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More lawsuits filed against Arizona Baptist Foundation

PHOENIX (BP)–A Baptist pastor has added the Arizona Southern Baptist Convention, and one of its chief executives, to his lawsuit against the Baptist Foundation of Arizona in an attempt to regain his $100,000 investment in the troubled foundation.
Richard A. Kimsey, pastor of Desert Valley Baptist Church in the Phoenix area, filed a suit against the BFA on Aug. 30. He and his wife, Ann, invested $100,000 with BFA from the sale of a home in Georgia following their move to Phoenix in March. In their suit, they contend BFA current and former officers took investment sales “pyramided into a Ponzi scheme in which the mountain of debt could be sustained only by selling new notes and persuading investors to roll old notes into new investment.”
In an amended suit filed Sept. 20, the Kimseys added the Arizona Southern Baptist Convention, which owns BFA, and Steve Bass, executive director-treasurer of the convention’s executive board. Bass is alleged to have “solicited” Kimsey to buy the BFA promissory note. The Kimseys allege the ASBC had been assisting the BFA in persuading pastors and others to invest with the foundation.
More than 13,000 investors with more than $483 million in investment products are affected by an Aug. 10 Arizona Corporation Commission “cease and desist” order against the BFA. It ordered BFA to discontinue immediately the offering and selling of its investment products. According to the order, the foundation or its affiliates sold securities from Arizona through misrepresentations, omissions of fact and engaged in business practices in violation of state law.
Since that time, the three top executives of BFA have been fired and 72 employees have been laid off and some offices closed as the agency seeks to reduce its overhead and struggles to keep from declaring bankrupcty.
The Kimseys also added William Agee, director of missions for Central (Phoenix) Baptist Association, who they said also “solicited” the promissory note.
Neither Bass nor Agee were available for comment at the Baptist Press deadline Sept. 24.
In a related development, James Cook, a former fast-food franchise owner in the Phoenix area and a member of the BFA board of directors from 1991-97, filed a suit against BFA alleging breach of contract, conversion and unjust enrichment, according to the suit. He also has asked a judge to keep BFA from freezing assets or give him his money back, according to a report in the Sept. 23-29 issue of Phoenix New Times weekly paper.
Another class-action lawsuit against the BFA was filed Aug. 27 by investor Franklin Kestner, Sr., who charged the BFA and former and current officers and directors bilked investors by funneling their money into projects “to finance BFA’s officers and/or directors’ real estate deals which were transacted … for personal gain and profit.”
BFA, with a new management team, has told investors it was on schedule for an October completion of a plan to deal fairly with all investors and that it was also in the process of creating an advisory group of investors who will provide input directly to the board of directors and management team.
In addition, investors were told the Arizona Southern Baptist Convention had established “The Jerusalem Fund” as a relief effort.
“The fund is completely independent of the BFA, created by caring individuals to help those of you facing real hardships as a result of not being able to access your investments,” a letter told investors. Information about the fund was sent to each investor.

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  • Herb Hollinger