'cag[type_creator]' : 'Stacy Keach' , Powered and implemented by FactSet Digital Solutions. 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. credible tips or complaints are received about management fraud, auditors Editor: help restore investor confidence and supersedes the Auditing Standards Boards The Arizona Southern Baptist Convention was founded in 1928. aside any prior beliefs as to managements honesty. The Baptist 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 suits against Andersen alleged that the foundation had become a Ponzi scheme, needing to raise tens of millions of dollars to pay the high returns it had promised to earlier investors., The Journal noted that, according to the lawsuits, a key reason why the scheme lasted as long as it did was that Andersen continued to certify the foundations financial statements and dismissed multiple warnings by individuals that the foundation was defrauding investors. 30. One pastor who had recently entrusted $1 million in church funds to. Hundreds Accuse Independent Baptist Pastors of Abuse - News & Reporting investment cycles, however, the upward trend did not continue. View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. 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. is an increased emphasis on professional skepticism. Former Alcor Employee Makes Harsh Allegations Against Cryonics Foundation } The Baptist Enron | WORLD Legal Statement. } if (typeof adunit != "string") return false; Under Bill Crotts, the organization diverted over $140 million to two former and one active (as of 1998) director. 'https' : 'http') + '://pix.nbcuni.com/a-pii.gif?X=piiblock&S=' + mps.pagevars.instance + '&P=' + mps.pagevars.mpsid + '&A=' + i + '&U=' + encodeURIComponent(window.location.href) + '&_=' + window._mpspixZ; His lawyer has said there was no fraud but rather a disagreement on the value of property. Robert H. Colson, PhD, CPA Arthur Andersen and the Baptist Foundation April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. 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. Among Southern Baptists in Arizona and the neighboring states, where many of the investors live, the impact of the case may be more direct. Prosecutors estimated 11,000 investors, most of them elderly, were defrauded in the 1980s and 1990s. .map(categoryPreference => parseInt(categoryPreference.split(':')[0], 10)); The Arizona Baptist Foundation. } Arthur Anderson had the same problems with the Baptist Foundation of Arizona several years earlier when 750 million in assets was more like 125 million in assets because most of the assets booked by the Baptist Foundation were found to be substantially overvalued. Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. Then, BFA sold property Another pastor, Manly Perry of Old Path Baptist Church in San Antonio, Texas, posted a video Nov. 19 distancing himself from the New IFB. A Matter Of Lost Souls And Savings - Newsweek var foresee_enabled = 1 succeeded in 1984 by his son, William P. Crotts. A look back at the Arizona Baptist Foundation struggle The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. Its bankruptcy late in 2001 caused about 4,000 employees to lose their jobs, while stock losses wiped out their retirement savings and prompted many business reforms. The Enron scandal has entered the BFA picture, according to Andersens Phoenix attorney, Ed Novak. 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Baptist Foundation of Arizona - By watching and reviewing 2019. - Washington console.log('PUB-GDPR-CHECK'); var CNBC_Premium = CNBC_Premium || {}; Lewis Bear Jr., one of Pensacola's biggest philanthropists and let cEnd = document.cookie.indexOf(';', cStart); 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. 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. 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. mps._queue.mpsloaded.push(function(){ Scandal - Fall from grace: the Baptist Foundation collapse script.setAttribute("onload", "setAdblockerCookie(false);"); baptist foundation of arizona scandal - gerstenfield.com Massive Southern Baptist Abuse Scandal - The American Conservative var d = new Date(); Contact (909) 738-4000 info@bfcal.org. typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); 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. }); Andersen reneges on $217M settlement with Ariz. Baptist foundation The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. Tuesday, September 5, 2006. For example, Select Trading Group, a subsidiary of ALO, created its own subsidiary, Santa Fe Trails Ranch II. Mutual Fund and ETF data provided by Refinitiv Lipper. 2 ex-Baptist Foundation execs sentenced for fraud - Arizona Daily Star We look forward to serving you! The Baptist Foundation of Arizona was founded in 1948 to raise money to back up Baptist causes and to pay a return for investors. By MICHAEL SCHROEDER Staff Reporter of THE WALL STREET JOURNAL. Art Toalston is a writer based in Nashville and a former editor of Baptist Press. The foundations bankruptcy marks one of the biggest financial collapses ever by a charity. if (mps._urlContainsEmail()) { Reglious Prey: Baptist Foundation of Arizona - CNBC 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. var setAdblockerCookie = function(adblocker) { 207, or tstolle@bcmd.org. 6. Arthur Andersen Presentation Flashcards | Quizlet real estate in exchange for notes receivable valued in the millions of dollars. The BFA's leaders, including a respected pastor and his adult son, used everything from Ponzi schemes to "land flipping" in order to squeeze money out of the community. 2023 FOX News Network, LLC. A few days later, the Kimseys' money had all but vanished. Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. Investors who choose to roll their money into securities may be risking even bigger losses. "updatecorrelator" : true Sentencing was set for Sept. 29. } if (typeof window === 'undefined') return; Baptist Foundation of Arizona $600 Million fraud - YouTube function isOneTrustAnyBlocked() { } Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. } People of faith vulnerable to 'affinity frauds,' authorities say. Sign up for free newsletters and get more CNBC delivered to your inbox. lawsuit for $217 million. the auditors would have discovered that ALO was insolvent. financial assistance was not expected to come from any other source. bounce back, but by the mid-1990s the only phenomenon that kept BFAs Baptist Foundation execs found guilty of fraud - East Valley Tribune than $20 million per year for several years. Potential financial losses in the case overshadow the losses accumulated by non-profit groups and donors who gave money to the Foundation for New Era Philanthropy. Information received from independent sources The Foundation Speaks | News | Phoenix | Phoenix New Times | The About 11,000 investorsmany of them elderly members of Baptist churches in Arizona and elsewherelost more than $550 million. 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. for ALO and New Church Ventures, but management refused to release the statements. //begin OneTrust Redirect for (var i in mps.response.dart.adunits) { 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. 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. Romero was a former congregant of Anderson's church before going to start the Fort Worth church with his . Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. 15-Year-Old Allegedly Raped, Then Forced to Confess to Church The news release said the attorney general also will: seek the sequestering of insurance proceeds and other Andersen assets to insure money is available for BFA victims., seek an expedited trial in the BFA lawsuit and a declaration by the BFA of Andersens actions as having been in bad faith., send a letter to victims outlining the legal steps the state will take., seek the revocation of the licenses of the Certified Public Accountants involved in the BFA at Andersen.. (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. 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")}. Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. Kimsey reportedly invested $100,000 with BFA. The most likely cause of this is a content blocker on your computer or network. Accounting Scandals Flashcards | Quizlet By 1996, ALO was more than $100 million in debt. }; renewed efforts to prevent such accounting failings in the future. By 1997, ALO had a negative net worth of $138.9 and owed BFA $70.3 million Oklahoma Baptist foundation loses money in Madoff scandal .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) from the Baptist Foundation Fraud. It was eventually revealed that it had over $500 million in liabilities. A former BFA director BAPTIST FOUNDATION OF ARIZONA The Baptist Foundation of Arizona (BFA), which Andersen served as auditor, lost $570 million of donor funds. A total of $40-million is available to those who choose to cash out. cStart = cStart + name.length + 1; 'is_sponsored' : '0' , mps._queue.gptloaded.push(function() { 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. Lessons from the Baptist Foundation Fraud - The CPA Journal [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. mps._log('**** LOADED: Google PII Fix - cnbc-cms-header-insert'); Since August, the foundation has fired its top three officials, severed ties with the law and accounting firms with which it had worked, laid off 72 of its 127 employees, and closed its two branch offices. When the BFA filed for bankruptcy in 1999, it had $530 million in liabilities as compared to a reported $70 million in assets. of fraud and even more critical to engage in effective audit procedures to The Baptist Foundation of Arizona -- a non-profit fundraiser dedicated to the church. 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.