PHOENIX — Two former executives with the Baptist Foundation of Arizona were sentenced to prison Friday and ordered to repay millions for defrauding thousands of investors in a botched financial scheme that bankrupted the nonprofit organization.
Former foundation President William Crotts, 61, was sentenced to eight years, and former general counsel Thomas Grabinski, 46, was sentenced to six years on fraud and racketeering charges.
Both men also were ordered to pay $159 million to make up for money investors lost when the foundation collapsed in 1999.
Judge Kenneth Fields of Maricopa County Superior Court said he believed the men were trying to help Baptist charities instead of enriching themselves as they ran the foundation's investments.
"That's a laudable goal," Fields said. "But the ends do not justify the means."
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The foundation was created in 1948 by the national Tennessee-based Southern Baptist Convention. It grew into an independent nonprofit organization that raised money to build churches and retirement homes.
Prosecutors said that in the 1990s, the foundation took advantage of 11,000 people — most of them elderly — promising them high returns in safe, faith-based investments.
Their business plan unraveled and the foundation took on millions of dollars in debt. Instead of telling investors the truth, prosecutors said Crotts and Grabinski lied.
Crotts and Grabinski told investors the foundation's coffers were full and worth hundreds of millions of dollars, and told them to continue to invest "with a brotherly smile in the name of Jesus Christ," Arizona Assistant Attorney General Don Conrad said. Though they didn't make money from the deal, Conrad said the executives received comfortable salaries. They also got to control millions of investor dollars that allowed them to "feed their fancies as real-estate moguls."
"They took from these people their very lives," Conrad said. "We're not just talking about money here."
Family members and friends of Crotts and Grabinski wept throughout the sentencing hearing. Many had blamed the foundation's problems on state prosecutors. When authorities shut down the organization's investment operation in 1999, they said, the foundation was forced into bankruptcy.
"Two men were railroaded today," foundation investor Dorie Duff said after hearing the sentence.
Crotts and Grabinski were each convicted this summer of three counts of fraud and one count of illegally conducting an enterprise in what has been called the largest nonprofit bankruptcy filing in U.S. history. Fields dropped two counts of fraud for both men this week, saying they were redundant.
The sentencing came at the end of a two-day hearing where many former investors pleaded with Fields to show leniency.
"You will never, ever convince me that Bill Crotts or Tom Grabinski got out of bed and said, 'Let's figure out a way to take away people's wealth,' " said Byron Banta, 71, a retired pastor at Corona Baptist Church in Chandler.
"That was never their intention."
Both men sat quietly throughout the hearing in striped jailhouse uniforms, pink handcuffs and leg irons.
Before they were sentenced, Crotts told Fields that the foundation was a "calling" of his. "A calling is something you cannot not do. And I was called to the Baptist Foundation of Arizona," Crotts said.
Grabinski wept as he pleaded with the judge for shorter than the minimum sentence of three years.
"Please do what you can to send me home to my family as soon as possible," Grabinski said.
"They took from these people their very lives. We're not just talking about money."
Don Conrad
Prosecutor
