Investors hail fraud convictions of Baptist foundation officials
Leaders of Baptist Foundation of Arizona found guilty
Aug 22, 2006
With the fraud convictions of two executives of the bankrupt Baptist Foundation of Arizona, investors are expressing relief that a sad chapter in their lives has ended.
In verdicts announced July 24 after a ten-month trial jurors found William Crotts, the foundation’s former president, and Thomas Grabinski, its former general counsel, each guilty of three counts of fraud in what was the largest nonprofit bankruptcy in U.S. history when it occurred in 1999.
While investors believed that their money would aid Baptist causes— such as the building of churches—state investigators found that the two men had created a Ponzi scheme, in which new investors’ money was used to pay off earlier investors.
Bonner Magnus of Lufkin, Texas, a 78-year-old retired Southern Baptist pastor, said he and his wife invested about $750,000 with the foundation before investigators began looking into violations of state securities laws.