Members may need to react to church embezzlement

Churches are not exempt from embezzlement or financial fraud. The “world’s largest megachurch” in Korea recently uncovered $12 million in fraud. The Center for the Study of Global Christianity estimates there will be $39 billion in church financial fraud during 2014. That is more than the $35 billion spent on foreign mission work!

If embezzlement happens to your church, remember that it may be important for members to act, independently of church officers.

Here’s why: when embezzlement happens, it is frequently accompanied by mistakes by leaders. But more than once, I have seen insurance companies tell a church that the leaders cannot make a claim for their own mistakes. The churches had paid their premiums to cover directors and officers, only to be denied coverage!

In those cases, the law usually allows members to make a claim — but leaders may not be able to cooperate in the claim. This is, obviously, a very sensitive issue. Church members are reluctant to act without the ‘okay’ of leadership. This lets insurers put churches in an unfair and difficult position.

It is important for church members to use an attorney who understands churches and polity, in order to recover without splitting or damaging the ministry of the church.

If your church congregation has experienced serious embezzlement, we would be happy to talk with you.