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Franklin Kestner is a Pima County resident who invested $150,000 with BFA and affiliated companies.
In a class action lawsuit that is expected to involve thousands of investors, Kestner names as defendants BFA, its directors, dozens of BFA subsidiaries and affiliates, Crotts, Grabinski, Norwood, former directors Harold Friend and Jalma Hunsinger and current director Dwain Hoover.
"BFA offered and sold various securities and investment contracts to Plaintiff and the Plaintiff Class, and represented itself to be a ministry dedicated to furthering Southern Baptist and Christian causes through raising funds and providing resources to Southern Baptist charities," the suit says.
Instead, the suit says, BFA used investors' money to finance insider deals.
". . . most of BFA's assets consist of real estate holdings, approximately half of which are linked to officers and directors, including the individual defendants. . . . Many of BFA's assets are based on over-valued real estate and promissory notes owing on over-valued real estate, which values were artificially created through Defendant's fraudulent business transactions. . . . ," the suit says.
Kestner also claims Norwood and other officers and directors of BFA and affiliated companies also committed fraud because they "had knowledge of the fraudulent and deceitful transactions, practice and course of business in which the other defendants were engaged in connection with the sale of securities to Plaintiffs. . . ."
In addition to allegations of fraud and violations of state securities law, the suit also alleges breach of fiduciary duty and breach of contract.
Kestner, through his attorney, Lawrence Wilk, declined to comment.
The named defendants -- Friend, Hoover, Hunsinger, Norwood, Crotts, Deardoff and Grabinski -- did not return telephone calls seeking comment for this story.
To see an archive of the previously published "MoneyChangers" series, visit theNew Times Web site at http://www.phoenixnewtimes.com/1998/121098/baptist.html
Contact Terry Greene Sterling at 602-229-8437, or online at firstname.lastname@example.org