Two top executives with the now-defunct Baptist Foundation of Arizona, which collapsed in 1999 in the largest nonprofit bankruptcy in U.S. history, were found guilty Monday of charges that could send them to prison for decades.
William Crotts, former president of Baptist Foundation, and Thomas Grabinski, its former legal counsel, were convicted after a 10-month trial in Maricopa County Superior Court. Prosecutors say the bankruptcy cost 11,000 mostly elderly investors more than $550 million.
Crotts, 61, and Grabinski, 46, were found guilty by a Phoenix jury of three counts of fraud and one count of knowingly conducting an illegal enterprise. The jury acquitted them on 23 counts of theft.
The two men showed little emotion when the verdicts were read. They were taken into custody at the conclusion of the hearing. Crotts hugged several members of his family before he was led away in handcuffs.
More than 100 former Baptist investors watched the reading of the verdicts in the courtroom and a nearby auditorium. Many of the investors put their life savings into the foundation, which was intended to build churches and retirement homes
“They made our lives hell for 10 years. I’d like to return the favor,” said Caty Moss, an 80-year-old former investor from Scottsdale who said she lost about $200,000.
Lead prosecutor Don Conrad said he was disappointed that the two men were acquitted on the theft charges but was satisfied with the convictions.
“So many people lost their life savings in this matter, I wanted to bring justice to these victims,” he said.
The men face between six and 23 years in prison for each count when they are sentenced by Superior Court Judge Kenneth Fields on Sept. 29.
Defense attorneys said they would appeal the convictions.
“There’s a plethora of legal problems with this case that we will bring up in the appeals court,” Crotts attorney Michael Piccaretta said.
Prosecutors agreed that Crotts and Grabinski did not personally profit from the foundation’s ruin but were responsible for hiding its losses. Five others have pleaded guilty and a sixth is awaiting trial.
Defense attorneys argued at trial that the foundation sank into bankruptcy only because authorities shut it down before administrators could turn it around.
“Had the state not forced the foundation into bankruptcy, investors would have received every penny back plus some,” Piccaretta said.
Since the collapse about $250 million has been returned to investors in settlements and liquidation of assets. The biggest chunk, $217 million, came from its former accountant, Arthur Andersen, in a legal settlement that did not require the firm to admit wrongdoing.