return ''; lawsuit for $217 million. return _regex.test(_qs); const ONE_TRUST_COOKIE_NAME = 'OptanonConsent'; if (typeof(window._mpspixZ) != 'string') { of the accounting professions new antifraud initiatives, such as the script.setAttribute("src", "//www.npttech.com/advertising.js"); 'hline' : 'American Greed' , We re-invest your money and the profit we earn goes to further such ministries as Christian education, care for children and senior adults, missions and new church starts. Several accountants and one attorney became concerned enough to approach senior management about ALOs deficit. July 2, 1998 December 10, 1998 Arizona Corporation Commission begins an investigation of BFA based on the Phoenix NewTimes reports. Robert H. Colson, PhD, CPA Copyright 2023, Good Faith Media | Site by, Two Words That Explain the Kyle Rittenhouse Acquittal, Challenging Racism in the Criminal Punishment System by. When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. ideas on how fraud could occur and adjust the audit program plan so that tests mps._adsheld.push(adunit) In one year, there was an amazing increase in the Former Alcor employee makes harsh allegations against cyronics foundation. mps._urlContainsEmail = function() { mps._queue.refreshads = mps._queue.refreshads || []; cStart = cStart + name.length + 1; Aug. 11, 1999 The Arizona Republic reports the foundations funds have been frozen as a result of the investigation. helped to further accelerate the demise of a once prestigious and great firm. 3210 E. Guasti Road Ontario, 91761 View on map. } 'byline' : 'Stacy Keach' , function getOneTrustCookie() { [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. "[3] Instead the BFA decided to hide its debt and began a series of dubious activities. On this Wikipedia the language links are at the top of the page across from the article title. Market data provided by Factset. 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 . by the Arizona State Board of Accountancy. Sept. 22, 1999 Former BFA director James Cook files a lawsuit against BFA in Maricopa Superior Court. financial assistance was not expected to come from any other source. Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos 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. Site by Mere. receivables only because of funds being obtained from either New Church Ventures, In 1992, records indicated that the company had lost $3.2 million due to questionable transactions. window.location.href = `/opt-in-check?pub_referrer=${encodeURIComponent(url)}`; 'cag[configuration_franchise]' : 'American Greed' , In 1989, Arizonas Global Business and Financial News, Stock Quotes, and Market Data and Analysis. return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; Investors take a leap of faith and believe their money will be secure. let cEnd = document.cookie.indexOf(';', cStart); mps._queue = mps._queue || {}; The most likely cause of this is a content blocker on your computer or network. Perceiving a lack of response, most resigned. 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). 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']; document.addEventListener("DOMContentLoaded", function(event) { Powered and implemented by FactSet Digital Solutions. If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com. accounting treatment desired by management. A written statement from the foundation says that at the completion of the bankruptcy proceedings and the creation of a new for-profit company, the Baptist Foundation of Arizona will no longer exist. const name = ONE_TRUST_COOKIE_NAME; 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. Sept. 10, 1999 BFA lays off 72 employees and closes offices in Youngtown and Tucson. 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 . All rights reserved. To this day, it is considered one of the largest affinity frauds in U.S history. 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. STRICTLY_NECESSARY: 1, 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 true; Andersen and its representatives pretended to negotiate in good faith, but in fact never had any intention of making good on their part of the settlement. Unfortunately, the issuing of unqualified opinions, even after receiving if (window.mps) { 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. The subsidiary then used that money to purchase the loans from the parent company. The Cacaces were among 11,000 investors who lost a combined $580 million when the Baptist Foundation of Arizona, or BFA, a registered nonprofit, filed for Chapter 11 bankruptcy in 1999 in what prosecutors described as a Ponzi scheme. sale of these IRA-type investments, from $7.2 million in 1984 to $211 million He pleaded guilty to six felonies and agreed to testify against other defendants, which include former CEO William Crotts and General Counsel Thomas Grabinksi. Got a confidential news tip? 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. .split(',') 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. BFA, an agency of the Arizona Southern Baptist Convention, was founded in 1948 to raise and manage endowments for church work in Arizona. Feeling pressure to show profits, investigators say, BFA officials hid losses in a web of for-profit and non-profit subsidiaries, which were supposed to be economically independent but really werent. Three former BFA officials have pleaded guilty to felonies in the case while Crotts and four others face fraud and racketeering charges. } Five other defendants pleaded guilty to fraud or other charges and agreed to pay fines, Goddard said. The Reverend Ed Shaw suggested that the BFA "Explain the situation completely to investors; ask their forgiveness; let them know their gift of principal would help if they choose to give some or all of it. Start Here; About Us. mps._queue.gptloaded = mps._queue.gptloaded || []; 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. Under Bill Crotts, the organization diverted over $140 million to two former and one active (as of 1998) director. In applying SAS 99, auditors should plan and execute every audit mps.__timer = Date.now ? Another important provision of SAS 99 is that auditors should talk to employees, 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. auditors overlook? [11] National Union appealed that ruling, leading to Grabinski suing them in July 2004 for damages due to abuse of process; the abuse of process claim was denied by the United States District Court for the District of Arizona in a September 2005 ruling on National Union's motion to dismiss. Twenty years later, Glen Crotts' son, William Pierre "Bill" Crotts, became the organization's second president. 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. Its initial mission was to raise donations and support for Southern Baptist causes. 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. manager on the BFA audit lost their CPA licenses to practice and a third CPA [3], The Arizona Attorney General's Office and the Arizona Corporation Commission conducted the criminal investigation that resulted in the convictions of eight defendants. 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. 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.