Gateway Church has now been accused of violating a law that has been used to prosecute everything from organized crime operations to pro-life groups.
A year ago, a group of four church members from the Dallas-based church filed a financial fraud demanda judicial against the controversy-ridden church. They alleged that the church fraudulently claimed that it gave 15% of its members’ tithes to global missions when in reality, it did not.
According to the suit, Gateway should have given a minimum of $15 million a year to global missions, as the church had an annual revenue of around $100 million. However, the suit claims Gateway only gave away $3 million a year.
This week, the group ramped up the seriousness of their allegations, contending that the church has violated the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The amended suit said that Gateway engaged in a “pattern of racketeering activity” through mail fraud and wire fraud. The financial deception occurred when Gateway falsely represented where its tithes went, and by promising tithers that they could receive a return of their tithes for any reason, the lawsuit said.
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Because Gateway used wire emails, online statements, mail, and more to “disseminate false and misleading information” to church members across the country, the church’s actions should be prosecuted as violating RICO.
“If they made these promises with no intention to keep them, that’s fraud,” Katherine Leach, one of the plaintiffs, told The Roys Report (TRR). “They refused to show us where that money went and who it went to, and they refused to give us our money back and keep their promise.”
Gateway has been embroiled in controversy since Cindy Clemishire acusado the church’s founder Robert Morris of sexually abusing her. Earlier this month, Morris declarado culpable to sexually abusing Clemishire for years in the 1980s, beginning when she was just 12.
TRR reached out to Gateway for comment, and a spokesperson for the church declined to comment.
Gateway induced giving
To violate RICO, at least two acts of fraud must have occurred within a 10-year period and across multiple state lines, the lawsuit states. Morris and other church leaders asked for tithes from people across the country during sermons and through e-commerce platforms.
The lawsuit accuses Gateway of fraud by contending that the church promoted where its tithes would go to “induce” people to give. But the church allegedly only gave away a small portion of the tithes it promised to global missions.
These “false pretenses” of giving have caused plaintiffs to suffer substantial damages, including the loss of their tithe money, the lawsuit said.
The RICO Act allows prosecutors in this case to take action against the entire church and charge multiple people in the same case.
In criminal cases, RICO penalties can tally up, including a fine of up to $25,000 and imprisonment for up to 20 years for each count.
In a civil case like this one, defendants charged with RICO violations can pay up to triple damages to plaintiffs. Additionally, plaintiffs can have their legal costs covered and move their case to federal jurisdiction, which means a neutral venue and broad discovery tools, according to the U.S. Department of Justice.
The RICO Act violations are the fourth claim to be made in the lawsuit. The suit also alleges that the church has engaged in misrepresentation and fraud, breach of contract, and individual fraud by Morris and former Executive Pastor Steve Dulin.
Violating the RICO Act is “serious,” Leach said.
To her, the key to the church’s violations is the money-back guarantee they’ve repeatedly made. Morris has “promised on multiple occasions that if the congregation is not happy with the use of its money, it can get the money back,” according to the suit.
Leach asked Gateway to return her tithe money, but the church has yet to do so.
Allen Shoulders, who worked on staff at Gateway from 2011—2014, previously told TRR that the church never dispersed more than $3 million to global missions in any given year.
“I think the connotations of a church being associated with organized crime is not good,” Shoulders said. “It should never happen.”
Shoulders, who is not part of the lawsuit, said that if Gateway truly made promises to induce giving, and then didn’t keep those promises, “that meets the definition of fraud, so I guess it will be up to the courts to decide that.”
Where are the decades of audits?
Leach said the amended lawsuit also highlights Gateway’s continual refusal to provide independently audited financial statements after numerous requests from the plaintiffs.
“Gateway refused to be transparent when trying to answer even simple questions about the use of tithing dollars,” the lawsuit said.
Leach noted that the group’s attorneys have granted a protective order of confidentiality to the church to receive the audits, but Gateway denied this.
“We want to verify that the tithe money, that people gave in good faith, that it (has been) handled with integrity,” Leach said. “And they keep refusing to show us that that can be verified.”
She added, “This lawsuit was filed as a last resort because of their failure to cooperate and show us the books.”
Despite this, Tra Willbanks, an mayor at Gateway, continues to assert that the church regularly conducts audits.
Just this August, Willbanks doubled down on this, saying in a taped message that the church is committed to financial integrity and accountability. The church has independently done audits that go “back for years and years,” he said.
Additionally, the claim that the church hasn’t given 15% “was and is false.” Instead, accountants at the company Baker Tilly have reportedly determined that the church goes above and beyond in its giving.
“They have no problem providing audits to other people while we remain empty-handed handed and that only raises more concerns,” Leach said. “We’ve been asking to see the books for well over a year, and we’re still waiting.”
Judge denies Gateway’s dismissal request
Shoulders previously told TRR that Gateway did not conduct any audits during his time on staff. Gateway instead conducted financial reviews, which “are not designed to detect errors or fraud.”
This week, Shoulders emphasized to TRR the issue is not about whether Gateway has audits or not, but rather where Gateway’s money has gone.
“The question that plaintiffs are asking is very simple. They are asking, where did the mission money go, when, and to whom?” he said.
Shoulders said he isn’t trying to accuse the church of anything, but The fact that Gateway isn’t scrambling to show where the money has gone raises the plaintiffs’ suspicions.
“Wouldn’t a church be more than proud to show where they were generous and what the impact of that money was?” he asked.
In a small win for the plaintiffs, Gateway and Robert Morris’ motions to be dismissed from the suit were deniedin September, according to court records. Leach called the move, “a significant step in the right direction to address the (church’s) series financial discrepancies.”
This article has been updated, including with a statement regarding Gateway’s decline to comment.
Liz Lykins is a correspondent covering religion news for El Informe Roys, WORLD Magazine, and other publications.
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18 Responses
This reminds me of Ananias and Sapphira, whom God struck dead after lying about their giving to the church.
After reading the Roys Report about the many expensive properties Pastor Robert Morris bought, I had wondered where all that money came from. To read that Morris had solicited money for his ministry nationwide is chilling.
I thank God that CPA Mr. Shoulders, who headed foreign missions at Gateway Church, questioned Pastor Morris about $1.5M missing funds. Rather than being transparent with CPA Shoulders, Morris terminated Shoulders’ employment.
I trust we will learn about tithe money being returned at least to the plaintiffs. They should indeed be righteously infuriated about the wasted opportunities in missions and deceit of senior pastor Morris and Gateway Church, particularly after hearing Morris repeatedly assuring his listeners of Gateway’s
commitment to tithers.
If substantiated, no surprise and to be expected within any religious business model. Missions, welfare work & community services, have history of being utilised to promote/advertise “respectability” which in turn encourages financial giving or upping the ante with giving. Better than compound interest. Whatever the reasoning and motive, its deceptive & unethical 🤔
PS Knew of a church that had funds donated for a specific welfare community project that never eventuated due to unforeseen staffing shortfalls not related to mismanagement or poor ethics. Funds were then returned asap with a transparent explanation and genuine thank you. Thats what you call righteous behaviour which honours Christ.
They should also look at Gateway planted churches such as Mercy Culture.
I’ve never heard RM give a money back guarantee if you don’t like the way the church uses the money. His money back guarantee comes out of his teaching on giving the tithe and being blessed in return. The return on the promise can’t be quantified and is subjective. That’s why he could make such a ridiculous guarantee! Good luck with that one!
He absolutely has said this. It’s on video. Look further.
Honestly, I am tired of reading about these churches which bring in exorbitant amounts of money who then don’t follow through with their promises (if that’s what the facts reveal) to support missions. It is not the “Church” Jesus founded through the Apostles (who took up collections to help others…no capital campaigns needed). Every church, no matter the size, should have enough to cover staff, certain programs and a decent (not exorbitant) reserve for infrastructure maintenance and little else after that. All else should go to legitimate missions. Look what Gateway has caused their members to do? Drag them into the secular courts. Does 1 Cor. 6 not mean anything anymore? Vss.1-8 “When any of you has a grievance against another, aren’t you ashamed to bring the matter to be settled before a pagan court instead of before the church?” Is Gateway part of the ECFA? Do the elders of these cash cows not understand the world is ready to pounce on ALL of us…all due to the love of money? If the Gospel isn’t being preached, it certainly appears that money is. I once worshipped in a small congregation which, unbelievably, brought in almost $30K a year from about 40 members. Every dime went to a mission we supported in the Ukraine or to the occasional special need among our members. It’s time the Church went back to that model. The Gospel isn’t for sale.
There are a few issues here. I’m not sure how Gateway handled their money, but most churches do not pay missions from tithe money. Typically, churches will separate missions giving and regular tithe. Perhaps Gateway did not do this, which might be why they are in trouble. Normally, tithe money is meant to care for the building, pay salaries, and fund local ministry.
This is not correct. Tithe money can be used for anything the church deems necessary. If funds are given with specific conditions, such as somebody donates $500 to send a kid to camp, those funds are required to be used for those purposes. Tithe and offerings can be used for anything.
In the light of what their former pastor Robert Morris did to that girl years ago I can honestly say that I am not surprised. Immorality and financial corruption go hand in hand!
Many churches have annual congregational meetings, where a financial report is given out to members. That report includes money taken in during the past year, and where it was spent. Beware of any church that does not disclose such information to its members.
It’s sickening to learn how these tv ministries and large churches are so corrupt. When I think of all the people who could be helped, of all the good they could do, and yet they hoard their cash and hoard their possessions, cars, boats, planes…it’s ridiculous. It’s scary when God deals with us, but it’s even scarier when he stops dealing with us because he’s washed his hands of us.
If I were these greedy crooks, I’d be so scared I’d be shaking. Read what God says:
Hebrews 12: 6 For whom the Lord loveth he chasteneth, and scourgeth every son whom he receiveth.
7 If ye endure chastening, God dealeth with you as with sons; for what son is he whom the father chasteneth not?
8 But if ye be without chastisement, whereof all are partakers, then are ye bastards, and not sons.
You give from the heart…God does the rest.
Sometimes it’s not just the individual leader who is corrupt but the system that supports and enables the corrupt leader.
Often a corrupt leader/founder actively or passively creates a corrupt system in his own image.
Or an already-corrupt system corrupts its new leader.
“It’s not that Power Corrupts but that Power attracts the already-corrupt and the easily-corrupted.”
— Frank Herbert, author of Dune
I support Ms. Leach and Mr. Shoulders. I believe they have a legitimate complaint.
Can we step this up to discovery? Why the judge isn’t allowing discovery, I don’t understand. It should not take a year to get basic facts. Denials by the defendants are fine for the media but have no value in court. It’s time for depositions of the accountants, and opening the books to forensic accountants.
We had the case reported on this site of another Texas outfit, Daystar, where the owner, Joni Lamb, calls her company a church, and was accused of using donor funds to finance a $100,000 honeymoon. She returned the money after TRR reported the story, and that settled it.
I hope this RICO legal vector works, but it’s often a bit gimmicky in civil cases, and often overcharging in criminal cases. In any event, I agree it’s basically a racket they are running if they are embezzling donor funds, and the idea that people are going to hell because money for missions was stolen by the church is horrific.
Julie was on a podcast not too many weeks ago, where she interviewed the producer of the documentary, The Religion Business. He shared that it was brought to their attention that an American church had raised something like $450,000 for orphans in Africa, but the church in Africa never received it. That is outrageous! The crazy part is nobody like Ms. Leach or Mr. Shoulders are rising up to do something about it.
Finally, it never ceases to astound me how these senior church-going folks developed the mindset that the closer they get to death and the judgment seat of Christ, the more they steal and hoard.
“Can we step this up to discovery? Why the judge isn’t allowing discovery, I don’t understand. It should not take a year to get basic facts.”
This is the CHRISTIAN Red State of Texas and Dallas MegaPastor-Superapostles have the best lawyers money can buy and Friends in High Places. They’d be fools to NOT have judges and DAs pre-groomed and already in their pockets. “Touch Not Mine Anointed”, remember.
That said, RICO is always a VERY serious business and VERY serious charge.
Pastor for 35 yrs, former cpa, not a lawyer. In nonprofit accounting you run designated fund balances for monies received for a specific purpose less monies expended equals monies yet to be dispersed, the fund balance. To say you give 15% doesn’t mean at times you won’t be behind. you can still have a fund balance of not yet spent in case emergencies divert current funds (say a building fire, tornado, your sr pastor has a thing for underage girls). While no fan of the preacher or many of alleged actions by church, Think this might be a DA or AG grandstanding for next higher job.
Makes sense, many churches today act like organized crime.