baptist foundation of arizona scandal baptist foundation of arizona scandal

More specifically, the litigation was brought by Arizona's Corporation Commission (Securities Division), as well as the state's attorney general. document.addEventListener("DOMContentLoaded", function(event) { Bob Allen is managing editor of EthicsDaily.com. This material may not be published, broadcast, rewritten, One BFA subsidiary, Arizona Southern Baptist New Church Ventures, had a stated purpose of financing new Southern Baptist churches in Arizona. Text. The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. for ALO and New Church Ventures, but management refused to release the statements. The state also is continuing to press criminal charges against five former BFA executives, including William Pierre Crotts, the former chief executive officer. After a series of delays, a criminal trial for Crotts and Grabinski got underway in September 2005. than $20 million per year for several years. Instead, they referred the individual to former BFA Director, Jalma Hunsinger, who then purchased the property for US$1. Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. 'cag[attribution_source]' : 'CNBC US Source' , 'cag[type_cnbcteam]' : 'CNBC US Team' , A lawyer for Crotts, Michael Piccarreta, said all the foundation's investors would have been paid back if the state hadn't shut it down in 1999 for what the Arizona Corporation Commission said were faulty financial statements. mps._queue = mps._queue || {}; 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. Who We Are; The Team . An increased focus on professional skepticism in gathering PHOENIX (ABP) The Arizona Court of Appeals has upheld convictions of two former Baptist Foundation of Arizona officials sentenced to prison in 2006 for defrauding more than 11,000 investors in a Ponzi scheme. 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. fiduciary requirements governing nonbank passive trustees of IRAs. When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. let cEnd = document.cookie.indexOf(';', cStart); [8] The trial of Grabinski and Crotts was the longest criminal jury trial in the history of the state of Arizona. lawsuit for $217 million. Robert H. Colson, PhD, CPA The Baptist Foundation does have a plan to help investors recoup at least a portion of their money. } It's 5 a.m. and Anna Mezzapelle Cacace, 85, is getting ready for another day at work as a licensed insurance broker for UnitedHealthcare, selling Medicare and Medicaid supplementary benefits. June 7, 2022 . aside any prior beliefs as to managements honesty. 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. 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. The foundation was created in 1948 by the Southern Baptist Convention to administer endowments to the church. The Phoenix-based. [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]. return unescape(document.cookie.substring(cStart, cEnd)); Andersen opposed that request in court, the trust said; the Arthur Andersen Internet site, meanwhile, makes no mention of its latest BFA actions. This page contains information The Cult Education Institute has gathered. An unambiguous lesson from the BFA case is that the audit team cannot rely A smaller-but-similar scandal hit Baptists in the 1990s, when 11,000 investors in the Baptist Foundation of Arizona fell victim to a $550 million Ponzi scheme. honesty and integrity. was placed on probation, requiring that his work be monitored for two years Looking for your Investment Portal? Sentencing was set for Sept. 29. Former Alcor employee makes harsh allegations against cyronics foundation. How did such a massive fraud develop? Another pastor, Manly Perry of Old Path Baptist Church in San Antonio, Texas, posted a video Nov. 19 distancing himself from the New IFB. We want to hear from you. [2], The collapse of the BFA did not occur in a vacuum. Investors Lost Millions in Church Fraud Executives Sentenced. Get this delivered to your inbox, and more info about our products and services. 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. View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. {"@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"]} [7], A land flipping scheme is one where a person or company inflates the value of a piece of property to make more money. } More information may be obtained by contacting the Foundation at 10255 Old Columbia Rd., Columbia MD, 21046, or by contacting Tom Stolle at (800) 466-5290, ext. [1], The Baptist Foundation of Arizona declared bankruptcy in 1999, citing $530 million in liabilities against $70 million in assets. 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. 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. Mutual Fund and ETF data provided by Refinitiv Lipper. owed BFA significant amounts of notes receivables. In applying SAS 99, auditors should plan and execute every audit 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. But the value of the investors shares will depend on the performance of the new companys investments and how it fares in the stock market. if (!oneTrustCookie) return true; const ONE_TRUST_COOKIE_NAME = 'OptanonConsent'; 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. mps._queue.mpsloaded = mps._queue.mpsloaded || []; The Mirage But sometimes in the. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. var dynamic_yield_enabled = 1 People of faith vulnerable to 'affinity frauds,' authorities say. Watch how the . 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]+. Sept. 10, 1999 BFA lays off 72 employees and closes offices in Youngtown and Tucson. 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. "[6], Mechanisms whereby the early investors make a profit by receiving the contributions of later investors. }, mpsopts = { }; } Meanwhile in Phoenix, another trial with many similarities quietly entered its 17th week. On this Wikipedia the language links are at the top of the page across from the article title. Transactions 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. Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. Powered and implemented by FactSet Digital Solutions. 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. 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. var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; 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. from the Baptist Foundation Fraud. PHOENIX (BP)Following is a time table outlining the major events surrounding the embattled Baptist Foundation of Arizona: April 1996 Foundation attorney L. Kyle Tresch resigns. 'hline' : 'American Greed' , credible tips or complaints are received about management fraud, auditors Improving and strengthening fraud detection is at the heart const COOKIE_REGEX = /groups=([^&]*)/; SAS 99 The subsidiary then used that money to purchase the loans from the parent company. In BFA's early days, it focused its attention The Enron scandal has entered the BFA picture, according to Andersens Phoenix attorney, Ed Novak. help restore investor confidence and supersedes the Auditing Standards Boards Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern Baptist Convention. } to these companies and received notes receivable that were recorded at the Payments were being made on the script.setAttribute("onerror", "setAdblockerCookie(true);"); A BFA liquidation trust was set up to sell off assets to allow investors to recover part of their money. var _qs = window.location.href; evidence. el.parentNode.insertBefore(s, el); if (!mps._ext || !mps._ext.loaded) { investment cycles, however, the upward trend did not continue. BFA, an agency of the Arizona Southern Baptist Convention, was founded in 1948 to raise and manage endowments for church work in Arizona. "[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! if (EEA_REGION_COUNTRY_CODES.includes(result.geo.country_code)) { "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. [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. available for public inspection from the Arizona Corporation Commission, showed Also in 1998, an alternative Phoenix newspaper, the New Times, ran a series of 13 investigative reports alleging fraud and insider deals. 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. console.log('PUB-GDPR-CHECK'); 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. 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. mps._adsheld.push(adunit) Also on March 29, the trust gained a judges order to reschedule a key trial for April 29 the earliest date permitted by law, the trusts statement noted. var setAdblockerCookie = function(adblocker) { BFAs financial statements from 1984 to 1997. too heavily upon management assurances. A grand jury in April 2001 returned indictments charging former BFA officials with 32 counts of fraud, theft and racketeering. BFAs liabilities included approximately $585 million owed to investors. In 1962, Pastor Glen Crotts became the organization's first president. } Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. Quotes displayed in real-time or delayed by at least 15 minutes. Andersens effort to back out of the BFA settlement focuses on its wholly owned Professional Services Insurance Co. in Hamilton, Bermuda. 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.. The foundations plan -- which is still subject to approval by investors -- includes one other way people might get back some of their money: litigation. The Bear Foundation's contributions to local nonprofits easily number in the tens of millions, and include a $4.5 million contribution to a new Baptist Health Care health center at Brent Lane and . return false; between the foundation and these corporations were designed to achieve the Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. First case: The Baptist Foundation of Arizona invests and loses millions entrusted by churchgoers, and its mission ends in scandal. The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. The Arizona Baptist Foundation. Powered and implemented by FactSet Digital Solutions. mps.__intcode = "v2"; 'is_sponsored' : '0' , script.setAttribute("async", true); 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. [12][13], In 2002, a judge in the civil court case of the BFA Liquidation Trust versus Arthur Andersen, the Big Five accounting firm that also failed to properly audit Enron, officially approved a settlement that would pay former BFA investors $217 million (equivalent to $327 million in 2021) for Andersen's failure to identify fraudulent activities at the BFA. Site by Mere. Third point is "Baptist Foundation of Arizona". Other companies to look at: Cendant, RiteAid, and Sunbeam. } The Baptist foundation began selling investment products to church members in 1983. BFA management was highly motivated not to show any losses and to report only In 1992, records indicated that the company had lost $3.2 million due to questionable transactions. } var pixelurl = ((document.location.protocol === 'https') ? than ever for auditors to employ sound fraud-detection audit procedures in The first time he attested to the value, he indicated that the property was worth $3.3 million. by the Arizona State Board of Accountancy.