}; This caused a lot of people, more than 11,000 investors, to lose their life savings ($550 million). Feb. 19, 2002 4:00 pm ET. window._mpspixZ = (function(a){var b="abcdefghiklmnopqrstuvwxyz".split("");a||(a=Math.floor(Math.random()*b.length));for(var c="",d=0;d 0) { Redirecting. mps._urlContainsEmail = function() { Got a confidential news tip? if (typeof window === 'undefined') return; Oct. 7, 2009 -- It's a practice that appeals to some people but disturbs many others: freezing the deceased in the hope . mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; "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. In order to remove those loans from its books, the BFA secretly funneled money to a subsidiary. var w=window;if(w.performance||w.mozPerformance||w.msPerformance||w.webkitPerformance){var d=document;AKSB=w.AKSB||{},AKSB.q=AKSB.q||[],AKSB.mark=AKSB.mark||function(e,_){AKSB.q.push(["mark",e,_||(new Date).getTime()])},AKSB.measure=AKSB.measure||function(e,_,t){AKSB.q.push(["measure",e,_,t||(new Date).getTime()])},AKSB.done=AKSB.done||function(e){AKSB.q.push(["done",e])},AKSB.mark("firstbyte",(new Date).getTime()),AKSB.prof={custid:"1320688",ustr:"",originlat:"0",clientrtt:"138",ghostip:"61.19.12.55",ipv6:false,pct:"10",clientip:"202.6.19.60",requestid:"966c667",region:"9392",protocol:"",blver:14,akM:"e12",akN:"ae",akTT:"O",akTX:"1",akTI:"966c667",ai:"265598",ra:"true",pmgn:"",pmgi:"",pmp:"",qc:""},function(e){var _=d.createElement("script");_.async="async",_.src=e;var t=d.getElementsByTagName("script"),t=t[t.length-1];t.parentNode.insertBefore(_,t)}(("https:"===d.location.protocol?"https:":"http:")+"//ds-aksb-a.akamaihd.net/aksb.min.js")}. mps.response.dart.adunits[i].data = ''; Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. The Baptist Foundation of Arizona was established with the pretense of serving Southern Baptist causes. Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. 1 (803) 227-6197 kcooper@mybfsc.org. Investors who choose to roll their money into securities may be risking even bigger losses. Contact (909) 738-4000 info@bfcal.org. 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. } script.setAttribute("onerror", "setAdblockerCookie(true);"); Tuesday, September 5, 2006. [8] The trial of Grabinski and Crotts was the longest criminal jury trial in the history of the state of Arizona. In other words, it had become a classic June 7, 2022 . This material may not be published, broadcast, rewritten, or redistributed. 'adunits' : 'Default' , 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. Foundation officials and others involved in the investment scandal that led to the collapse may eventually face both civil and criminal charges. 'template' : 'special_reports' , CT previously covered the scandal involving Jack Schaapformer pastor of the largest independent Baptist congregation, First Baptist Church of Hammond, Indianawho was fired in 2012 and . operations from collapsing was a constant influx of new investor money that head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); [4], The BFA sold property to the elderly that was marketed as a retirement community with a nursing home. Andersen and its representatives pretended to negotiate in good faith, but in fact never had any intention of making good on their part of the settlement. ', window.location); Anderson asked for the documents and BFA officials refused to provide them. The foundations bankruptcy marks one of the biggest financial collapses ever by a charity. When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. })(); In 1998 Deeann Greibel, a financial planner and CPA in Mesa, Ariz., looked into BFA finances on behalf of a client and found it was heavily underwritten with IOUs. [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. with a questioning mind, recognizing the possibility that fraud may be present, s.src = "https://fm.cnbc.com/applications/cnbc.com/resources/files/2020/03/28/VisitorAPI.js"; 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. [1], The Baptist Foundation of Arizona declared bankruptcy in 1999, citing $530 million in liabilities against $70 million in assets. Your investment actually touches the lives of countless numbers while you earn a very attractive interest rate. the State Board of Accountancy: Arthur Andersen, without admitting or denying any fault, settled an investors Reflection and resources at the intersection of faith and culture through an inclusive Christian lens. 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. Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. Mutual Fund and ETF data provided by Refinitiv Lipper. As a nonprofit company, ALO filed its financial statements each year with is the cornerstone of a multifaceted effort by the accounting profession to Also in 1998, an alternative Phoenix newspaper, the New Times, ran a series of 13 investigative reports alleging fraud and insider deals. if (typeof(window._mpspixZ) != 'string') { There are thousands and thousands of people in our communities who have lost their savings or what they counted on for monthly income, says C. Truett Baker, former president of the Arizona Baptist Childrens Services, an agency of the states Southern Baptist Convention. and New Church Ventures $173.6 million. First case: The Baptist Foundation of Arizona invests and loses millions entrusted by churchgoers, and its mission ends in scandal. }, mpsopts = { It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. on funding church start-ups and providing aid for children and the elderly. cEnd = document.cookie.length; Under William Crotts former board members, controlling these new companies. The CPA Journal. Year after year, Arthur Anderson audits the Baptist Foundation of Arizona, giving the non-profit group its stamp of approval and a clean bill of financial health. )+[a-zA-Z]{2,}))/; "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. 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. auditors overlook? Information received from independent sources Crotts, one of three remaining defendants pleading innocent, says he was an innocent victim who himself lost $800,000. The foundation was created in 1948 by the Southern Baptist Convention to administer endowments to the church. 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. Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. The foundation was created 51 years ago by the Arizona Southern Baptist Convention to raise money and manage the endowments of Southern Baptist charities, and through its history, the foundation has provided a total of $1.3-million in gifts to church causes. 'path' : '/id/100000099' , The BFA opens a web site address www.bfaz.org to answer questions. var mps = mps || {}; Two year earlier than Enron scandal, the Baptist foundation of Arizona also failed. leadership, the foundation engaged in a major strategic shift in its business. console.log('PUB-GDPR-CHECK oneTrustCookie: ', oneTrustCookie); ALOs stated purpose was to develop real estate. [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. We look forward to serving you! // execute Click the link below to sign up for updates from Good Faith Media via our daily or weekly e-newsletters. 'pubdate' : '1343999322' , . }; Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. 2023 FOX News Network, LLC. Please make sure your computer, VPN, or }).catch(() => {}); statements. In August 2006, a jury found Crotts, the foundation's ex-president, and . The Baptist [10][11] In February 2004, the jury in the Arizona Superior Court civil trial found in favor of Grabinski, with the Court ordering National Union to pay Grabinski $2.5 million (equivalent to $3.6 million in 2021). Login Here. 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. Nov. 7, 1999 BFA unveils a restructuring plan that would give investors the choice of a cash-out option worth 20 cents on the dollar or shares in a newly created for-profit company. } 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. With Enrons collapse, Andersen earned the distinction of having been auditor for both the largest corporate bankruptcy and largest bankruptcy of a non-profit in U.S. history. It filed for bankruptcy in 1999 after many of the foundation 's executive had been convicted of condemnable charges or indicted for fraud. in that it represents the largest cash settlement for a nonprofit case and 'cag[type_creator]' : 'Stacy Keach' , 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. help restore investor confidence and supersedes the Auditing Standards Boards var script = document.createElement("script"); Former general counsel Thomas Grabinski was convicted of three counts of fraud and one count of illegally conducting an enterprise. } was placed on probation, requiring that his work be monitored for two years In the case, it claims that Arthur Anderson gave investors a false sense of security after giving out Anderson issued a clean audit in order to attract new investors. Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos baptist foundation of arizona scandalshaun thompson elmhurst Consultation Request a Free Consultation Now. 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. Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. In 1992, records indicated that the company had lost $3.2 million due to questionable transactions. MVPNs were "fraudulently represented as one which could be redeemed at any time, although with an interest penalty. a sobering reminder to auditors that it is important to understand the causes the substance of ALOs actions was to buy and hold BFAs overvalued 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. Surname 1 Student's Name Professor's Name Course Date Financial Fraud Question I The litigation Inadequate disclosure of losses on notes receivables due be taking place requires a higher degree of due diligence by auditors. their life savings. The Phoenix-based. var mpscall = { receivables only because of funds being obtained from either New Church Ventures, "[6] Elder law attorney Leas wondered why BFA would sell the elderly, "an investment that would tie up more than two-thirds of their non-residential assets in an investment that would be unavailable for five years! outside an entity that suggests the possibility that management fraud may or redistributed. document.cookie = "__adblocker=" + (adblocker ? Paul D. Nelson, president of the Evangelical Council for Financial Accountability, a watchdog group in Winchester, Va., says that the Arizona foundations bankruptcy, like New Eras high-profile collapse, reflects poorly on religious organizations as a whole. mpsload.id = "mps-load"; mps._queue.gptloaded = mps._queue.gptloaded || []; Arizona Officials Say Andersen Auditors Played Role in Fraud by a Baptist Group. } }; A Division of NBCUniversal. mps._queue = mps._queue || {}; or, indirectly, from BFA itself. changed under new management. var dynamic_yield_enabled = 1 Hunsinger is one of eight former BFA officials indicted in 2001. for Southern Baptist causes. This settlement takes on a sad historical significance Napolitanos office began its legal initiatives against Andersen on behalf of the Arizona Accountancy Board in December 2000 over allegations the firm failed to conduct proper audits on BFAs financial statements. some red flag warnings that fraud was occurring, led to the Andersen settlement. 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. Then, BFA sold property If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com. This page contains information The Cult Education Institute has gathered. (a) The transfer or acquisition of the controlling interest oc-curred within a taxable transfer period. April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. To this day, it is considered one of the largest affinity frauds in U.S history. Two former executives committed fraud to hide their financial mismanagement of the Baptist Foundation of Arizona, but they didn't line their own pockets, jurors said in convicting them Monday. In 1997 a former employee sought a job at Buckner Baptist Benevolences in Dallas that BFA was hiding losses in bad bank loans, while conducting a Ponzi scheme, which at one point included a strategy of encouraging elderly people to borrow against their homes and invest proceeds with the Foundation. PHOENIX Two former executives with the Baptist Foundation of Arizona were sentenced to prison Friday and ordered to repay millions for defrauding thousands of investors in a botched. "I just hope they realize they defied (God's) word by mishandling money that people entrusted to them," said Virginia Branch, 77, of Prescott, who lost $400,000 she said would have helped her grandchildren pay for college. Oct. 11, 1999 BFA announces it is close to finalizing the restructuring plan that will be communicated to investors later in the month. We want to hear from you. July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. The New Independent Fundamental Baptist Movement (New IFB) was spearheaded in part by Steven Anderson, another well-known anti-LGBTQ pastor. July 19, 1999 BFAs board votes to suspend its offer and sale of securities. return false; 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. Also, as a condition to the court-approved arrangement, the partner and the A former BFA director In a Good bank-bad bank scheme, the two companies manipulate transactions to favor the public institution while using the "bad bank" to hide the deficiencies. var _regex = /([^=&/<>()[].,;:s@"]+(.[^=&/<>()[].,;:s@"]+)*)@(([[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}])|(([a-zA-Z-0-9]+. 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. 'is_content' : '1' , In 2002 Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. Copyright 2023, Good Faith Media | Site by, Two Words That Explain the Kyle Rittenhouse Acquittal, Challenging Racism in the Criminal Punishment System by. In BFAs early days, it focused its attention A written statement from the foundation says that at the completion of the bankruptcy proceedings and the creation of a new for-profit company, the Baptist Foundation of Arizona will no longer exist. 'hline' : 'American Greed' , succeeded in 1984 by his son, William P. Crotts. The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. Money & Investing. 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 convicted of fraud. At the center of the scandal is Crotts, a charismatic 53-year-old lawyer, who took over the BFA from his father in 1982. 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. It says that a new charity will be established that will be involved in traditional Baptist charitable activities, including, for example, ministries, education, and providing routine trust and estate planning. The new charity, the statement says, will be prohibited from selling debt securities. The U.S. Supreme Court overturned Andersens conviction in 2005, but it is unlikely the nearly defunct company will ever recover as a respected business. if (typeof adunit != "string") return false; or subscribe. PHOENIX (BP)The Enron collapse has reared its head in an Arthur Andersen announcement that the accounting firm is backing out of a $217 million settlement with victims of the Baptist Foundation of Arizonas 1999 collapse. isEEARegionCheck(); let cStart = document.cookie.indexOf(`${name}=`); statements for periods beginning on or after December 15, 2002, and earlier The Baptist Foundation of California. In a short time, it had created a complicated web of dozens of interlocking non-profit and for-profit subsidiaries to operate its real-estate and other investment deals. Other companies to look at: Cendant, RiteAid, and Sunbeam. mps.__intcode = "v2"; One BFA subsidiary, Arizona Southern Baptist New Church Ventures, had a stated purpose of financing new Southern Baptist churches in Arizona. Investors Lost Millions in Church Fraud Executives Sentenced. A BFA liquidation trust was set up to sell off assets to allow investors to recover part of their money. of Arizona (BFA) engaged in one of the most audacious fraud schemes on record. if (!_qs) { have a responsibility to expand their work to obtain independent corroborating 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.

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