By Jonathan Weil Staff Reporter of The Wall Street Journal. mps.response.dart.adunits[i].data = ''; The new company will, like its not-for-profit predecessor, invest its assets in real estate, venture-capital deals, and some equities. } 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. console.log('PUB-GDPR-CHECK oneTrustCookie matches: ', matches); Baptist Foundation of Arizona was the largest non-profit in U.S. history. 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. All Rights Reserved. View Notes - Baptist Foundation of Arizona from ACCT 2101 at Kennesaw State University. typeof mps._gptfirst == "function" && mps._gptfirst(adunit, slotid); Both ALO and New Church Ventures However, the State Board With what are they going to make donations?. 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. Anderson asked for the documents and BFA officials refused to provide them. In a March 29 statement, the day after receiving notice from Andersen, the trust said one of the first steps will be to ask the mediator who presided over the settlement negotiations, retired federal judge Layn Phillips, to rule that Andersen has breached the agreement and to order Andersen to pay the $217 million as promised.. 1991 to 1994 statements and an adverse opinion on the 1995 to 1997 financial 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 . {"@context": "https://schema.org","@type": "WebPage","url": "https://www.cnbc.com/id/100000099","keywords": ["CNBC TV","Primetime Shows 2","American Greed","source:tagname:CNBC US Source"]} mps._queue.mpsloaded = mps._queue.mpsloaded || []; How did such a massive fraud develop? Ponzi scheme. 'cag[related_primary]' : '' , to these companies and received notes receivable that were recorded at the helped to further accelerate the demise of a once prestigious and great firm. } } 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. July 7, 2020 News Division banned, deleted, faithful word baptist church., Steven Anderson, youtube. 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The majority of New Church Ventures The BFA was associated with the Arizona Southern Baptist Convention, which was affiliated with the national organization. incorporated both nonprofit entities. the villa pacific palisades, ca. 'byline' : 'Stacy Keach' , One of the key provisions of SAS 99 with a questioning mind, recognizing the possibility that fraud may be present, and evaluating audit evidence should lead to a revitalized accounting culture. In applying SAS 99, auditors should plan and execute every audit 'content_id' : '100000099' , The company will be organized to hold the foundations existing assets, which are estimated to be between $160-million and $200-million. June 2, 2010, 9:03 AM. Crotts denies any wrongdoing, as he has since the story broke in the Phoenix New Times. The Enron scandal has entered the BFA picture, according to Andersens Phoenix attorney, Ed Novak. This settlement takes on a sad historical significance if (mps._urlContainsEmail()) { By SUSAN DONALDSON JAMES. 'subtype' : 'primetime_show' , some red flag warnings that fraud was occurring, led to the Andersen settlement. 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. 'path' : '/id/100000099' , The BFA had issued millions of dollars in money-losing loans. Sept. 25, 1999 BFA creates an Investors Committee to meet and negotiate with the BFA on behalf of their fellows.. Kyle Cooper. .filter(categoryPreference => !categoryPreference.includes('0_') && categoryPreference.includes(':0')) Officials at the Arizona Southern Baptist Convention were unavailable for comment. 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. Hunsinger is one of eight former BFA officials indicted in 2001. 207, or tstolle@bcmd.org. Lessons Management responded to the new environment by structuring accounting transactions The Arizona Southern Baptist Convention was founded in 1928. recently issued SAS 99, Consideration of Fraud in a Financial Statement var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; BFA invested heavily in real estate, a more speculative investment strategy than other Baptist foundations in the state traditionally used. By 1996, ALO was more than $100 million in debt. 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. renewed efforts to prevent such accounting failings in the future. Got a confidential news tip? 'is_sponsored' : '0' , 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. })(); Perceiving a lack of response, most resigned. Superior Ct. Maricopa County, CV 2002-005117. The foundations statement also acknowledges past wrongdoing, saying that the organization concealed money-losing investments by transferring them to affiliated companies. You have to deal with the embarrassment of it, the cleanup of it, but it doesnt put you out of business., Debra E. Blum is a freelance writer and has been a contributor to, An Update for Readers on Our New Nonprofit Status. Also, as a condition to the court-approved arrangement, the partner and the if (!oneTrustCookie) return true; DIRECTOR OF OPERATIONS. The March 1 settlement had prompted the cancellation of a March 4 trial against Andersen in Arizonas Maricopa County for its failure to warn investors about BFA financial irregularities described as a Ponzi scheme that led to its collapse. "[3] Instead the BFA decided to hide its debt and began a series of dubious activities. Art Toalston is a writer based in Nashville and a former editor of Baptist Press. 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. Then, BFA sold property Site by Mere. the auditors would have discovered that ALO was insolvent. if (!_qs) { return ''; Meanwhile in Phoenix, another trial with many similarities quietly entered its 17th week. fetch('https://geo.cnbc.com/info/').then(res => res.json()).then(result => { Andersens effort to back out of the BFA settlement focuses on its wholly owned Professional Services Insurance Co. in Hamilton, Bermuda. // execute var foresee_enabled = 1 }; implementation is being urged. 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. 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.. 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. In BFAs early days, it focused its attention Dec. 16, 1999 BFA committee proposes to form a new corporation to sell off its assets, to repay its debts and then cease operations. For example, Select Trading Group, a subsidiary of ALO, created its own subsidiary, Santa Fe Trails Ranch II. 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. The BFA won a religious exemption from both Arizona statutes governing securities and banking laws. 2023 FOX News Network, LLC. 'adunits' : 'Default' , statements. return false; return unescape(document.cookie.substring(cStart, cEnd)); 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. [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. 2023 FOX News Network, LLC. This material may not be published, broadcast, rewritten, 'https' : 'http') + '://pix.nbcuni.com/a-pii.gif?X=piiblock&S=' + mps.pagevars.instance + '&P=' + mps.pagevars.mpsid + '&A=' + i + '&U=' + encodeURIComponent(window.location.href) + '&_=' + window._mpspixZ; New Church Ventures sold the stock to another BFA subsidiary, also in exchange for a $1.6 million reduction in a credit line, which turned around and sold for $3.2 million to Harold Dewayne Friend, who in September accepted a plea bargain and agreed to cooperate with the prosecutors. }, mpsopts = { owed BFA significant amounts of notes receivables. 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. Market data provided by Factset. return false; between the foundation and these corporations were designed to achieve the Managing editor at EthicsDaily.com from 2003-2009, Allen wrote more than 1,500 news stories during his tenure. 'cag[brand]' : 'none' , [5], The BFA sold certificates of deposit that were non-refundable during the life of the CD. 'cat' : 'CNBC TV|Primetime Shows 2|American Greed' , Both options for investors have limitations. } The BFA now owes investors $200 million more than it did in 1995. of Accountancy alleged that because of the very material departures from GAAP Contact (909) 738-4000 info@bfcal.org. BFA ultimately filed for bankruptcy, and thousands of elderly investors lost "[6] Elder law attorney Leas wondered why BFA would sell the elderly, "an investment that would tie up more than two-thirds of their non-residential assets in an investment that would be unavailable for five years! Its initial mission was to raise donations and support April 1998 The Phoenix NewTimes, a tabloid, accuses the BFA of many financial irregularities that threatened the foundations stability. Also in 1998, an alternative Phoenix newspaper, the New Times, ran a series of 13 investigative reports alleging fraud and insider deals. 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 Baptist Foundation does have a plan to help investors recoup at least a portion of their money. Learning its principal note issuer was ALO, she checked public records and found its unaudited balance sheet listed liabilities of $109.7 million and assets at minus $6.9 million. Start Here; Testimonials; Contact Us; Start Here; Testimonials; Contact Us; Location. Founded in 1948, BFA was created as a nonprofit agency of the Arizona Southern [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). BFA, an agency of the Arizona Southern Baptist Convention, was founded in 1948 to raise and manage endowments for church work in Arizona. var script = document.createElement("script"); 'cag[attribution_source]' : 'CNBC US Source' , Arizona Officials Say Andersen Auditors Played Role in Fraud by a Baptist Group. )+[a-zA-Z]{2,}))/; Its only significant asset was 1,357 acres of undeveloped land in San Miguel County, New Mexico. real estate bubble burst and property values declined substantially. A new management committee of Joe Panter, Mark Roberts and Mark Dickerson is installed. accounting, marketing, and administrative services. BFA began to invest heavily in the Arizona real estate market, and at the SOCIAL_MEDIA: 8 Redirecting. Reglious Prey: Baptist Foundation of Arizona. In other words, it had become a classic 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. } 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. manager on the BFA audit lost their CPA licenses to practice and a third CPA 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. }; See Church Loan Guidelines for details or download a Church Loan Application. Aug. 30, 1999 Pastor Richard A. Kimsey and his wife file a lawsuit charging the BFA with running an investment sales Ponzi scheme. 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. The lead partner on Andersen's disputed 1985 audit of Lincoln was Jay S. Ozer, who also served as lead auditor of the Baptist Foundation of Arizona. } He pleaded guilty to six felonies and agreed to testify against other defendants, which include former CEO William Crotts and General Counsel Thomas Grabinksi. The Baptist Foundation of Arizona -- a non-profit fundraiser dedicated to the church. 2023 Southern Baptist Convention. Baptist Foundation of Arizona Beecher-Tilton scandal case Branch Davidians C Claudy bombing F Foreign Office papal visit memo G Greater Grace World Outreach Greater Ministries International H Hyles-Anderson College I 2015 Iglesia ni Cristo leadership controversy K Keldholme Priory election dispute David Koresh L Lonnie Latham Larry Lea [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 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. 'cag[type_franchise]' : 'American Greed' , or subscribe. script.setAttribute("src", "//www.npttech.com/advertising.js"); The following were some of the key warnings: Cases like the Baptist Foundation, along with other corporate frauds, have The BFA case involves the largest Chapter 11 bankruptcy filing by a nonprofit organization in U.S. history and the March 1 settlement was approximately twice the largest malpractice court settlement previously agreed to by Chicago-based Arthur Andersen. var setAdblockerCookie = function(adblocker) { el.parentNode.insertBefore(s, el); BFAs counsel is informed that the state investigation could result in proceedings against individuals at BFA as well as the organization itself. To this day, it is considered one of the largest affinity frauds in U.S history. mps.cloneAd = function() { return false; } const matches = oneTrustCookie.match(COOKIE_REGEX); Then, learn how Dr. Mikos, a charming doctor with a lucrative practice, turns out to be a con artist defrauding Medicare. Get this delivered to your inbox, and more info about our products and services. In order to remove those loans from its books, the BFA secretly funneled money to a subsidiary. available for public inspection from the Arizona Corporation Commission, showed be taking place requires a higher degree of due diligence by auditors. 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. of fraud and even more critical to engage in effective audit procedures to Inadequate disclosure of losses on notes receivables due 'cag[attribution_author]' : 'Stacy Keach' , var w=window;if(w.performance||w.mozPerformance||w.msPerformance||w.webkitPerformance){var d=document;AKSB=w.AKSB||{},AKSB.q=AKSB.q||[],AKSB.mark=AKSB.mark||function(e,_){AKSB.q.push(["mark",e,_||(new Date).getTime()])},AKSB.measure=AKSB.measure||function(e,_,t){AKSB.q.push(["measure",e,_,t||(new Date).getTime()])},AKSB.done=AKSB.done||function(e){AKSB.q.push(["done",e])},AKSB.mark("firstbyte",(new Date).getTime()),AKSB.prof={custid:"1320688",ustr:"",originlat:"0",clientrtt:"138",ghostip:"61.19.12.55",ipv6:false,pct:"10",clientip:"202.6.19.60",requestid:"966c667",region:"9392",protocol:"",blver:14,akM:"e12",akN:"ae",akTT:"O",akTX:"1",akTI:"966c667",ai:"265598",ra:"true",pmgn:"",pmgi:"",pmp:"",qc:""},function(e){var _=d.createElement("script");_.async="async",_.src=e;var t=d.getElementsByTagName("script"),t=t[t.length-1];t.parentNode.insertBefore(_,t)}(("https:"===d.location.protocol?"https:":"http:")+"//ds-aksb-a.akamaihd.net/aksb.min.js")}. }); mps._queue.adload = mps._queue.adload || []; For example, the Phoenix New Times reported a case wherein an individual wanted to sell a US$1.9M (million) piece of asbestos-contaminated property to the BFA for US$1 as a tax write off. return true; they use. mps._log('**** LOADED: Google PII Fix - cnbc-cms-header-insert'); 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. 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 dynamic_yield_enabled = 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 the Arizona Corporation Commission as required by state law. 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. The largest bankruptcy of a non-profit in history, the BFA, like Enron, allegedly hid losses. mps._queue.gptloaded = mps._queue.gptloaded || []; if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { A lawyer for Crotts, Michael Piccarreta, said all the foundation's investors would have been paid back if the state hadn't shut it down in 1999 for what the Arizona Corporation Commission said were faulty financial statements. if (typeof adunit != "string") return false; 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.
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