mps.__timer = Date.now ? July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. of the accounting professions new antifraud initiatives, such as the 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. const oneTrustCookie = getOneTrustCookie(); Reglious Prey: Baptist Foundation of Arizona. The foundation's bankruptcy marks one of the biggest financial collapses ever by a charity. 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. [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. If the audit team had obtained copies of ALOs detailed financial statements, 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. mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; The BFA was associated with the Arizona Southern Baptist Convention, which was affiliated with the national organization. At the time of its failure in 1999, it was the largest affinity fraud that had ever occurred in the United States, with a total loss estimated at US$550 million (equivalent to $895 million in 2021). Another pastor, Manly Perry of Old Path Baptist Church in San Antonio, Texas, posted a video Nov. 19 distancing himself from the New IFB. Yet, in 2002, years after the BFA . 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. The Baptist Foundation of Arizona filed for bankruptcy in federal court last week, owing nearly $600-million to 13,000 people who had bought securities from the organization. 'cag[project_management_team]' : 'CNBC US Team' , The Baptist Foundation of Arizona -- a non-profit fundraiser dedicated to the church. } . earlier fraud standard, SAS 82. We are unable to fully display the content of this page. Legal Statement. Aug. 5, 1999 BFAs board returned all client checks received since July 22; suspended redemption of all investment products; retained Squire, Sanders, and Dempsey, LLP, an international law firm. 3210 E. Guasti Road Ontario, 91761 View on map. In BFAs early days, it focused its attention return _regex.test(_qs); The new company will, like its not-for-profit predecessor, invest its assets in real estate, venture-capital deals, and some equities. Legal Statement. Investors who agree to receive any money recovered in such litigation must give up their rights to pursue other legal action against the foundation, such as joining the two class-action lawsuits that have already been filed against the foundation and its affiliates. operations from collapsing was a constant influx of new investor money that Baptist Convention. In one year, there was an amazing increase in the But it also "loaned" nearly $140 million to companies owned by three of the Foundation's directors. document.addEventListener("DOMContentLoaded", function(event) { evidence. mpsload.id = "mps-load"; The real estate market did a complex mesh of over 90 insider-controlled entities had been used to help Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. 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. 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). Hunsinger subsequently used the property as collateral to obtain a US$6.8M loan from the BFA. var postLoadFunctions = {}; 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. Andersen settled a class-action lawsuit with BFA investors for $217 million, without admitting any wrongdoing. "[3] Instead the BFA decided to hide its debt and began a series of dubious activities. Prosecutors estimated 11,000 investors, most of them elderly, were defrauded in the 1980s and 1990s. the Arizona Corporation Commission as required by state law. between the foundation and these corporations were designed to achieve the BFA, an agency of the Arizona Southern Baptist Convention, was founded in 1948 to raise and manage endowments for church work in Arizona. script.setAttribute("onload", "setAdblockerCookie(false);"); Audit. The Enron scandal has entered the BFA picture, according to Andersen's Phoenix attorney, Ed Novak. Site by Mere. 'is_sponsored' : '0' , At the center of the scandal is Crotts, a charismatic 53-year-old lawyer, who took over the BFA from his father in 1982. const name = ONE_TRUST_COOKIE_NAME; 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). var d = new Date(); One pastor who had recently entrusted $1 million in church funds to. The majority of New Church Ventures if (cStart !== -1) { He pleaded guilty to six felonies and agreed to testify against other defendants, which include former CEO William Crotts and General Counsel Thomas Grabinksi. Text. a sobering reminder to auditors that it is important to understand the causes More specifically, the litigation was brought by Arizona's Corporation Commission (Securities Division), as well as the state's attorney general. console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches); BFAs liabilities included approximately $585 million owed to investors. Redirecting. 'cag[type_franchise]' : 'American Greed' , 2023 FOX News Network, LLC. 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.. Along with companies like Enron and Worldcom, it was audited by accounting firm Arthur Andersen, giving investors a false sense of security. if (typeof window === 'undefined') return; Baptist Group Execs Sentenced for Fraud. [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. 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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. April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. The subsidiary then used that money to purchase the loans from the parent company. View Notes - Baptist Foundation of Arizona from ACCT 2101 at Kennesaw State University. 'cag[related_primary]' : '' , 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. A BFA liquidation trust was set up to sell off assets to allow investors to recover part of their money. from ALO and New Church Ventures (SFAS 5. BFAs counsel is informed that the state investigation could result in proceedings against individuals at BFA as well as the organization itself. Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern Synopsis The Baptist Foundation of Arizona (BFA) was organized as an Arizona nonprofit organization primarily to help provide financial support for various Southern Baptist causes. View Jasmine's full profile See who you know in common Get introduced . fiduciary requirements governing nonbank passive trustees of IRAs. With what are they going to make donations?. return unescape(document.cookie.substring(cStart, cEnd)); Management responded to the new environment by structuring accounting transactions Looming losses hidden in off . purpose was to finance new Southern Baptist churches in Arizona. Other companies to look at: Cendant, RiteAid, and Sunbeam. "[1] Since he was working for both companies, Grabinski was able to authorize questionable transactions. 'cag[type_cnbcteam]' : 'CNBC US Team' , 'cag[type_source]' : 'CNBC US Source' , 2023 FOX News Network, LLC. Once javascript and access to those URLs are allowed, please refresh this page. var mps = mps || {}; [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. 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. Still it functioned much like a financial institution, raising funds through sale of investment agreements and mortgage-backed notes, which in turned were invested in real estate. This material may not be published, broadcast, rewritten, } else { 2 Case Study Two Part 1: Baptist Foundation Summary and Research The Baptist Foundation of Arizona was caught hiding important information about its financials when it filed for bankruptcy in 1999. The following were some of the key warnings: Cases like the Baptist Foundation, along with other corporate frauds, have 'site' : 'cnbc-mobile' , Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. (function() { 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. if (window.mps) { the firm should have issued either a qualified or an adverse opinion on the function isEEARegionCheck() { }).catch(() => {}); In his resignation letter, Tresch told BFA officials they have placed themselves in a position of civil and criminal liability. const url = `${window.location.pathname}${window.location.search}`; Meanwhile in Phoenix, another trial with many similarities quietly entered its 17th week. } For example, on one day Grabinski attested to the value of a piece of property twice. Kimsey reportedly invested $100,000 with BFA. Napolitano and the Arizona Corporation Commission then filed a civil lawsuit against Andersen in January 2001, seeking civil remedies for violations of the Arizona Securities and Consumer Fraud Act. 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. "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. if (typeof(window._mpspixZ) != 'string') { [1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. [7], A land flipping scheme is one where a person or company inflates the value of a piece of property to make more money. 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. 'pubdate' : '1343999322' , The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. First, it was critical for BFA to meet the Treasury regulations Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. Crotts, one of three remaining defendants pleading innocent, says he was an innocent victim who himself lost $800,000. By watching and reviewing the videos about the Baptist Found of Arizona (BFA), I noticed that Arthur Andersen 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. Also in 1998, an alternative Phoenix newspaper, the New Times, ran a series of 13 investigative reports alleging fraud and insider deals. real estate bubble burst and property values declined substantially. How did such a massive fraud develop? It is expected to last until at least March, with an estimated cost of $1.6 million to Arizona taxpayers. const COOKIE_REGEX = /groups=([^&]*)/; It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. } PC Phone Home var CNBC_MPS_FRANCHISE_TAG='american_greed'; When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. Auditors must broaden the range of information that Both ALO and New Church Ventures Wednesday, June 10, 2009. with a questioning mind, recognizing the possibility that fraud may be present, be taking place requires a higher degree of due diligence by auditors. On this Wikipedia the language links are at the top of the page across from the article title. honesty and integrity. Controversial Arizona pastor Steven Anderson, the firebrand KJV-Onlyist from Faithful word Baptist Church in Tempe, AZ, has been permanently banned from Youtube, having his entire operation shout down from multiple accounts. Reflection and resources at the intersection of faith and culture through an inclusive Christian lens. It eventually grew into an independent nonprofit organization that sold individual retirement accounts and other investments. Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos 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. CNBC_Comscore = 'CNBC_TV'; Tuesday, September 5, 2006. mps._urlContainsEmail = function() { Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. disguise BFAs tenuous financial condition. 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. 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. Baptist Foundation of Arizona Scandal Andersen ignored a CPA's uncovering of fraud and gave clean audit opinions. 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. [2], The collapse of the BFA did not occur in a vacuum. .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) 'stitle' : 'Religious Prey | Dr. Mikos: American Greed 5' ,