Baptist Foundation Board Member Pleads Guilty

One of the nation’s largest nonprofit bankruptcy filings edged closer to closure Tuesday when Lawrence Dwain Hoover pleaded guilty to a single count of fraud linked to the financial collapse of the Baptist Foundation of Arizona, reports the Associated Press.

Mr. Hoover, who is the final defendant to be prosecuted by Arizona’s attorney general in connection to the charity, served two decades on the foundation’s board and will face up to 12½ years in prison when he’s sentenced in late November. He has agreed to pay $500,000 in restitution.

The state attorney general said Mr. Hoover participated in various Baptist Foundation financial transactions that allowed the organization to falsely portray its financial position to investors.

The charity, which was formed in 1948 as the fund-raising arm of the Arizona Southern Baptist Convention, sold investments to church members, who were told that the group’s profits would benefit Christian causes.

In the late 1980s the foundation wound up using scores of shell companies to hide huge investment losses and to raise cash to pay investors promised returns. The foundation’s operations, state regulators said, had turned into a Ponzi scheme, in which money from new investors was used to pay old ones.