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Former Mormon claims $1.4 billion in tithes were misused for Utah shopping center

MADISON - ST. CLAIR RECORD

Tuesday, November 26, 2024

Former Mormon claims $1.4 billion in tithes were misused for Utah shopping center

Federal Court
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James Rosemergy | Carey Danis & Lowe

EAST ST. LOUIS - Former Mormon Joel Long of St. Louis County filed a lawsuit in the Southern District of Illinois, claiming church leaders took at least $1.4 billion in tithes and invested it for commercial profit.

Long sued the Church of Jesus Christ of Latter Day Saints and its Ensign Park Advisers entity at U.S. district court on Dec. 15, seeking to rescind tithes of a nationwide class.

His counsel, James Rosemergy of Carey, Danis, and Lowe in St. Louis County, claimed Long discovered the fraud in May through the 60 Minutes program on CBS television.

Rosemergy claimed Long relied on representations that the church would use tithes to build and maintain temples and meeting houses, sustain missionary work, educate members, and care for the poor and needy. 

Former presidential candidate Jon Huntsman filed an individual suit in California in 2021.

District Judge Stephen Wilson of Los Angeles granted summary judgment to the church but Ninth District appellate judges reversed him.

The church moved for a second hearing, and the motion remains pending.

Long’s complaint proposes to certify either a national class or an Illinois class.

It alleges fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation, consumer fraud, breach of fiduciary duty, unjust enrichment and civil conspiracy.

Rosemergy wrote that defendants repeatedly represented in video broadcasts and print publications that tithing funds weren’t being used for commercial profit.

He claimed they specifically represented that tithing funds weren’t being used to purchase land and develop a City Creek Center mall in Salt Lake City.

“These statements were made in part because of concerns by LDS Church members that Defendant LDS Corporation was doing just that,” he wrote. 

Rosemergy proposed a class period starting no later than April 5, 2003.

On that date, according to the complaint, acting president Gordon B. Hinckley stated in a video broadcast that the church would not use tithing funds to acquire and develop the property.

Rosemergy claimed Hinckley stated funds would come from commercial entities of the church. 

He claimed Deseret News, the church’s daily paper, published an article in 2007 stating money for the project wouldn’t come from tithing.

The article allegedly stated the church’s development arm would use money from other real estate ventures.

Rosemergy claimed David Nielsen of Ensign Peak then complained to the Internal Revenue Service in 2019 that the church used tithing funds for the project.

Nielsen allegedly argued that the church should lose its tax exempt status.

Rosemergy wrote that the Securities and Exchange Commission announced this year that the church and Ensign Peak settled allegations of disclosure failures and misstated filings.

He claimed the church and Ensign Peak created 13 shell companies to prevent public disclosure of the church’s equity securities holdings.

Ensign Peak agreed to a $4 million penalty, and the church agreed to $1 million.

Rosemergy claimed plaintiff Long was an active member of the church from 1979 to 2017 and worked full time without pay as a missionary from 1990 to 1992.

Long lived in Metropolis from the first day of the class period to 2012 and paid about $60,000 in tithing in Illinois.

Rosemergy claimed 60 Minutes broadcast an interview with Nielsen in May.

He claimed Long spoke with close relatives who were former members of the church and then watched the interview on YouTube.

He added that Long and class members didn’t know and couldn’t have known of the fraud until 60 Minutes aired the interview.

Rosemergy claimed none of the allegations in the complaint arose from beliefs, practices, doctrines, or governance of the church or its members.

“In other words, this case has nothing to do with and does not implicate the First Amendment or the Free Exercise Clause in the Constitution of the United States,” he wrote. 

In the Huntsman case, Judge Wilson concluded that no reasonable juror could find the church made a misrepresentation.

Wilson found Hinckley explained that the church would use earnings from invested reserve tithing funds.

“Defendant did exactly what Hinckley said Defendant would do,” he wrote.

Two of three Ninth District judges found a reasonable juror could conclude that the church knowingly misrepresented the financing, and Huntsman relied on the misrepresentations.

The church moved for a second hearing or a hearing before all Ninth Circuit judges.

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