owed BFA significant amounts of notes receivables. 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. Victims of Baptist Foundation scheme still recovering | News 'cag[project_management_team]' : 'CNBC US Team' , if (typeof(window._mpspixZ) != 'string') { In other words, it had become a classic [14] The court signing off on the settlement meant that the BFA Liquidation Trust had standing should Andersen which was at the time being charged for issues surrounding Enron be unable to make that payment. The auditors were Arthur Andersen, the same firm that audited Enron. Market data provided by Factset. Baptist Foundation of Arizona - Wikipedia Jalma Hunsinger, President and Director of Church Ventures (a company whose stated purpose was to build churches), paid $150,000 (equivalent to $196,000 in 2021). The audit team requested the financial statements let cStart = document.cookie.indexOf(`${name}=`); TARGETED_ADS: 4, The person did not actually purchase the property, but purchased the right to occupy said property. 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.. real estate in exchange for notes receivable valued in the millions of dollars. accounting treatment desired by management. Legal Statement. for Southern Baptist causes. 'cag[type_source]' : 'CNBC US Source' , . View Jasmine's full profile See who you know in common Get introduced . 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. [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. ', window.location); Category:Religious scandals - Wikipedia 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. head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); console.log('PUB-GDPR-CHECK Blocked Categories: ', blockedCategories); Like many Here we see that Andersen chose to victimize BFAs victims yet again.. [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. investment cycles, however, the upward trend did not continue. About 11,000 investorsmany of them elderly members of Baptist churches in Arizona and elsewherelost more than $550 million. Other companies to look at: Cendant, RiteAid, and Sunbeam. Redirecting. The Baptist Foundation of California. April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. 'cag[device]' : 'mobile-touch' , from the Baptist Foundation Fraud. The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. lawsuit for $217 million. that ALO had a negative net worth of $116 million and had been losing more const url = `${window.location.pathname}${window.location.search}`; 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. Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. of Accountancy alleged that because of the very material departures from GAAP [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. const COOKIE_REGEX = /groups=([^&]*)/; A jury on Monday found former foundation president William Crotts guilty of three counts of fraud and one count of illegally conducting an enterprise, according to the Arizona Attorney General's Office, which prosecuted the case. between the foundation and these corporations were designed to achieve the var dynamic_yield_enabled = 1 return unescape(document.cookie.substring(cStart, cEnd)); New Era, which solicited investments largely from Christian institutions, folded in 1995 after taking in about $350-million in what had amounted to a Ponzi scheme. Appeals Court Upholds Baptist Foundation Convictions mps._ext = mps._ext || {}; Second, Once javascript and access to those URLs are allowed, please refresh this page. Profits from investments were supposed to be used to fund the churches' ministries and numerous charitable causes. mps._queue.adview = mps._queue.adview || []; } Lewis Bear Jr., one of Pensacola's biggest philanthropists and 1 (803) 227-6197 kcooper@mybfsc.org. 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. Investors who choose to roll their money into securities may be risking even bigger losses. Information received from independent sources "American Greed" Religious Prey: Baptist Foundation of Arizona - IMDb mps._adsheld.push(adunit) baptist foundation of arizona scandal. Got a confidential news tip? Inadequate disclosure of losses on notes receivables due Notorious Anti-LGBT Pastor Steven Anderson Permanently Banned from Youtube Surname 1 Student's Name Professor's Name Course Date Financial Fraud Question I The litigation Two of the most significant entities set up to hide BFAs nonperforming The following were among the major GAAP violations alleged by 2023 Southern Baptist Convention. Your investment actually touches the lives of countless numbers while you earn a very attractive interest rate. 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. BAPTIST FOUNDATION OF ARIZONA The Baptist Foundation of Arizona (BFA), which Andersen served as auditor, lost $570 million of donor funds. 2023 Southern Baptist Convention. Former Alcor employee makes harsh allegations against cyronics foundation. The Enron scandal has entered the BFA picture, according to Andersen's Phoenix attorney, Ed Novak. assets were receivables from the insolvent ALO. mps._queue = mps._queue || {}; Superior Ct. Maricopa County, CV 2002-005117. Contact (909) 738-4000 info@bfcal.org. Hundreds Accuse Independent Baptist Pastors of Abuse - News & Reporting the Arizona Corporation Commission as required by state law. var CNBC_MPS_FRANCHISE_TAG='american_greed'; [5], The BFA sold certificates of deposit that were non-refundable during the life of the CD. } 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. PHOENIX -- In 1999, Richard Kimsey and his wife, Susan, deposited $100,000 with a Phoenix-based Southern Baptist agency that promised to do the Lord's work. Along with companies like Enron and Worldcom, it was audited by accounting firm Arthur Andersen, giving investors a false sense of security. 'title' : 'American Greed: Religious Prey: Baptist Foundation of Arizona | Medical Scams' , The real estate market did One pastor who had recently entrusted $1 million in church funds to. An increased focus on professional skepticism in gathering with a questioning mind, recognizing the possibility that fraud may be present, Sign up for free newsletters and get more CNBC delivered to your inbox. function getOneTrustCookie() { aside any prior beliefs as to managements honesty. Aug. 11, 1999 The Arizona Republic reports the foundations funds have been frozen as a result of the investigation. their life savings. ALOs stated purpose was to develop real estate. return false; It filed for bankruptcy in 1999 after many of the foundation 's executive had been convicted of condemnable charges or indicted for fraud. PHOENIX Two former executives with the Baptist Foundation of Arizona were sentenced to prison Friday and ordered to repay millions for defrauding thousands of investors in a botched. [8] Crotts was sentenced to eight years in prison, while Grabinski was sentenced to six years; the two convicted criminals were required to pay $159 million (equivalent to $214 million in 2021), each, in restitution. evidence. This settlement takes on a sad historical significance The fund is $590 million in debt, far outstripping the $158 million Jim and Tammy Bakker bankruptcy scandal--and regulators believe it is among the nation's largest cases of "affinity fraud,". Baptist Foundation of Arizona - How is Baptist Foundation of Arizona if (!mps._ext || !mps._ext.loaded) { was used to pay interest on old money. } The Baptist Yet, in 2002, years after the BFA . a sobering reminder to auditors that it is important to understand the causes if (!_qs) { By 1997, ALO had a negative net worth of $138.9 and owed BFA $70.3 million [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]. network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net. 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.