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Prison Time in Church Fraud

September 30, 2006|From the Associated Press

PHOENIX — Two former executives with the Baptist Foundation of Arizona were sentenced to prison Friday and ordered to repay hundreds of millions of dollars for defrauding investors in a botched financial scheme that bankrupted the nonprofit organization.

Former foundation President William Crotts, 61, was sentenced to eight years in prison, and former general counsel Thomas Grabinski, 46, was sentenced to six years in prison on fraud and racketeering charges. They were convicted this summer.

Maricopa County Superior Court Judge Kenneth Fields also ordered them each to repay $159 million.

The foundation, created in 1948 as a nonprofit religious entity to raise money for Southern Baptist causes, collapsed in 1999 in what was then the largest nonprofit bankruptcy protection filing in U.S. history.

About 11,000 mostly elderly investors lost almost $600 million as a result.

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