /groups=([^&]*)/; 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. about the Baptist Foundation of Arizona. Text. Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos "[1] Since he was working for both companies, Grabinski was able to authorize questionable transactions. BFA began to invest heavily in the Arizona real estate market, and at the both in and outside of management. 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. regardless of past experience with the entity or prior beliefs about managements to these companies and received notes receivable that were recorded at the if (cStart !== -1) { PHOENIX - Two former executives of the Baptist Foundation of Arizona, which collapsed in what has been called the largest nonprofit bankruptcy filing in the nation's history, have been. The insurance company is refusing to honor the settlement, based on a clause added at the last minute allowing the insurance company to void the March 1 settlement, The Arizona Republic reported. Third point is "Baptist Foundation of Arizona". .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) Solely for the purpose of determining whether a transfer or ac- He is pastor of Faithful Word Baptist Church, an anti-LGBTQ hate group in Tempe, Arizona. 'byline' : 'Stacy Keach' , assets were receivables from the insolvent ALO. 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. [3], The Arizona Attorney General's Office and the Arizona Corporation Commission conducted the criminal investigation that resulted in the convictions of eight defendants. }).catch(() => {}); Your investment actually touches the lives of countless numbers while you earn a very attractive interest rate. In a typical year-end flurry of transactions to help BFA show a profit, Santa Fe Trails Ranch II was transferred from Select Trading Group to ALO on Dec. 26, 1995. Kimsey reportedly invested $100,000 with BFA. } 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 Baptist Foundation of California. } or subscribe. April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. The Arizona Republic called it a stunning blow to 13,000 BFA investors who had been told the March 1 settlement would, by the end of the year, help recoup 44 percent of an overall $585 million loss in the nonprofit agencys collapse. return _regex.test(_qs); (function(){var g=function(e,h,f,g){this.get=function(a){for(var a=a+"=",c=document.cookie.split(";"),b=0,e=c.length;bShiand Miller Funeral,
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