It is expected to last until at least March, with an estimated cost of $1.6 million to Arizona taxpayers. SOCIAL_MEDIA: 8 head.insertBefore(mpsload, head.firstChild) . 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 . In the case, it claims that Arthur Anderson gave investors a false sense of security after giving out Anderson issued a clean audit in order to attract new investors. How did such a massive fraud develop? ALO in turn sold the stock to New Church Ventures, in exchange for a $1.6 million reduction in ALOs credit line owed to New Church Ventures. }); Under Bill Crotts, the organization diverted over $140 million to two former and one active (as of 1998) director. 'cag[related_primary]' : '' , Carleton College Christina Farhart, political science Jonathan Lafky, economics Adam Loy, statistics Andrew Poppick, statistics Sandra Rousseau, French Juliane Schicker, German Ithaca College Kyle Armbrust, performance studies Patricia Capaldi, art Mat Fournier, world languages, literatures and cultures David Hajjar, speech-language pathology and audiology Carly Jo Hosbach-Cannon, speech . "These verdicts are a victory for thousands of victims who believed the promises made by the defendants," Attorney General Terry Goddard said in a statement. Baptist Convention. }
Appeals court upholds convictions of Baptist Foundation of Arizona if (typeof mps.getAd != "function") mps.getAd = function(adunit) { } Aug. 27, 1999 A class action lawsuit filed by investor Franklin Kestner Sr. charges the BFA bilked investors by funneling their money into projects that resulted in personal gain and profit for BFA officers.
A Matter of Lost Souls and Savings - culteducation.com The clause was depicted as a housekeeping measure, Arizona Attorney General Janet Napolitano said, according to the paper, which quoted her as declaring, Arthur Andersen lied., Napolitano, according to a news release from her office, will be seeking severe penalties against Andersen LLP (formerly Arthur Andersen) and others., This is an absolute outrage, Napolitano said. The auditors were Arthur Andersen, the same firm that audited Enron. Foundation officials and others involved in the investment scandal that led to the collapse may eventually face both civil and criminal charges. 'adunits' : 'Default' , In applying SAS 99, auditors should plan and execute every audit
}, mpsopts = { Scandals and stock market crashes . PC Phone Home
Inside Higher Ed's News Andersen reneges on $217M settlement with Ariz. Baptist foundation const ONE_TRUST_COOKIE_NAME = 'OptanonConsent'; Like many
Legal Statement. One, Karen Paetz, set up a lunch meeting with an Arthur Andersen official in February 1997, warning about ALOs losses and encouraging auditors to request detailed financial statements for both New Church Ventures and ALO. of fraud and even more critical to engage in effective audit procedures to
'cat' : 'CNBC TV|Primetime Shows 2|American Greed' , former board members, controlling these new companies. The company will be organized to hold the foundations existing assets, which are estimated to be between $160-million and $200-million. mps._queue.adview = mps._queue.adview || []; of Arizona (BFA) engaged in one of the most audacious fraud schemes on record. } When the foundation was closed by the Arizona attorney general's office, it owed $570 million to investors and had assets worth an estimated $220 million. Aug. 11, 1999 The Arizona Republic reports the foundations funds have been frozen as a result of the investigation. on funding church start-ups and providing aid for children and the elderly. 'content_id' : '100000099' , honesty and integrity. A grand jury in April 2001 returned indictments charging former BFA officials with 32 counts of fraud, theft and racketeering. } else {
The Baptist Foundation of California The collapse of Bryant Financial Associates was a complete scandal that exposed the fraudulent activities of its executives. 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.
"Fraudulent Practices" | News | Phoenix | Phoenix New Times | The } A few days later, the Kimseys' money had all but vanished. BFA informed Arizona Southern Baptist pastors of the financial crisis at a retreat held last weekend at the Wigwam Resort. changed under new management.
Lewis Bear Jr., one of Pensacola's biggest philanthropists and 10 Major Accounting Scandals That Caught the Public's Eye: What Do They "They had their faith shattered and faced the possible loss of all their retirement investments.".
Istoria Ministries Article Archive: Southern Baptists Who Break the Law It expects that its preferred stock will start paying annual dividends of 6 per cent by 2002. Legal Statement.
Baptist Foundation of Arizona - By watching and reviewing The Arizona Baptist Foundation. The Arizona Southern Baptist Convention was founded in 1928. 2023 Southern Baptist Convention. script.setAttribute("async", true); (function(){ } First case: The Baptist Foundation of Arizona invests and loses millions entrusted by churchgoers, and its mission ends in scandal. Sept. 22, 1999 Former BFA director James Cook files a lawsuit against BFA in Maricopa Superior Court. 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. 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. help restore investor confidence and supersedes the Auditing Standards Boards
Superior Ct. Maricopa County, CV 2002-005117. The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. 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. BFAs failure and the subsequent penalties provide
The BFA filed for Chapter 11 bankruptcy that November, listing assets of $220 million and liabilities of $640 million. Prosecutors estimated 11,000 investors, most of them elderly, were defrauded in the 1980s and 1990s. Under William Crotts's leadership, the foundation engaged in a major strategic shift in its operations. of the accounting professions new antifraud initiatives, such as the
The Baptist Foundation of Arizona was established with the pretense of serving Southern Baptist causes. 'cag[type_creator]' : 'Stacy Keach' , if (!oneTrustCookie) return true; STORAGE: 6, typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); Aug. 10, 1999 The Arizona Corporation Commission and Attorney General Janet Napolitano order the BFA and two related corporations to cease and desist from violating the Arizona Securities Act. accounting treatment desired by management. We are unable to fully display the content of this page. if (typeof(window._mpspixZ) != 'string') { Arizona real estate prices were skyrocketing in the early 1980s. Bob Allen is managing editor of EthicsDaily.com. mps._queue = mps._queue || {}; 'cag[attribution_source]' : 'CNBC US Source' , 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. network allows javascript and allows content to be delivered from v144.philanthropy.com and chronicle.blueconic.net. Crotts, one of three remaining defendants pleading innocent, says he was an innocent victim who himself lost $800,000. console.log('PUB-GDPR-CHECK oneTrustCookie: ', oneTrustCookie); 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.
The Baptist Foundation of California. } Quotes displayed in real-time or delayed by at least 15 minutes. The Baptist Foundation of Arizona filed for bankruptcy in federal court last week, owing nearly $600-million to 13,000 people who had bought securities from the organization. window.location.href = `/opt-in-check?pub_referrer=${encodeURIComponent(url)}`; Redirecting. Site by Mere. The organization did this through the use of over 63 different public and private organizations all directly affiliated with the BFA. Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. A report has been made to law enforcement, and I'm guessing . In BFAs early days, it focused its attention
To this day, it is considered one of the largest affinity frauds in U.S history. that ALO had a negative net worth of $116 million and had been losing more
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. 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.. 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. 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. You may then be asked to log in, create an account if you don't already have one, the firm should have issued either a qualified or an adverse opinion on the
or, indirectly, from BFA itself. All eyes are on Houston this week, as jury selection gets underway for the long-awaited criminal trials of former Enron leaders Kenneth Lay and Jeffrey Skilling on charges of corporate fraud. the Arizona Corporation Commission as required by state law.
The Foundation Speaks | News | Phoenix | Phoenix New Times | The Baptist Foundation of SC STAFF 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. 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. bounce back, but by the mid-1990s the only phenomenon that kept BFAs
Feb. 19, 2002 4:00 pm ET. }); TARGETED_ADS: 4, In 1998 Deeann Greibel, a financial planner and CPA in Mesa, Ariz., looked into BFA finances on behalf of a client and found it was heavily underwritten with IOUs. These. script.setAttribute("src", "//www.npttech.com/advertising.js"); if (isOneTrustAnyBlocked()) { 207, or tstolle@bcmd.org. 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 . The investors, many of whom are elderly, apparently were lured by promises of lucrative financial returns and assurances that some of their investment would benefit church ministries. own, and both organizations paid BFA substantial management fees to provide
is the cornerstone of a multifaceted effort by the accounting profession to
[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. } Unfortunately, the issuing of unqualified opinions, even after receiving
Lessons from the Baptist Foundation Fraud - The CPA Journal Arthur Andersen Reaches Deal (Again) With Baptist Foundation of Arizona Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); 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. Crotts denies any wrongdoing, as he has since the story broke in the Phoenix New Times. Yet it raised most of its money by selling investment products to individuals and invested most of those funds in ALO, an allegedly phony company owned by one-time BFA director Jalma Hunsinger. manager on the BFA audit lost their CPA licenses to practice and a third CPA
baptist foundation of arizona scandal. STRICTLY_NECESSARY: 1, 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 to mitigate the real estate losses. People of faith vulnerable to 'affinity frauds,' authorities say. New Church Ventures
In a typical year-end flurry of transactions to help BFA show a profit, Santa Fe Trails Ranch II was transferred from Select Trading Group to ALO on Dec. 26, 1995. both in and outside of management. 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 State Board of Accountancy: Arthur Andersen, without admitting or denying any fault, settled an investors
Reglious Prey: Baptist Foundation of Arizona. to these companies and received notes receivable that were recorded at the
(function() { Some 13,000 investors lost $570 million, mainly elderly Baptists, some of whom lost their entire life's savings. 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. 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. } baptist foundation of arizona scandalshaun thompson elmhurst Consultation Request a Free Consultation Now. BFA management was highly motivated not to show any losses and to report only
[11], In early 2007, several former members of the BFA's executive management team were sentenced for the fraudulent activities associated with the BFA. We want to hear from you. Nov. 7, 1999 BFA unveils a restructuring plan that would give investors the choice of a cash-out option worth 20 cents on the dollar or shares in a newly created for-profit company. Investors Lost Millions in Church Fraud Executives Sentenced. 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. Payments were being made on the
The Phoenix-based. })(); Site by Mere. console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches);
Pope Francis Says Homosexuality Is 'A Sin' but Should Not Be The foundation, controlled by the Arizona Southern Baptist Convention, declared bankruptcy in 1999 after state regulators ordered it to stop selling securities. mps._queue.refreshads = mps._queue.refreshads || []; It was eventually revealed that it had over $500 million in liabilities. mps._urlContainsEmail = function() { })(); Baptist Foundation of Arizona was the largest non-profit in U.S. history. Officials at the Arizona Southern Baptist Convention were unavailable for comment. By Jonathan Weil Staff Reporter of The Wall Street Journal. } 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. 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. The most likely cause of this is a content blocker on your computer or network. statements for periods beginning on or after December 15, 2002, and earlier
[4], The BFA sold property to the elderly that was marketed as a retirement community with a nursing home. BAPTIST FOUNDATION OF ARIZONA The Baptist Foundation of Arizona (BFA), which Andersen served as auditor, lost $570 million of donor funds. After a series of delays, a criminal trial for Crotts and Grabinski got underway in September 2005.
15-Year-Old Allegedly Raped, Then Forced to Confess to Church 'pubdate' : '1343999322' , 'path' : '/id/100000099' , In 2002 Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron.
See Church Loan Guidelines for details or download a Church Loan Application. let cEnd = document.cookie.indexOf(';', cStart); Twenty years later, Glen Crotts' son, William Pierre "Bill" Crotts, became the organization's second president. 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. 'byline' : 'Stacy Keach' , 'cag[project_management_team]' : 'CNBC US Team' , Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos 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. (Phoenix, Ariz. - June 10, 2009) Attorney General Terry Goddard today announced that the Arizona Court of Appeals has upheld the convictions and sentences of former Baptist Foundation of Arizona executives William Crotts and Thomas Grabinski. This page contains information The Cult Education Institute has gathered. The foundations statement also acknowledges past wrongdoing, saying that the organization concealed money-losing investments by transferring them to affiliated companies. The BFA became dependent upon future investors to pay older investors and loan interest. The Baptist Foundation of Arizona was formed in 1948 by the Arizona Southern Baptist Convention (Convention) to raise and manage endowment funds for Southern Baptist charities. Looking for your Investment Portal? [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. return Object.values(OneTrustCategories).filter((c) => blockedCategories.includes(c)).length > 0; 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. positive results. 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.
Baptist Foundation | Baptist Convention of Maryland/Delaware - BCM/D Arthur Andersen and the Baptist Foundation The foundation halted security sales in August, however, when state regulators found that it did not have the money to cover its debts to investors.
2 ex-Baptist Foundation execs sentenced for fraud - Arizona Daily Star [1], The Baptist Foundation of Arizona declared bankruptcy in 1999, citing $530 million in liabilities against $70 million in assets. View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. if (!mps._ext || !mps._ext.loaded) { A new management committee of Joe Panter, Mark Roberts and Mark Dickerson is installed. mps.__intcode = "v2"; leadership, the foundation engaged in a major strategic shift in its business. SAS 99 is effective for audits of financial
In 1989, Arizonas
'cag[attribution_author]' : 'Stacy Keach' , all audit engagements. const blockedCategories = decodeURIComponent(matches[1]) One of the key provisions of SAS 99
var _regex = /([^=&/<>()[].,;:s@"]+(.[^=&/<>()[].,;:s@"]+)*)@(([[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}.[0-9]{1,3}])|(([a-zA-Z-0-9]+. document.getElementsByTagName("head")[0].appendChild(script); The audit team requested the financial statements
BFAs counsel is informed that the state investigation could result in proceedings against individuals at BFA as well as the organization itself. cEnd = document.cookie.length; el.parentNode.insertBefore(s, el); real estate properties were ALO and New Church Ventures. 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. Management set up independent separate
//begin OneTrust Redirect 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. )+[a-zA-Z]{2,}))/; Through it all, Andersen continued to give BFA clean audits, until the Arizona Corporation Commission forced the foundation to stop selling securities in August 1999. 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. } "[6], Mechanisms whereby the early investors make a profit by receiving the contributions of later investors. Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. Also, as a condition to the court-approved arrangement, the partner and the
var CNBC_Premium = CNBC_Premium || {}; Start Here; About Us. and evaluating audit evidence should lead to a revitalized accounting culture. sale of these IRA-type investments, from $7.2 million in 1984 to $211 million
While the recently enacted Sarbanes-Oxley Act may only directly impact auditors
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. The BFA had issued millions of dollars in money-losing loans. Under his leadership, the organization held strict moral values, including its officers being forbidden to gamble or drink alcohol. His lawyer has said there was no fraud but rather a disagreement on the value of property. [11] Independent of the abuse of process ruling, the original Arizona Superior Court ruling was upheld by the Arizona Court of Appeals in March 2005, at which point National Union paid the $2.5 million to Grabinski. (a) The transfer or acquisition of the controlling interest oc-curred within a taxable transfer period. or subscribe. Data is a real-time snapshot *Data is delayed at least 15 minutes. The Baptist Foundation of Arizona was founded in 1948 to raise money to back up Baptist causes and to pay a return for investors. 2023 FOX News Network, LLC. The Mirage But sometimes in the. 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. mps._adsheld = []; 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. The first time he attested to the value, he indicated that the property was worth $3.3 million. from the Baptist Foundation Fraud. const OneTrustCategories = { 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. 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. Crotts and Grabinski could face six to 23 years for each count.
Reglious Prey: Baptist Foundation of Arizona - CNBC document.cookie = "__adblocker=" + (adblocker ? 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 .
Case Studies: Auditing - BrainMass The following were among the major GAAP violations alleged by
} Buckner also used Anderson and turned the information over to the firm. 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. return '';
6. Arthur Andersen Presentation Flashcards | Quizlet June 7, 2022 . Audit. In BFA's early days, it focused its attention can are designed to be unpredictable and unexpected. var mps = mps || {}; For example, Select Trading Group, a subsidiary of ALO, created its own subsidiary, Santa Fe Trails Ranch II. 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. 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. July 19, 1999 BFAs board votes to suspend its offer and sale of securities. 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. mps._queue.gptloaded.push(function() { Southern Baptist Foundation Scheme in Arizona. incorporated both nonprofit entities. 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. 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.