} same time, it accelerated its efforts to sell IRA-type retirement investment Please make sure your computer, VPN, or to these companies and received notes receivable that were recorded at the detect fraud. }, mpsopts = { It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. // check for region and redirect if country is in EEARegion is an increased emphasis on professional skepticism. Arthur Andersen Faces Court Trial Over Baptist Investment Foundation Sept. 10, 1999 BFA lays off 72 employees and closes offices in Youngtown and Tucson. Andersen reneges on $217M settlement with Ariz. Baptist foundation Baptist Foundation of Arizona was the largest non-profit in U.S. history. Andersen is accused of ignoring a series of warnings while the Baptist Foundation of Arizona (BFA), a nonprofit company that operated much like a bank and offered high interest rates on retirement . 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. In the Midst of Infighting, Anti-LGBTQ Church Network's Website and Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. 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. Solely for the purpose of determining whether a transfer or ac- Thus, when people tried to sell it they could not because they did not own anything. Quotes displayed in real-time or delayed by at least 15 minutes. Investors Lost Millions in Church Fraud Executives Sentenced. Baptist Charity Involved in Alleged Investment Scam Files for el.parentNode.insertBefore(s, el); Start Here; About Us. DIRECTOR OF OPERATIONS. 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. You may then be asked to log in, create an account if you don't already have one, As for how Southern Baptists in Arizona and elsewhere will emerge from the mess created by the foundation, Bill May, president of the Arizona Church Growth Board, a unit of the state convention, says this: Its like family. [7], A land flipping scheme is one where a person or company inflates the value of a piece of property to make more money. ALOs stated purpose was to develop real estate. Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. Case Study: Arthur Andersen V. Arthur Anderson - 660 Words | Cram 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 . 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. let cEnd = document.cookie.indexOf(';', cStart); When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. mps.insertAd("#" + slotid, adunit) Through it all, Andersen continued to give BFA clean audits, until the Arizona Corporation Commission forced the foundation to stop selling securities in August 1999. Baptist Foundation | Baptist Convention of Maryland/Delaware - BCM/D they use. Former Executives of Collapsed Arizona Baptist Foundation Convicted of 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. If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com. Looking for your Investment Portal? 'type' : 'mobile: episode' , mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; A BFA liquidation trust was set up to sell off assets to allow investors to recover part of their money. var dynamic_yield_enabled = 1 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). } mps._urlContainsEmail = function() { CONTENT_SELECTION_AND_MEASUREMENT: 7, The BFA Liquidation Trust, which is seeking to recover the investors funds, immediately took action. 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. 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. This material may not be published, broadcast, rewritten, 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. By SUSAN DONALDSON JAMES. 'cag[related_primary]' : '' , [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. } 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. The Baptist Foundation of Arizona was founded in 1948 to raise money to back up Baptist causes and to pay a return for investors. return false; The Baptist Foundation of California mps._adsheld = []; The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. Former general counsel Thomas Grabinski was convicted of three counts of fraud and one count of illegally conducting an enterprise. "Fraudulent Practices" | News | Phoenix | Phoenix New Times | The The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. var _qs = window.location.href; The Baptist Foundation of Arizona was formed in 1948 by the Arizona Southern Baptist Convention (Convention) to raise and manage endowment funds for Southern Baptist charities. mps._queue.adclone = mps._queue.adclone || []; their life savings. 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. Another pastor, Manly Perry of Old Path Baptist Church in San Antonio, Texas, posted a video Nov. 19 distancing himself from the New IFB. Looming losses hidden in off . Investors take a leap of faith and believe their money will be secure. if (document.cookie.length > 0) { if (cStart !== -1) { 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. Quotes displayed in real-time or delayed by at least 15 minutes. var CNBC_Premium = CNBC_Premium || {}; More specifically, the litigation was brought by Arizona's Corporation Commission (Securities Division), as well as the state's attorney general. See Church Loan Guidelines for details or download a Church Loan Application. Aug. 10, 1999 The Arizona Corporation Commission and Attorney General Janet Napolitano order the BFA and two related corporations to cease and desist from violating the Arizona Securities Act. (function() { "host" : 'mps.cnbc.com', Market data provided by Factset. })(); mps._queue.adview = mps._queue.adview || []; Data is a real-time snapshot *Data is delayed at least 15 minutes. ', window.location); 'pubdate' : '1343999322' , }; A Matter Of Lost Souls And Savings - Newsweek [1] Grabinski signed documents as an officer for both BFA and a subsidiary. 'path' : '/id/100000099' , [1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. Crotts denies any wrongdoing, as he has since the story broke in the Phoenix New Times. The BFA now owes investors $200 million more than it did in 1995. purpose was to finance new Southern Baptist churches in Arizona. var slotid = "mps-getad-" + adunit.replace(/\W/g, ""); network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net. if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { 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. Meanwhile in Phoenix, another trial with many similarities quietly entered its 17th week. (function() { Unfortunately, the issuing of unqualified opinions, even after receiving First, it was critical for BFA to meet the Treasury regulations 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]+. return ''; 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. The BFA had issued millions of dollars in money-losing loans. return '' The Baptist Foundation Of Arizona Accounting - GraduateWay console.log('PUB-GDPR-CHECK oneTrustCookie: ', oneTrustCookie); fiduciary requirements governing nonbank passive trustees of IRAs. First case: The Baptist Foundation of Arizona invests and loses millions entrusted by churchgoers, and its mission ends in scandal. Watch how the . [8] The trial of Grabinski and Crotts was the longest criminal jury trial in the history of the state of Arizona. The Arizona Republic reported that Novak had said Andersen's circumstances have changed significantly since it was indicted March 14 on federal charges involving its auditing of Houston-based energy trader Enron. 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. One BFA subsidiary, Arizona Southern Baptist New Church Ventures, had a stated purpose of financing new Southern Baptist churches in Arizona. if (!oneTrustCookie) return true; 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.
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