Guilty verdicts against two former executives in the Baptist Foundation of Arizona (BFA) last week represent an extremely important victory for our office and Arizona law enforcement.

Former BFA President William Crotts, 61, and former BFA general counsel Thomas Grabinski, 46, were each found guilty by a Maricopa County Superior Court jury of three counts of fraud and one count of conducting an illegal enterprise.  Each faces a maximum sentence of more than 46 years when they are sentenced on September 29, 2006.

The Foundation cheated some 11,000 investors of more than $585 million.  When it collapsed in 1999, BFA was the largest non-profit bankruptcy in the nation's history.  The case also was the country's biggest fraud ever that targeted members of a religious group.  Investors were promised above-market returns and told that their money would help fund Southern Baptist building projects and other worthwhile causes.

Because of the case's size and complexity, the trial lasted 10 months, making it the longest criminal trial in Arizona history.  More than 9,000 documents, containing over one million pages, were introduced into evidence.

The guilty verdicts are a great credit to the determination, legal skills and sheer grit of our prosecution team.  They were up against a vigorous, multi-million-dollar defense and had a huge task to make the complex financial frauds understandable to the jury.  Our team, led by Criminal Division Chief Counsel Don Conrad, began work on this case more than five years ago when the first indictments were returned.  Five other BFA officials previously pleaded guilty to fraud charges, and one defendant has not yet been tried.

The magnitude of the Baptist Foundation fraud puts it in the same league as the recent trials of top executives from Enron, WorldCom and Tyco.  Those cases, however, may have been easier to prosecute because the defendants pocketed millions of dollars at the expense of their companies.  In the BFA case, the two defendants did not personally profit from the huge investor losses.  We proved to the jury that Crotts and Grabinski were driven by shame and ego to hide the foundation's increasing losses from investors.

I decided to take this case to trial, rather than try to reach a settlement with the defendants, in large part because only a decision by a jury of their peers could bring closure for the thousands of victims of the BFA fraud.  That point was underscored by the closing words of the Washington Post's July 25 story on the convictions: 

"Foundation investor Bob Shaw, 59, a car salesman, said he recovered about 68 percent of the $250,000 he invested with the foundation.  But he said Monday's verdicts were more satisfying than getting his money back.  ‘When they walked out of there in handcuffs,’ Shaw said, ‘that was justice for me.’”

Finally, I believe strongly that these verdicts send a compelling message to anyone who contemplates financial crimes in our state – we stand ready to investigate, indict and prosecute.  We will aggressively pursue these cases, regardless of their complexity or the deep pockets of the defendants, even if it takes five years of preparation and 10 months in trial!

I want to especially acknowledge the BFA jury.  The 17 men and women paid close attention through 100 days of trial.  After deliberations were concluded, the 12 panel members and four of five alternates attended the final day when the verdicts were announced.  These jurors did an incredible job, made great sacrifices and deserve our gratitude.

Terry Goddard