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Accountants Down

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"We like our case better and better," Himelrick says.

• The Bankruptcy. In 1999, BFA and many of its sham companies filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Phoenix. Claiming to have about $240 million in assets, BFA owes about $590 million to about 13,000 investors, most of whom are financially unsophisticated lower- to middle-income Christian retirees. (BFA owes another $50 million to other creditors.)

Investors have often expressed skepticism about the integrity of the bankruptcy because former BFA insiders and attorneys have requested fees from the bankruptcy estate. The bankruptcy is expected to gobble up about $10 million in investors' money for professional fees.

So far, investors haven't seen a penny of their money, but a distribution plan slated for final approval this month is expected to net -- after five years -- from 31 cents to 44 cents on their original investment dollar, depending on their classification as "collateralized" or "uncollateralized." They can expect their first quarterly check this month -- for less than 2 cents on the dollar.

• The Securities Division of the Arizona Corporation Commission. Claiming Arthur Andersen "participated" in the BFA fraud, the securities division of the Arizona Corporation Commission in late September filed a detailed complaint against the accounting firm. The state is expected to battle Arthur Andersen in an administrative hearing to exact restitution for the victims.

But on November 29, Arthur Andersen scored a legal victory and pummeled the state. Arthur Andersen persuaded hearing officer Marc Stern to delay the hearing for at least 60 days because BFA's officers and directors, now under criminal investigation, won't testify. The accounting firm says it can't get a fair shot unless the officers testify. The reason: Andersen is expected to defend itself by saying BFA directors and officers hid the fraud from Andersen CPAs.

On November 29, Fred and Betty Ordorica journeyed to Phoenix to join about 100 BFA investors as they picketed Arthur Andersen's Phoenix office on 44th Street. On that very day, Judge Stern had signed an order postponing a hearing in which the state planned to seek restitution for investors from Arthur Andersen.

But neither the Ordoricas nor their fellow picketers seemed to know anything about Arthur Andersen's victory. And they did not know that the accountancy board would fire another volley at Arthur Andersen in just two weeks.

The marching investors might have looked frail -- most were elderly, some limped with arthritis and others squinted at the sunlight from beneath old-fashioned bonnets -- but they were angry.

"It got pretty red hot out there," Fred recalls.

Although they'd never picketed before in their lives, the Ordoricas marched for six hours. They carried hand-painted double-sided poster board placards. The signs said: "We Want Our Money" and "Give My Money Back" and "Arthur Andersen Helped BFA Steal 640 Million From Investors" and "Merry Christmas, Arthur Andersen."

After the march ended, the Ordoricas kept the signs for souvenirs.

View articles on the Baptist Foundation of Arizona:
"The Money Changers"

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