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Religious Businesses: The Secret Investments of Mormons

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$100 billion mutual fund from faithful donations for charity

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Photo/Rick Bowmer

SALT LAKE CITY.More than $100 billion, which has been collected by believers for charity, has been hoarded by the Mormon Church, instead of being allocated to charitable purposes. “It was a secret fund. Once the money was collected, it was there forever,” said former Church investment adviser David Nielsen in an interview on CBS' 60 Minutes.

Nielsen had passed this information on to the US Federal Internal Revenue Service (IRS) in 2019 while he was managing the Mormon investment group, a position he held for nine years. Nielsen's report-complaint was published in 2019 in the Washington Post newspaper, after Nielsen's brother sent a copy of it to the paper's address. Nielsen, a devout member of the Church of Jesus Christ of Latter-day Saints, as the Christian sect calls itself, was recruited by the Mormon investment group thanks to his experience as a stockbroker on Wall Street. During his tenure at the Church's investment group, Nielsen says he observed the Mormon investment firm “disguising itself as a charity,” avoiding paying billions of dollars in taxes and resorting to forgery and misleading other Mormon believers.

< p>Each year, the Church collects about $7 billion from its 17 million members worldwide. Each believer must pay 10% of his income to it. About 1 billion of these funds were placed in a mutual fund of the investment company and invested normally, as if it were a speculative investment product. The profits of the mutual fund were, however, tax-free, as coming from a non-profit, charitable corporation, as the Mormon investment company had falsely declared.

The profits were tax-free, as coming from a non-profit, charitable corporation, according to former administrator Nielsen.

The hidden fund was created in 1997, and to date has grown to $100 billion, almost twice the total wealth of Harvard University. “I thought we were going to change the world. All we did was fill a bank account,” Nielsen said in an interview.

The evidence shows that a significant percentage of the Church's savings funds were used to support profit-making activities, including a shopping center in Sault Ste. Lake City, built on Church lands, as well as to establish an insurance company, owned by the sect.

Nielsen resigned in 2019 after a list of Church members involved in shell companies was published. These companies held billions of dollars in stocks and bonds, all controlled by the Mormon investment firm.

After resigning, Nielsen filed a 74-page complaint with the IRS, accusing the Mormon investment firm of violating its nonprofit status. Nielsen's complaint was forwarded to the SEC, which found that the Church had tried to hide the size of its investments through shell companies. In February, the Mormon Church paid a $5 million fine to the IRS. However, the Church rejected Nielsen's complaints. Christopher Waddell, the Church's executive in charge of its investment, real estate and philanthropic activities, called Nielsen's claims “absolutely false.”

Nielsen's interview on “60 Minutes” was his first public one. positioning for the case. “We gave the IRS and SEC a lot of time credit. What happened is very important and should not be erased with a small fine,” Nielsen said.

Experts, however, estimate that the chances of a thorough investigation by federal agencies are small. “The political risk is great. No one wants to lead an investigation into the finances of a religious denomination. On the other hand, federal leniency threatens the rule of law if agencies fail to enforce the law,” notes Phil Hackney, a former IRS official.

Source: www.kathimerini.com.cy

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