The officials, including former treasurer Donald Dale Deardoff, all have agreed to participate in an ongoing investigation into the foundation. They may be asked to testify against five other former executives, who have pleaded innocent to charges they also stole from investors. The indictment says investors were told foundation accounts were backed by collateral, paid better interest than most banks and gave some profits to church causes. It also says officials hid foundation losses by transferring bad investments to affiliates. The organization allegedly inflated the value of its land and made sizable loans to insolvent companies owned by insiders, according to court records.
Authorities say the foundation used money from new investors to pay previous investors.
The foundation filed for bankruptcy protection in 1999 after the Arizona Corporation Commission ordered it to stop selling investments. It planned to reorganize, then opted for liquidation with investors getting some 40 cents on the dollar. State Attorney General Janet Napolitano set up a victims' Internet site and phone line explaining the situation, which could take years to resolve. Civil lawsuits are also pending. The Daily Camera.