Mormon church accused of misusing billions in contributions

Hillel Aron

(CN) — A class of individuals who made donations to the Church of Jesus Christ of Latter-day Saints filed a complaint in federal court in Utah Tuesday accusing the institution of using "false pretenses" to obtain such contributions for decades.

The Corporation of the President of the Church, which was entrusted with the funds to use them for charitable works, instead “secreted donations away” to a company called Ensign Peak Advisors, according to the complaint, and “used them for purposes never contemplated by donors and contrary to representations” of the church.

The church, commonly known as the Mormon church, is the fourth largest Christian demonization in the United States, with nearly 7 million members. It is also believed to hold immense wealth, thanks in large measure to the practice of tithing, in which its members donate 10% of their income every year.

The new lawsuit mirrors one filed two years ago by James Huntsman, brother of former Utah Governor and presidential candidate Jon Huntsman, Jr, which seeks the return of $5 million Hunstman donated to the church. That case is still pending.

The suit filed Tuesday names Ensign as a co-defendant and rests partially on revelations from a whistleblower, David Nielsen, who made a number of startling allegations about the church's finances earlier this year, including a claim that the church owns dozens of apartment buildings, four universities, three media companies, and a myriad of other companies.

In February, the Security and Exchange Commission fined the church and Ensign $5 million for hiding its $32 billion investment portfolio through a number of shell corporations. The church agreed to pay $1 million, and Ensign agreed to pay $4 million, to settle the charges.

One of the named plaintiffs, a Virginia resident, says in the new suit that he's donated around $108,000 to the church since the start of 2013. Another plaintiff, living in Utah, gave about $120,000. Two others gave $46,000 and $74,000, respectively. The plaintiffs claim in the suit the church has repeatedly declared that members' 10% tithe is “'always used' for charitable purposes." Members are also solicited for contributions to the church's philanthropic arm. On its website, the church states, "100 percent of all donations go to help those in need."

The plaintiffs say that the donations are "shifted throughout various church organizations, including between these three entities, to Ensign, and to Ensign’s comingled funds."

"Once funds are transferred to Ensign, they are continually reinvested and never used to fund any Church organizations or efforts," the plaintiffs said in the complaint.

The plaintiffs say that Ensign has amassed a $120 billion but is only known to have spent any of its funds twice. In 2009, it bailed out a "failing for-profit life insurance company owned by" the Mormon Church, according to the complaint. And between 2010 and 2014, Ensign paid $1.4 billion to construct the City Creek Mall, a mixed use development in Salt Lake City, Utah.

Church officials have said that no tithing money went into the construction of the mall. The plaintiffs claim otherwise.