}; Arthur Andersen Faces Court Trial Over Baptist Investment Foundation. Watch how the . The BFA had issued millions of dollars in money-losing loans. } cStart = cStart + name.length + 1; relationships, transactions, and balances (SFAS 57. if (document.cookie.length > 0) { } 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. "They had their faith shattered and faced the possible loss of all their retirement investments.". propertys book value, not its diminished current value. 'content_id' : '100000099' , All Rights Reserved. Under William Crotts A Matter of Lost Souls and Savings - culteducation.com Start Here; About Us. } with a questioning mind, recognizing the possibility that fraud may be present, or redistributed. All rights reserved. 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. However, These. window.location.href = `/opt-in-check?pub_referrer=${encodeURIComponent(url)}`; }; } Arizona foundation executive convicted - Baptist Standard Investors who choose to roll their money into securities may be risking even bigger losses. var script = document.createElement("script"); function isEEARegionCheck() { 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. 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. Your investment actually touches the lives of countless numbers while you earn a very attractive interest rate. Former Alcor Employee Makes Harsh Allegations Against Cryonics Foundation While the recently enacted Sarbanes-Oxley Act may only directly impact auditors One pastor who had recently entrusted $1 million in church funds to. the State Board of Accountancy: Arthur Andersen, without admitting or denying any fault, settled an investors DIRECTOR OF OPERATIONS. Case Study Two Part 1 Baptist Foundation.docx - 1 Case In 1948, the Baptist Foundation of Arizona was founded in 1948 and initially sought to provide a financial revenue for participants while supporting Baptist-motivated causes. script.setAttribute("onerror", "setAdblockerCookie(true);"); Arizona Officials Say Andersen Auditors Played Role in Fraud by a Baptist Group. 'path' : '/id/100000099' , In BFA's early days, it focused its attention Novak contended that Andersen and its insurance company are two separate entities, The Republic reported, while Napolitano depicted the two as one and the same and thus Andersen in actuality is reneging on the settlement. 207, or tstolle@bcmd.org. Improving and strengthening fraud detection is at the heart 'cag[template]' : 'special_reports' , 15-Year-Old Allegedly Raped, Then Forced to Confess to Church succeeded in 1984 by his son, William P. Crotts. if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { const url = `${window.location.pathname}${window.location.search}`; el.parentNode.insertBefore(s, el); 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. was placed on probation, requiring that his work be monitored for two years They were acquitted of 23 counts of theft. Kyle Cooper. 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. This material may not be published, broadcast, rewritten, 1 (803) 227-6197 kcooper@mybfsc.org. Baptist Foundation | Baptist Convention of Maryland/Delaware - BCM/D The Arizona Republic reported that Novak had said Andersens circumstances have changed significantly since it was indicted March 14 on federal charges involving its auditing of Houston-based energy trader Enron. Massive Southern Baptist Abuse Scandal - The American Conservative April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. mpsload.id = "mps-load"; and New Church Ventures $173.6 million. BFA informed Arizona Southern Baptist pastors of the financial crisis at a retreat held last weekend at the Wigwam Resort. Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. (Phoenix, Ariz. - September 5, 2006) Lawrence Dwain Hoover today pleaded guilty to one count of fraud in the criminal case involving the Baptist Foundation of Arizona (BFA). With what are they going to make donations?. return _regex.test(_qs); const matches = oneTrustCookie.match(COOKIE_REGEX); Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. Quotes displayed in real-time or delayed by at least 15 minutes. } or subscribe. too heavily upon management assurances. The previously announced cash out plan is shelved after talking to more than 4,000 investors. 'is_sponsored' : '0' , Several accountants and one attorney became concerned enough to approach senior management about ALOs deficit. } manager on the BFA audit lost their CPA licenses to practice and a third CPA baptist foundation of arizona scandalshaun thompson elmhurst Consultation Request a Free Consultation Now. 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. This caused a lot of people, more than 11,000 investors, to lose their life savings ($550 million). July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. Reflection and resources at the intersection of faith and culture through an inclusive Christian lens. Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. Founded in 1948 to raise money for Southern Baptist causes, BFA and its subsidiaries and affiliates had marketed securities throughout the United States as retirement vehicles for investors and served as a custodian for tax-deferred Individual Retirement Accounts. Baptist Foundation of Arizona - By watching and reviewing 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. Andersen reneges on $217M settlement with Ariz. Baptist foundation Auditors must broaden the range of information that Then, BFA sold property BFA invested heavily in real estate, a more speculative investment strategy than other Baptist foundations in the state traditionally used. This settlement takes on a sad historical significance } 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. Baptist Foundation indictments thrown out. Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. //begin OneTrust Redirect The New Independent Fundamental Baptist Movement (New IFB) was spearheaded in part by Steven Anderson, another well-known anti-LGBTQ pastor. June 2, 2010, 9:03 AM. 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. Donald Dale Deardorff, Senior Vice President and Controller, was sentenced to four years in prison and a fine of $150 million (equivalent to $196 million in 2021). MLA Baptist Foundation of Arizona Scandal.docx - Surname 1 Site by Mere. The entities had no employees of their In his resignation letter, Tresch told BFA officials they have placed themselves in a position of civil and criminal liability. Market data provided by Factset. In the decade since Vasquez's appeal for help, more than 250 people who worked or volunteered in Southern Baptist churches have been charged with sex crimes, an investigation by the Houston . The BFA consistently sold the concept that its main objective was to help its investors serve the work of the Arizona Southern Baptist Convention, while also providing them with favorable returns, as stated in a BFA investor brochure: We are a ministry dedicated to serving the Lord and furthering Southern Baptist and other Christian causes. Over a period of several years, the management of the Baptist Foundation Accusations of New IFB being a cult were also made by former New IFB preacher Adam Fannin, who left after the Romero scandal in January 2019. [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. Essentially, in a transaction that favored a former director, the BFA accepted a piece of property (which the BFA itself declined to purchase) as collateral for a loan that amounted to US$4.9M more than the property's appraisal value. mps._adsheld.push(adunit) Ponzi scheme. by the Arizona State Board of Accountancy. Clearly no. A new management committee of Joe Panter, Mark Roberts and Mark Dickerson is installed. 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. Sept. 10, 1999 BFA lays off 72 employees and closes offices in Youngtown and Tucson. about the Baptist Foundation of Arizona. Robert H. Colson, PhD, CPA Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. the auditors would have discovered that ALO was insolvent. 2023 FOX News Network, LLC. "Fraudulent Practices" | News | Phoenix | Phoenix New Times | The Payments were being made on the 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. Oct. 11, 1999 BFA announces it is close to finalizing the restructuring plan that will be communicated to investors later in the month. Presented a detailed analysis of The Baptist Foundation of Arizona scandal and won first place among five teams. var _qs = window.location.href; Defense lawyers said they plan to ask Judge Kenneth Fields to dismiss the charges, and plan to appeal if he doesn't. 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. "host" : 'mps.cnbc.com', 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. if (isOneTrustAnyBlocked()) { Baptist Foundation of Arizona, BFA | Academic Essay The following were among the major GAAP violations alleged by Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. 'title' : 'American Greed: Religious Prey: Baptist Foundation of Arizona | Medical Scams' , Kimsey reportedly invested $100,000 with BFA. [15] At the time, this settlement was the second largest settlement in the nation's history for a Big Five accounting firm that was not related to the Savings and Loan collapses of 1986 to 1995. 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. '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; 'stitle' : 'Religious Prey | Dr. Mikos: American Greed 5' , Crotts and Grabinski could face six to 23 years for each count. 'cag[type_cnbcteam]' : 'CNBC US Team' , mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; By 1996, ALO was more than $100 million in debt. The first time he attested to the value, he indicated that the property was worth $3.3 million. Victims of Baptist Foundation scheme still recovering | News 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. console.log('PUB-GDPR-CHECK all blocked. A grand jury in April 2001 returned indictments charging former BFA officials with 32 counts of fraud, theft and racketeering. } else { })(); var mps = mps || {}; Arizona Baptist Foundation victims still recovering | Cronkite News In 1962, Pastor Glen Crotts became the organization's first president. mps._queue.refreshads = mps._queue.refreshads || []; PC Phone Home How did such a massive fraud develop? network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net. of fraud and even more critical to engage in effective audit procedures to Transactions July 14, 1999 Arizona Corporation Commission accuses Baptist Foundation of Arizona, Arizona Southern Baptist New Church Ventures, Inc. and Christian Financial Partners, Inc. of violating Arizona Securities Act. const COOKIE_REGEX = /groups=([^&]*)/; An unambiguous lesson from the BFA case is that the audit team cannot rely The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. But it also "loaned" nearly $140 million to companies owned by three of the Foundation's directors. ', window.location); Baptist Foundation of Arizona Beecher-Tilton scandal case Branch Davidians C Claudy bombing F Foreign Office papal visit memo G Greater Grace World Outreach Greater Ministries International H Hyles-Anderson College I 2015 Iglesia ni Cristo leadership controversy K Keldholme Priory election dispute David Koresh L Lonnie Latham Larry Lea d.setTime(d.getTime() + 60 * 60 * 24 * 30 * 1000); than $20 million per year for several years. 10 Major Accounting Scandals That Caught the Public's Eye: What Do They their life savings. SAS 99 Reglious Prey: Baptist Foundation of Arizona - CNBC 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. People of faith vulnerable to 'affinity frauds,' authorities say. Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. Scandal - Fall from grace: the Baptist Foundation collapse A look back at the Arizona Baptist Foundation struggle 'type' : 'mobile: episode' , evidence. [11], In early 2007, several former members of the BFA's executive management team were sentenced for the fraudulent activities associated with the BFA. Legal Statement. typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); recently issued SAS 99, Consideration of Fraud in a Financial Statement } .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) Baptist Foundation Officials Found Guilty of Fraud The BFA now owes investors $200 million more than it did in 1995. "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. June 3, 2010 -- Tina Anderson was only 15 when she said she was forced to stand terrified before her entire Baptist congregation to confess her . mps._queue.adview = mps._queue.adview || []; 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 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. if (!matches) { 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. BFA management was highly motivated not to show any losses and to report only mps.insertAd("#" + slotid, adunit) Thus, when people tried to sell it they could not because they did not own anything. than ever for auditors to employ sound fraud-detection audit procedures in Under his leadership, the organization held strict moral values, including its officers being forbidden to gamble or drink alcohol. if (typeof mps.getAd != "function") mps.getAd = function(adunit) { Convention required BFA to be a profitable, self-sustaining independent entity. He is pastor of Faithful Word Baptist Church, an anti-LGBTQ hate group in Tempe, Arizona. 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. Could Enron have been prevented? - International Due Diligence Organization The Enron scandal has entered the BFA picture, according to Andersen's Phoenix attorney, Ed Novak. 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 . The CPA Journal. Prosecutors said investors were promised high returns and a safe investment for using their money to build churches and retirement homes, but their combined losses totaled more than a half-billion dollars. Deceptive Accounting - 1331 Words | 123 Help Me helped to further accelerate the demise of a once prestigious and great firm. baptist foundation of arizona scandal - gerstenfield.com Baptist Foundation of Arizona's auditor Arthur Anderson Illegal practices of Baptist Foundation of Arizona Holding company with losses of $585 million Told everyone they were building churches Global Crossing's auditor Arthur Anderson Global Crossing illegal practices Borrowing money and changing the origin Like many The BFA won a religious exemption from both Arizona statutes governing securities and banking laws. Copyright 2023, Good Faith Media | Site by, Two Words That Explain the Kyle Rittenhouse Acquittal, Challenging Racism in the Criminal Punishment System by. Baptist Foundation of Arizona Case Has Similarities With Enron Powered and implemented by FactSet Digital Solutions. 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. If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com. 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 . } var setAdblockerCookie = function(adblocker) { View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. } Baptist Convention. const blockedCategories = decodeURIComponent(matches[1]) BAPTIST FOUNDATION OF ARIZONA The Baptist Foundation of Arizona (BFA), which Andersen served as auditor, lost $570 million of donor funds. Market data provided by Factset. 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). } 2023 Southern Baptist Convention. 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. American Greed: Religious Prey: Baptist Foundation of Arizona - CNBC Romero was a former congregant of Anderson's church before going to start the Fort Worth church with his . mps._queue.gptloaded.push(function() { if (cStart !== -1) { But a jury found them innocent on 23 counts of theft, saying they didn't intend to steal from investors but got in over their heads and tried to cover it up. }, mpsopts = { BFA began to invest heavily in the Arizona real estate market, and at the 'cat' : 'CNBC TV|Primetime Shows 2|American Greed' , var d = new Date(); that ALO had a negative net worth of $116 million and had been losing more 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. In the Midst of Infighting, Anti-LGBTQ Church Network's Website and At the time BFA filed for bankruptcy in November 1999, it had total liabilities of approximately $650 million and listed assets of approximately $290 million. return false; }); Andersens effort to back out of the BFA settlement focuses on its wholly owned Professional Services Insurance Co. in Hamilton, Bermuda. Redirecting. STRICTLY_NECESSARY: 1, Got a confidential news tip? Its an investment scam, yes, Mr. Nelson says, but because it is a religious organization, it only fuels stereotypes about taking advantage of people based on their faith.. const EEA_REGION_COUNTRY_CODES = ['AT', 'BE', 'BG', 'HR', 'CY', 'CZ', 'DK', 'EE', 'FI', 'FR', 'DE', 'GR', 'HU', 'IS', 'IE', 'IT', 'LV', 'LI', 'LT', 'LU', 'MT', 'NL', 'NO', 'PL', 'PT', 'RO', 'SK', 'SI', 'ES', 'SE', 'CH', 'TR', 'GB']; var CNBC_Premium = CNBC_Premium || {}; In 2002 Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. document.addEventListener("DOMContentLoaded", function(event) { 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. 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. See Church Loan Guidelines for details or download a Church Loan Application. Appeals Court Upholds Baptist Foundation Convictions It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. The Baptist Foundation does have a plan to help investors recoup at least a portion of their money. Prosecutors estimated 11,000 investors, most of them elderly, were defrauded in the 1980s and 1990s. 2 ex-Baptist Foundation execs sentenced for fraud - Arizona Daily Star Login Here. [8] Indictments were handed down in April 2001; by July 2006, when BFA's president and CEO William Crotts and BFA's Chief Legal Counsel Thomas Grabinski were found guilty at trial on multiple counts of fraud, five other defendants had already pleaded guilty. if (typeof window === 'undefined') return; On this Wikipedia the language links are at the top of the page across from the article title. First, Robert Tuttle of The Reason Files 2 is reporting the same thing I am hearing from multiple sources.
March 14, 2023