The U.S. Court of Appeals for the Tenth Circuit affirmed the dismissal of a lawsuit against the Church of Jesus Christ of Latter-day Saints on Aug. 31, 2026, ruling that plaintiffs failed to bring claims regarding alleged misuse of tithing funds in a timely manner. The decision upholds a lower court's ruling that the plaintiffs should have exercised reasonable diligence to uncover the alleged financial scheme following widespread media reports.
Allegations of Financial Deception
The litigation involved allegations that the Church and its subsidiary, Ensign Peak Advisors, Inc., engaged in fraudulent conduct to induce donations. Plaintiffs sought to represent a class of all individuals in the United States who donated money to the Church after 1997, alleging that the defendants used a complex web of entities to obscure the true size of Ensign Peak's investment portfolio.
Shell Companies and Reinvested Funds
According to court documents, plaintiffs claimed that Ensign Peak utilized 13 shell LLCs across the country to file forms with the SEC, effectively hiding the fact that the Church retained discretion over all investment decisions. The lawsuit further alleged that instead of being used for religious purposes, funds were continually reinvested through these entities.
Discrepancies in Fund Allocation
The court's opinion noted a discrepancy between the Church's public promises and its financial actions. While the Church had stated in its Ensign magazine during December 2003 and December 2006 that it would not use tithes to fund the development of the City Creek Mall near Temple Square, court records show that between 2010 and 2014, Ensign spent $1.4 billion in donated funds on the mall's construction.
The 2019 Whistleblower Report
The legal challenges were preceded by a December 2019 whistleblower report from a former Ensign employee. This report claimed that the Church underreported its assets and improperly directed tithing funds toward nonreligious commercial ventures. Following the report, news outlets including The Wall Street Journal, The Washington Post, Forbes, Fox News, CNN, The Salt Lake Tribune, and Deseret News published stories on the matter between December 2019 and February 2020.
Church Response to Allegations
In response to the 2019 reports, the Church issued a statement through its First Presidency on Dec. 17, 2019, asserting that it complies with all applicable laws regarding donations, investments, taxes, and reserves. Despite the whistleblower's claims, the Church maintained that it maintains a reserve fund for the future, a practice it defended against the subsequent lawsuits.
The Ruling on Timeliness
The Tenth Circuit's decision to affirm the dismissal was based on the principle of timeliness. The district court had previously granted the defendants' motion to dismiss under Fed. R. Civ. P. 12(b)(6), determining that the complaints were untimely. The appellate court agreed, noting that because of the extensive news coverage of the alleged scheme, the plaintiffs should have been aware of the situation more than three years before filing their suit.
Background of Litigation
The legal battle originated from a series of lawsuits filed by current and former Church members in March 2021. These suits incorporated allegations based on the whistleblower report and sought to hold the Church and Ensign Peak accountable for what plaintiffs described as the misuse of tithing funds.
