A member claims the church used members’ donations to build a shopping mall and bail out a struggling insurance venture.
LOS ANGELES (CN) — A self-proclaimed devout member of the Church of Jesus Christ of Latter-Day Saints sued the religious institution in federal court Monday over what he says was a scheme to divert over $1 billion of member tithes into the church’s real estate and insurance ventures.
California resident James Huntsman, a longtime leader and volunteer with the church, claims he was bilked out of millions of dollars of donations based on assurances the church would use the money for good.
Between 1993 and 2017, Huntsman — who is the brother of former Utah Governor Jon Huntsman Jr. — paid 10% of his annual income to the church corporation as a yearly tithing.
Around 2003, Huntsman says he began noticing a brazen church campaign to solicit donations under the guise of charitable endeavors.
Huntsman’s lawsuit, filed in U.S. District Court for the Central District of California, said the church openly lied to members, with church officials including its former president Gordon B. Hinckley saying publicly tithes would finance only non-commercial initiatives aligned with Mormon values.
“Indeed, for almost his entire life, Mr. Huntsman was a devout and faithful member of the church, taking on leadership roles and dedicating his time and resources to what he believed to be the church’s righteous mission,” Huntsman says in his 13-page complaint. “Clearly, however, the LDS Corporation failed to treat Mr. Huntsman with the same respect.”
Huntsman says the church told members their monetary contributions would fund missionary work, temple renovations, education programs, member indoctrination and other efforts.
Instead, the church corporation “lined its own pockets” with an estimated $1.5 billion of members’ donations and diverted the funds to commercial real estate projects such as the construction of a shopping mall in Salt Lake City, Utah, according to the complaint.
Church spokesperson Eric Hawkins refuted Huntsman’s claims.
“Mr. James Huntsman resigned his church membership last year. Now, he is demanding through his lawyers that tithing he paid to the Church as charitable contributions be returned to him. He claims that, contrary to assurances made by past church president Gordon B. Hinckley, the church used tithing to build City Creek, a mixed use commercial development across the street from church headquarters in Salt Lake City,” Hawkins said in an email.
“In fact, tithing was not used on the City Creek project. As President Hinckley said in the April 2003 General Conference of the Church, the funds came from ‘commercial entities owned by the church’ and the ‘earnings of invested reserve funds.’ Mr. James Huntsman’s claim is baseless.”
But tithing funds also helped the church bail out a struggling private insurance company called Beneficial Life Insurance, according to Huntsman.
“As a matter of common sense, misappropriating tithing funds to construct a commercial shopping mall and/or bail out a failing insurance company cannot in any way be interpreted to fall within the church’s stated purpose in the tithing forms, and certainly fails to comport with the church’s published teachings regarding the purpose of tithings,” Huntsman says in his complaint.
Huntsman claims he caught on to the church’s activity after reviewing a whistleblower complaint filed by a former manager of the church’s investment portfolio.
The complaint from whistleblower David A. Nielsen claimed as much as $2 billion in fraudulent activity and asserted the church hadn’t invested in charitable, educational or programs for 22 years.
Huntsman seeks recovery of millions of dollars in donations he claims were fraudulently obtained and diverted by the church.
“He will then use the recovered funds to benefit organizations and communities whose members have been marginalized by the church’s teachings and doctrines, including by donating to charities supporting LGBTQ, African-American, and women’s rights,” Huntsman says in his complaint. “Unlike the LDS Corporation, Mr. Huntsman is confident that these charities will actually use his donations for their intended purposes.”
A representative for the church corporation did not immediately respond to a request for comment by press time.