'id' : '100000099' , "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 $400,000 she said would have helped her grandchildren pay for college. The new company will, like its not-for-profit predecessor, invest its assets in real estate, venture-capital deals, and some equities. window.location.href = `/opt-in-check?pub_referrer=${encodeURIComponent(url)}`; if (!oneTrustCookie) return true; if (result && result.geo && result.geo.country_code) { head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); One pastor who had recently entrusted $1 million in church funds to. var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; from ALO and New Church Ventures (SFAS 5. [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. auditors overlook? if (typeof window === 'undefined') return; 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. This material may not be published, broadcast, rewritten, or redistributed. . Powered and implemented by FactSet Digital Solutions. Among Southern Baptists in Arizona and the neighboring states, where many of the investors live, the impact of the case may be more direct. 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. The only thing I can confidently tell investors is this: The commission will pursue every possible avenue to ensure that Arthur Andersen pays for their egregious errors., The size of the settlement, The Wall Street Journal had reported March 4, was remarkably large compared with the losses suffered by investors.. to mitigate the real estate losses. }); const OneTrustCategories = { positive results. // execute [4], The BFA sold property to the elderly that was marketed as a retirement community with a nursing home. '); than $20 million per year for several years. (function() { }); "[1] Since he was working for both companies, Grabinski was able to authorize questionable transactions. Market data provided by Factset. } console.log('PUB-GDPR-CHECK'); 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. A grand jury in April 2001 returned indictments charging former BFA officials with 32 counts of fraud, theft and racketeering. corporations, with individuals closely associated with BFA, such as
The most likely cause of this is a content blocker on your computer or network. mps._queue.gptloaded = mps._queue.gptloaded || []; But the foundation has operated independently of the convention, and state regulators say it is unlikely that the statewide group would be held liable for the foundations actions. [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. Hunsinger is one of eight former BFA officials indicted in 2001. console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches); STRICTLY_NECESSARY: 1, 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. var CNBC_MPS_FRANCHISE_TAG='american_greed'; (function(){var g=function(e,h,f,g){this.get=function(a){for(var a=a+"=",c=document.cookie.split(";"),b=0,e=c.length;b=e/100?0:100),a=[h,e,0],this.set(f,a.join(":"));else return!0;var c=a[1];if(100==c)return!0;switch(a[0]){case "v":return!1;case "r":return c=a[2]%Math.floor(100/c),a[2]++,this.set(f,a.join(":")),!c}return!0};this.go=function(){if(this.check()){var a=document.createElement("script");a.type="text/javascript";a.src=g+ "&t=" + (new Date()).getTime();document.body&&document.body.appendChild(a)}};this.start=function(){var a=this;window.addEventListener?window.addEventListener("load",function(){a.go()},!1):window.attachEvent&&window.attachEvent("onload",function(){a.go()})}};try{(new g(100,"r","QSI_S_ZN_3NNZu19yzvgN7tr","//zn3nnzu19yzvgn7tr-nysscpa.siteintercept.qualtrics.com/WRSiteInterceptEngine/?Q_ZID=ZN_3NNZu19yzvgN7tr&Q_LOC="+encodeURIComponent(window.location.href))).start()}catch(i){}})(); Inadequate disclosure regarding ALO and New Church Ventures
An increased focus on professional skepticism in gathering
[1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. the Arizona Corporation Commission as required by state law. Please make sure your computer, VPN, or Andersens effort to back out of the BFA settlement focuses on its wholly owned Professional Services Insurance Co. in Hamilton, Bermuda. if (!_qs) { With what are they going to make donations?. Yet, in 2002, years after the BFA . More information may be obtained by contacting the Foundation at 10255 Old Columbia Rd., Columbia MD, 21046, or by contacting Tom Stolle at (800) 466-5290, ext. Powered and implemented by FactSet Digital Solutions. Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern
if (cEnd === -1) { 'hline' : 'American Greed' , Looking for your Investment Portal? 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. Since August, the foundation has fired its top three officials, severed ties with the law and accounting firms with which it had worked, laid off 72 of its 127 employees, and closed its two branch offices. const blockedCategories = decodeURIComponent(matches[1]) . 'cag[project_management_team]' : 'CNBC US Team' , [10][11] In February 2004, the jury in the Arizona Superior Court civil trial found in favor of Grabinski, with the Court ordering National Union to pay Grabinski $2.5 million (equivalent to $3.6 million in 2021). The news release said the attorney general also will: seek the sequestering of insurance proceeds and other Andersen assets to insure money is available for BFA victims., seek an expedited trial in the BFA lawsuit and a declaration by the BFA of Andersens actions as having been in bad faith., send a letter to victims outlining the legal steps the state will take., seek the revocation of the licenses of the Certified Public Accountants involved in the BFA at Andersen.. 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. both in and outside of management. Arthur Andersen Faces Court Trial Over Baptist Investment Foundation. The subsidiary then used that money to purchase the loans from the parent company. on funding church start-ups and providing aid for children and the elderly. Baptist Group Execs Sentenced for Fraud. Arthur Andersen provided unqualified clean audit opinions on
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. 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. Potential financial losses in the case overshadow the losses accumulated by non-profit groups and donors who gave money to the Foundation for New Era Philanthropy. The Baptist Foundation of Arizona was founded in 1948 to raise money to back up Baptist causes and to pay a return for investors. In one year, there was an amazing increase in the
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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). window._mpspixZ = (function(a){var b="abcdefghiklmnopqrstuvwxyz".split("");a||(a=Math.floor(Math.random()*b.length));for(var c="",d=0;d
' document.addEventListener("DOMContentLoaded", function(event) { An unambiguous lesson from the BFA case is that the audit team cannot rely
Two former executives committed fraud to hide their financial mismanagement of the Baptist Foundation of Arizona, but they didn't line their own pockets, jurors said in convicting them Monday. } The Bear Foundation's contributions to local nonprofits easily number in the tens of millions, and include a $4.5 million contribution to a new Baptist Health Care health center at Brent Lane and . isEEARegionCheck(); 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. [8] The trial of Grabinski and Crotts was the longest criminal jury trial in the history of the state of Arizona. The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. Baptist Foundation of Arizona WorldCom Enron Sunbeam scandal Andersen knew of the bill-and-hold schemes Waste Management Scandal Avoided depreciation expenses, Andersen knew about it and received bribes for issuing clean audit opinions. owed BFA significant amounts of notes receivables. // check for region and redirect if country is in EEARegion is the cornerstone of a multifaceted effort by the accounting profession to
Data is a real-time snapshot *Data is delayed at least 15 minutes. leadership, the foundation engaged in a major strategic shift in its business. Bob Allen is managing editor of EthicsDaily.com. Mutual Fund and ETF data provided by Refinitiv Lipper. 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. in 1985, which highlights just how dramatically the foundations mission
(function() { disguise BFAs tenuous financial condition. mps._queue.refreshads = mps._queue.refreshads || []; Login Here. Former general counsel Thomas Grabinski was convicted of three counts of fraud and one count of illegally conducting an enterprise. of fraud and even more critical to engage in effective audit procedures to
)+[a-zA-Z]{2,}))/; BFAs failure and the subsequent penalties provide
'adunits' : 'Default' , 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. 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. Quotes displayed in real-time or delayed by at least 15 minutes. 2023 FOX News Network, LLC. The foundation says it will pay up to $5-million into a trust intended to pay legal fees to pursue claims against what a spokesman called any third parties that could be held liable for the foundations troubles. [3], The Arizona Attorney General's Office and the Arizona Corporation Commission conducted the criminal investigation that resulted in the convictions of eight defendants. 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). 'byline' : 'Stacy Keach' , The following were among the major GAAP violations alleged by
Like many
BFA informed Arizona Southern Baptist pastors of the financial crisis at a retreat held last weekend at the Wigwam Resort. If the audit team had obtained copies of ALOs detailed financial statements,
It expects that its preferred stock will start paying annual dividends of 6 per cent by 2002. (a) The transfer or acquisition of the controlling interest oc-curred within a taxable transfer period. Two of the most significant entities set up to hide BFAs nonperforming
'is_sponsored' : '0' , operations from collapsing was a constant influx of new investor money that
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. var pixelurl = ((document.location.protocol === 'https') ? 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. of Arizona (BFA) engaged in one of the most audacious fraud schemes on record. 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 a complex mesh of over 90 insider-controlled entities had been used to help
Market data provided by Factset. 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. Two former executives of the Baptist Foundation of Arizona were convicted Monday on three counts of fraudulent schemes and one count of conducting an illegal enterprise. The New Independent Fundamental Baptist Movement (New IFB) was spearheaded in part by Steven Anderson, another well-known anti-LGBTQ pastor. A Division of NBCUniversal. Several accountants and one attorney became concerned enough to approach senior management about ALOs deficit. Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. too heavily upon management assurances. The Baptist Foundation of Arizona was founded in 1948 by the Arizona Southern Baptist Convention for the purpose of raising and managing endowment funds to further Southern Baptist causes.
