September 23, 2005

Retirees lined the front two rows of a downtown Phoenix courtroom on Thursday for a fraud trial involving two executives with the former Baptist Foundation of Arizona.

Ernie and Betty Campbell were among 12,000 investors who lost a total of $550 million in the bankruptcy six years ago. They drove nearly 300 miles from northern Arizona to hear the opening statements with about 20 other alleged victims in Maricopa County Superior Court. "All I want is the truth to come out," said Ernie Campbell, a 71-year-old retiree. Campbell and his 67-yearold wife said they lost $650,000 and recovered only about one third of the money in a civil settlement that the foundation’s auditor, Arthur Andersen LLP, reached with investors in May 2002. Prosecutor Donald Conrad said the foundation’s sales pitch was based on religious faith and investors were told the nonprofit was solvent. Meanwhile, he said, former foundation president William P. Crotts and senior vice president and general counsel Thomas D. Grabinski knew the foundation was losing millions of dollars. But a lawyer defending Crotts asked prosecutors where the money went if Crotts truly had concocted a scheme to steal it. Conrad conceded that Crotts and Grabinski didn’t line their pockets, but he said their motive was a "desire to protect their pride, to protect their position and protect their power." Grabinski’s attorney will give opening statements today.