Nearly nine months of testimony ended Friday in the trial of two former Baptist Foundation of Arizona officials on trial for felony fraud, when the defense rested its case.

Closing arguments by lawyers are scheduled June 19-20, followed by jury deliberations. Jury selection for the case, over what prosecutors call one of the largest affinity frauds in history, began Sept. 14.

William Pierre Crotts, former president and CEO of the now-defunct Foundation, and Thomas Dale Grabinski, who was general counsel and vice president, are charged with three counts of fraud, 27 counts of theft and two counts of illegally conducting an enterprise.

Prosecutors say they bilked 11,000 investors out of $550 million before the BFA went bankrupt in 1999. If convicted, they could face up to 34 years in prison.

The state alleges the BFA, as a non-profit corporation chartered in 1948 to help Southern Baptist causes, was exempt from banking laws, but functioned like a financial institution. The BFA raised funds through sale of investment agreements and mortgage-backed notes, which in turned were invested in real estate.

When Arizona’s real-estate market tanked, the state alleges, Crotts and Grabinski, along with five earlier defendants who pleaded guilty and one unable to stand trial for health reasons, hid losses from investors in a web of subsidiaries, while continuing to solicit new investors to cover the difference.

The defendants were indicted in October 2002, after an earlier indictment was thrown out over a technicality.

The Arizona Corporation Commission ordered the Foundation to stop selling securities in August 1999. The BFA filed bankruptcy in November 1999.

Arthur Andersen, later accused of auditing failures in the collapse of Enron, settled with Baptist Foundation of Arizona investors for $217 million in January 2003.

A trust formed by the bankruptcy court to liquidate assets of the BFA has paid $453 million to creditors and investors, returning investors, depending on type, either 55 percent or 69 percent of their original money back.

The trust recovered about $8 million from sale of assets in 2005 but did not send out a year-end check, according to a letter to investors, because there were insufficient funds to do so after maintaining adequate reserves. Costs of operating the trust for five years have totaled $18.8 million.

Bob Allen is managing editor of

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