AG touts fraud trial victory as justice for victims 

The guilty verdicts today against two former top executives of the Baptist Foundation of Arizona are “a hard-earned victory for justice and for thousands of victims of fraud,” Attorney General Terry Goddard said.
Former BFA President William Crotts and former BFA general counsel Thomas Grabinski were convicted today for fraud and illegally conducting an enterprise. The verdicts came at the end of a 10-month trial, the longest criminal trial ever prosecuted by the Arizona Attorney General’s Office. The failure of the Baptist Foundation of Arizona was the largest non-profit bankruptcy in the nation’s history as of 1999.
“These verdicts are a victory for thousands of victims who believed the promises made by the defendants. They had their faith shattered and faced the possible loss of all their retirement investments,” Mr. Goddard said. “This case makes it clear that no matter how rich or powerful or well-connected you are, if you defraud investors you are going to be prosecuted and convicted.”
The case involved one of the most complex financial schemes ever brought to trial in Arizona. The defendants issued financial statements that led thousands of people to believe they were investing their savings safely and securely. When the BFA went into bankruptcy in 1999, it owed some 11,000 investors more than $550 million.
Investors have been able to recover about $250 million in subsequent civil litigation.
Criminal fraud charges were filed in April 2001 against Crotts and Grabinski. Since then, five other defendants have pleaded guilty to fraud or other crimes for their involvement in the BFA failure and have agreed to pay significant fines.
Crotts and Grabinski face a maximum sentence of more than 46 years each in prison and will be sentenced Sept. 29.