Lessons learned from The Baptist Foundation of Arizona fraud

I have a question. Is the SBC The Baptist Foundation of Arizona the largest evangelical fraud case?

11 thousand mostly elderly investors lost 600 million dollars.

Rick Ross has a list of reports on this case. AP 2006:

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 non-profit 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 earlier this summer.

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

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 filing in U.S. history. About 11,000 mostly elderly investors lost almost $600 million as a result.

“They took from these people their very lives,” Arizona Assistant Attorney General Don Conrad said. “We’re not just talking about money here.”

The CPA Journal has the history of The Baptist Foundation of Arizona and the lessons learned.
Here were some of the red flags:

• High turnover of key staff. Between April and November 1996, three high-level BFA staffers—a lawyer and two accountants—resigned in protest. They each wrote letters noting their concerns about continued deception of investors and board members and specific allegations of fraud.
• Major tips uninvestigated. Shortly before the completion of the 1996 audit in February 1997, a former BFA accountant met with Andersen’s BFA audit manager for lunch. The BFA accountant had formerly prepared the financial statements of ALO and New Church Ventures. She warned the audit manager that entities owing BFA material amounts of notes receivables were insolvent and incapable of paying the receivables.
• Nonprofit status in peril. Andersen’s tax practice informed the audit team in January 1998 that unrelated business income could jeopardize the foundation’s tax-exempt status.
• Newspaper articles suggesting irregularities. The Phoenix New Times published articles on April 16 and 23, 1998, “The Money Changers,” that contained extensive allegations of fraud and insider dealings at BFA. The audit team responded by reviewing each allocation and asking management if the allegations were true. Management assured the auditors that the allegations were not. On April 27, 1998, Andersen signed off on its unqualified opinion for the 1997 financial statements.