Just doing the Lard's good work.
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Baptist Group's Leaders Convicted
Investors Lost $585 Million
By Terry Greene Sterling
Special to The Washington Post
Tuesday, July 25, 2006; A03
PHOENIX, July 24 -- Two former executives of a failed Southern Baptist
foundation were convicted here Monday in what prosecutors said was the
nation's largest fraud ever targeting members of a religious group.
William Pierre Crotts, who was president of the Baptist Foundation of
Arizona, and Thomas Dale Grabinski, the group's former chief legal
counsel, were each convicted of three counts of fraud and one count of
conducting an illegal enterprise in a scheme that lasted decades and
cheated 11,000 investors across the country of about $585 million.
In a trial that lasted 10 months, prosecutors claimed that the
executives were driven by shame to hide the foundation's mounting
investment losses, bilking investors who were recruited in Southern
Baptist churches and by Bible-quoting salesmen who visited their homes.
Investors were told their money would help Southern Baptist causes, such
as building new churches, and were promised above-market returns.
Instead, prosecutors said Crotts and Grabinski had designed a Ponzi
scheme in which new investors were needed to pay off the secret mounting
debt. Donald Conrad, an Arizona assistant attorney general,
characterized Crotts and Grabinski during closing arguments as business
failures who defrauded investors in part to "feed their financial
fantasies" that they were savvy businessmen.
The pair were handcuffed and led from Maricopa County Superior Court
after the verdict.
Prosecutors failed to show that Crotts and Grabinski profited personally
from the fraud, which involved hiding millions of dollars of losses in
shell companies they created to conceal the losses. The two men were
acquitted of 23 theft counts.
Defense attorneys had argued that the foundation could have been able to
pay off investors if state regulators had not forced it to stop selling
securities in 1999. Grabinski's attorney, Daryl Williams, said Arizona
officials simply did not understand the foundation's complicated
finances.
The two former executives will be sentenced Sept. 29. Each faces a
maximum sentence of more than 46 years, according to the attorney
general's office. James D. Porter, a foundation investor and Crotts
family friend, said he believes that Crotts is innocent despite the
verdict.
"The truth is not determined by what this court said," Porter said.
"Righteous people have spent time in jail before."
Since the foundation's 1999 bankruptcy, five other employees or
associates have pleaded guilty in connection with the fraud.
The foundation was an official agency of the Arizona Southern Baptist
Convention, which is affiliated with the national Southern Baptist
Convention. The foundation's accounting firm was Arthur Andersen LLP,
which collapsed after allegations that it had helped Enron Corp. conceal
its mounting business problems. In 2002, Arthur Andersen agreed to pay
the state of Arizona $217 million to settle a lawsuit over its work for
the Baptist foundation.
Foundation investor Bob Shaw, 59, a car salesman, said he recovered
about 68 percent of the $250,000 he invested with the foundation. But he
said Monday's verdicts were more satisfying than getting his money back.
"When they walked out of there in handcuffs," Shaw said, "that was
justice for me."
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http://www.washingtonpost.com/wp-dyn/content/article/2006/07/24/AR2006072
400948.html?referrer=emailarticle
or
http://tinyurl.com/nvxuy
--
John Hachmann aa #1782
"Those who can make you believe absurdities can make you commit atrocities"
-Voltaire
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