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Jurors Granted Recess in Baptist Foundation of Arizona Trial

Jurors in the Baptist Foundation of Arizona fraud trial are on a two-week break, following a week of deliberations in the longest and most expensive criminal trial in Arizona history.

Jury deliberations in the 10-month trial began June 28. Friday afternoon Maricopa County Superior Court Judge Kenneth Fields granted a recess until June 17 to accommodate travel plans for several jurors.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />
 
William Pierre Crotts, 61, the BFA’s former president and CEO, and William Grabinksi, 46, the former legal counsel, are charged with three counts of fraud, 27 counts of theft and two counts of illegally conducting an enterprise. If convicted they could be sentenced up to 34 years in prison.
 
The case is called the largest “affinity fraud” in history, a reference to crime targeting a specific group, in this case a religious body. It is the longest and most expensive case ever prosecuted by the State of <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Arizona, requiring dozens of expert witnesses and 32,000 documents filed into evidence.
 
The state accuses the two men, along with five other defendants who have already pleaded guilty and one still awaiting trial, of conducting a “ponzi scheme,” using money from new investors to pay interest owed to old ones, while creating the false impression the foundation was profitable by hiding losses in a web of subsidiaries and worthless loans.
 
Their deceit, prosecutors allege, wound up costing investors more than $550 million when the Foundation went bankrupt in 1999.
 
Defense lawyers argue there was no fraud, and their clients believed notes and properties being held by the Foundation would be valuable when a depressed real-estate market rebounded. The problem occurred, they say, because the Arizona Corporation Commission shut the operation down based on concerns reported in a series of articles in the Phoenix New Times.
 
Crotts and Grabinski were indicted in October 2002, after an earlier indictment was thrown out over a technicality.
 
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 EthicsDaily.com.

Previous related stories:
Defense Rests in Baptist Foundation of Arizona Trial
BFA Fraud Trial Postponed Till August
Baptist Foundation of Arizona Trial Postponed, Again
Trial Scheduled for Former Baptist Foundation of Arizona Officials
Opening Arguments Begin in Baptist Foundation of Arizona Trial
Baptist Foundation of Arizona Trial Continues
Baptist Foundation of Arizona Case Has Similarities With Enron
Former Baptist Foundation of Arizona Official Makes Deal
Judge Denies Mistrial in Baptist Foundation of Arizona Case