A federal judge is poised to decide the outcome of a high-profile fraud lawsuit against The Church of Jesus Christ of Latter-day Saints (LDS Church) and its investment arm, Ensign Peak Advisors. The lawsuit alleges that the church misrepresented the use of tithing donations, diverting funds intended for charitable purposes to commercial enterprises.
The case, initiated by James Huntsman in 2021, claims that the church used tithing contributions to finance for-profit ventures, including the City Creek Center mall in Salt Lake City. Huntsman, a member of a prominent Utah family, seeks the return of $5 million in donations, asserting that he was misled about the allocation of his contributions.
In August 2023, the 9th U.S. Circuit Court of Appeals reinstated Huntsman’s lawsuit after it had been previously dismissed, allowing the case to proceed. The court’s decision emphasized the need to examine whether the church’s statements about the use of tithing funds were deceptive.
The LDS Church has consistently denied the allegations, maintaining that all funds are used in accordance with church priorities and legal requirements. Church attorneys have argued that the lawsuit seeks to entangle the court in religious matters, potentially infringing upon First Amendment protections.
This legal battle has brought increased scrutiny to the church’s financial practices. In 2019, a whistleblower complaint alleged that Ensign Peak Advisors managed a $100 billion investment fund, raising questions about the transparency and use of church finances. In response, the church stated that it complies with all applicable laws and that a portion of funds is safeguarded for future needs.
The impending decision by the federal judge will not only impact the parties involved but could also set a precedent for how religious organizations manage and disclose their financial activities. Observers anticipate that the ruling may influence future litigation and regulatory oversight concerning the financial dealings of tax-exempt entities.
