(Phoenix, Ariz. - September 5, 2006) Lawrence Dwain Hoover today pleaded guilty to one count of fraud in the criminal case involving the Baptist Foundation of Arizona (BFA). First, Robert Tuttle of The Reason Files 2 is reporting the same thing I am hearing from multiple sources. mps.__timer = Date.now ? for (var i in mps.response.dart.adunits) { Perceiving a lack of response, most resigned. is the cornerstone of a multifaceted effort by the accounting profession to
mps._queue.mpsloaded = mps._queue.mpsloaded || []; Oct. 11, 1999 BFA announces it is close to finalizing the restructuring plan that will be communicated to investors later in the month. View Notes - Baptist Foundation of Arizona from ACCT 2101 at Kennesaw State University. 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. 2023 FOX News Network, LLC. have a responsibility to expand their work to obtain independent corroborating
At the time of BFAs bankruptcy,
(function() { [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. April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. Hunsinger subsequently used the property as collateral to obtain a US$6.8M loan from the BFA. fiduciary requirements governing nonbank passive trustees of IRAs. or subscribe. View MLA Baptist Foundation of Arizona Scandal.docx from EDUCATION EDC 101 at Grand Canyon University. (function(){ The Enron scandal has entered the BFA picture, according to Andersen's Phoenix attorney, Ed Novak. The foundations bankruptcy marks one of the biggest financial collapses ever by a charity. Surname 1 Student's Name Professor's Name Course Date Financial Fraud Question I The litigation In order to remove those loans from its books, the BFA secretly funneled money to a subsidiary. window._mpspixZ = (function(a){var b="abcdefghiklmnopqrstuvwxyz".split("");a||(a=Math.floor(Math.random()*b.length));for(var c="",d=0;d
blockedCategories.includes(c)).length > 0; plans to church members. To this day, it is considered one of the largest affinity frauds in U.S history. Baptist Foundation indictments thrown out. [8] The trial of Grabinski and Crotts was the longest criminal jury trial in the history of the state of Arizona. 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.. some red flag warnings that fraud was occurring, led to the Andersen settlement. renewed efforts to prevent such accounting failings in the future. .split(',') "updatecorrelator" : true they use. Anderson asked for the documents and BFA officials refused to provide them. } Buckner also used Anderson and turned the information over to the firm. [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. 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. What clues did the
BFA ultimately filed for bankruptcy, and thousands of elderly investors lost
} Sept. 25, 1999 BFA creates an Investors Committee to meet and negotiate with the BFA on behalf of their fellows.. The BFA opens a web site address www.bfaz.org to answer questions. Hunsinger is one of eight former BFA officials indicted in 2001. 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. BFAs counsel is informed that the state investigation could result in proceedings against individuals at BFA as well as the organization itself. all audit engagements. Sign up for free newsletters and get more CNBC delivered to your inbox. 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. One of the key provisions of SAS 99
statements. 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. Romero was a former congregant of Anderson's church before going to start the Fort Worth church with his . real estate properties were ALO and New Church Ventures. The Arizona Baptist Foundation. If the audit team had obtained copies of ALOs detailed financial statements,
Another pastor, Manly Perry of Old Path Baptist Church in San Antonio, Texas, posted a video Nov. 19 distancing himself from the New IFB. }); el.parentNode.insertBefore(s, el); Aug. 28, 1999 The BFA board of directors votes to terminate the employment of William Crotts, Thomas Grabinski, and Donald Deardorff. When
If more than $40-million in claims are made, investors will have to share the money on a prorated basis, receiving even less than 20 cents on the dollar. 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. By Jonathan Weil Staff Reporter of The Wall Street Journal. 'type' : 'mobile: episode' , be taking place requires a higher degree of due diligence by auditors. Sentencing was set for Sept. 29. that audit public companies, in todays environment it is more important
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 . Arthur Andersen provided unqualified clean audit opinions on
of fraud and even more critical to engage in effective audit procedures to
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 . A total of $40-million is available to those who choose to cash out. When asked if a conflict of interest existed, the BFA indicated that both parties "had waived any conflicts of interest. baptist foundation of arizona scandal. both in and outside of management. Star Stacy Keach (voice) See production, box office & company info Add to Watchlist Photos if (result && result.geo && result.geo.country_code) { changed under new management. His lawyer has said there was no fraud but rather a disagreement on the value of property. 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. "host" : 'mps.cnbc.com', if (EEA_REGION_COUNTRY_CODES.includes(result.geo.country_code)) { if (typeof adunit != "string") return false; MVPNs were "fraudulently represented as one which could be redeemed at any time, although with an interest penalty. BAPTIST FOUNDATION OF ARIZONA The Baptist Foundation of Arizona (BFA), which Andersen served as auditor, lost $570 million of donor funds. return true; A Division of NBCUniversal. Lessons
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 . Other companies to look at: Cendant, RiteAid, and Sunbeam. console.log('PUB-GDPR-CHECK'); . Arthur Anderson had the same problems with the Baptist Foundation of Arizona several years earlier when 750 million in assets was more like 125 million in assets because most of the assets booked by the Baptist Foundation were found to be substantially overvalued. [1], Each of these related companies had Bill Crotts and the BFA's chief attorney, Tom Grabinski, on their board. 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. 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 convicted of fraud. Watch how the . })(); from the Baptist Foundation Fraud. As a nonprofit company, ALO filed its financial statements each year with
incorporated both nonprofit entities. These. earlier fraud standard, SAS 82. [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. mps._queue.adclone = mps._queue.adclone || []; 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. }).catch(() => {}); An investigation being conducted by Arizonas Attorney Generals office and the states Corporation Commission has already revealed that the foundation used bogus transactions and accounting tricks to hide financial losses and mislead potential investors. //begin OneTrust Redirect if (typeof mps.getAd != "function") mps.getAd = function(adunit) { The additional possibility of a bankruptcy filing by Andersen, the newspaper reported April 2, could delay any payment for years and lump the BFA investors in a pool with other Andersen creditors, including thousands of Enron stockholders.. 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. Kimsey reportedly invested $100,000 with BFA. In BFA's early days, it focused its attention Baptist Group Execs Sentenced for Fraud. if (!_qs) { When the BFA filed for bankruptcy in 1999, it had $530 million in liabilities as compared to a reported $70 million in assets. 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. document.getElementsByTagName("head")[0].appendChild(script); On this Wikipedia the language links are at the top of the page across from the article title. 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 Baptist Foundation of Arizona (BFA) was a Southern Baptist charity, which executed an affinity fraud on unwitting worshippers in the Southern Baptist community in Arizona, leading to the largest collapse of a religious financial institution in U.S. history. than ever for auditors to employ sound fraud-detection audit procedures in
head = document.head || document.getElementsByTagName("head")[0], mpsload = document.createElement("script"); The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. The audit team must put
Please make sure your computer, VPN, or Griebel said she left messages at Andersens offices in Phoenix and Chicago warning the Foundation was broke, but they were never answered. } At the time BFA filed for bankruptcy in November 1999, it had total liabilities of approximately $650 million and listed assets of approximately $290 million. var d = new Date(); of Accountancy alleged that because of the very material departures from GAAP
We are unable to fully display the content of this page. than $20 million per year for several years. if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { the State Board of Accountancy: Arthur Andersen, without admitting or denying any fault, settled an investors
Date.now() : (function() { return +new Date })(); } regarding the disclosure of related parties and the recognition of losses,
Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern
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. Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. 'cag[brand]' : 'none' , Three former BFA officials have pleaded guilty to felonies in the case while Crotts and four others face fraud and racketeering charges. 'title' : 'American Greed: Religious Prey: Baptist Foundation of Arizona | Medical Scams' , }); (function() { The Baptist Foundation of Arizona filed for bankruptcy in federal court last week, owing nearly $600-million to 13,000 people who had bought securities from the organization. if (mps._urlContainsEmail()) { const url = `${window.location.pathname}${window.location.search}`; } [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].