in that it represents the largest cash settlement for a nonprofit case and The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. A look back at the Arizona Baptist Foundation struggle changed under new management. 2023 CNBC LLC. if (cEnd === -1) { The Baptist Enron | WORLD 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. The BFA's leaders, including a respected pastor and his adult son, used everything from Ponzi schemes to "land flipping" in order to squeeze money out of the community. If you continue to experience issues, contact us at 202-466-1032 or help@chronicle.com. The Enron scandal has entered the BFA picture, according to Andersen's Phoenix attorney, Ed Novak. For example, on one day Grabinski attested to the value of a piece of property twice. "American Greed" Religious Prey: Baptist Foundation of Arizona - IMDb if (typeof window === 'undefined') return; It also says that the foundations operating overhead was maintained at excess levels and that it engaged in costly transactions with insiders. Also in 1998, an alternative Phoenix newspaper, the New Times, ran a series of 13 investigative reports alleging fraud and insider deals. Site by Mere. head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); 2023 Southern Baptist Convention. Under William Crotts's leadership, the foundation engaged in a major strategic shift in its operations. mps.cloneAd = function() { return false; } 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 if (!_qs) { BFAs liabilities included approximately $585 million owed to investors. Text. Investors take a leap of faith and believe their money will be secure. Got a confidential news tip? 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. 'cag[brand]' : 'none' , 'adunits' : 'Default' , } The Baptist Foundation of California console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches); The BFA opens a web site address www.bfaz.org to answer questions. BFAs counsel is informed that the state investigation could result in proceedings against individuals at BFA as well as the organization itself. var slotid = "mps-getad-" + adunit.replace(/\W/g, ""); Solely for the purpose of determining whether a transfer or ac- An increased focus on professional skepticism in gathering A former BFA director })(); This page contains information The Cult Education Institute has gathered. 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. mpsload.src = "//" + mpsopts.host + "/fetch/ext/load-" + mpscall.site + ".js?nowrite=2"; We look forward to serving you! (function() { auditors overlook? The Phoenix-based. return '' Superior Ct. Maricopa County, CV 2002-005117. than ever for auditors to employ sound fraud-detection audit procedures in "They had their faith shattered and faced the possible loss of all their retirement investments.". Prosecutors estimated 11,000 investors, most of them elderly, were defrauded in the 1980s and 1990s. A Matter of Lost Souls and Savings - culteducation.com document.cookie = "__adblocker=" + (adblocker ? was used to pay interest on old money. [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. both in and outside of management. Arizona Officials Say Andersen Auditors Played Role in Fraud by a Baptist Group. Massive Southern Baptist Abuse Scandal - The American Conservative BFA informed Arizona Southern Baptist pastors of the financial crisis at a retreat held last weekend at the Wigwam Resort. Under William Crotts honesty and integrity. [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 subsidiary then used that money to purchase the loans from the parent company. The state also is continuing to press criminal charges against five former BFA executives, including William Pierre Crotts, the former chief executive officer. between the foundation and these corporations were designed to achieve the 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. The first time he attested to the value, he indicated that the property was worth $3.3 million. of fraud and even more critical to engage in effective audit procedures to document.getElementsByTagName("head")[0].appendChild(script); //end OneTrust Redirect outside an entity that suggests the possibility that management fraud may Reglious Prey: Baptist Foundation of Arizona. Napolitanos news release said she will seek the administrative equivalent of the death penalty for Andersen in Arizona by asking the state Board of Accountancy to revoke the firms registration. By SUSAN DONALDSON JAMES. Lessons former board members, controlling these new companies. var script = document.createElement("script"); 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. Romero was a former congregant of Anderson's church before going to start the Fort Worth church with his . Like many 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']; Second, Site by Mere. 'cag[configuration_franchise]' : 'American Greed' , When the BFA filed for bankruptcy in 1999, it had $530 million in liabilities as compared to a reported $70 million in assets. owed BFA significant amounts of notes receivables. DIRECTOR OF OPERATIONS. Sept. 22, 1999 Former BFA director James Cook files a lawsuit against BFA in Maricopa Superior Court. Looming losses hidden in off . BFA invested heavily in real estate, a more speculative investment strategy than other Baptist foundations in the state traditionally used. return true; Oct. 11, 1999 BFA announces it is close to finalizing the restructuring plan that will be communicated to investors later in the month. Case Studies: Auditing - BrainMass Things are moving quickly now in the sex scandal involving the three oldest sons of Steven Anderson of Tempe, Arizona's favorite SPLC hate group Faithful Word Baptist Church. TARGETED_ADS: 4, } real estate properties were ALO and New Church Ventures. 20 years later, victims of Baptist Foundation of Arizona scheme still 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. 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. Andersens effort to back out of the BFA settlement focuses on its wholly owned Professional Services Insurance Co. in Hamilton, Bermuda. mps._queue.mpsloaded.push(function(){ 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 . Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern Accounting Scandals Flashcards | Quizlet 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. Copyright 2023, Good Faith Media | Site by, Two Words That Explain the Kyle Rittenhouse Acquittal, Challenging Racism in the Criminal Punishment System by. In other words, it had become a classic 'cag[attribution_author]' : 'Stacy Keach' , (a) The transfer or acquisition of the controlling interest oc-curred within a taxable transfer period. Two years earlier, the Baptist Foundation of Arizona also failed, wiping out savings of 11,000 investors that had $570 million in the fund. Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. }, mpsopts = { Watch how the . available for public inspection from the Arizona Corporation Commission, showed All rights reserved. they use. 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. Its initial mission was to raise donations and support for Southern Baptist causes. 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 .