New details emerge in class-action lawsuit against Gateway Church
SOUTHLAKE — New developments have emerged in the class-action lawsuit filed against Southlake-based Gateway Church last week.
The lawsuit filed Friday demands Gateway refund donations, known as tithes, made by church members.
Lawyers in the class-action suit report significantly more Gateway members are now seeking refunds of their tithes.
"This case is about two things. It's about fraud and breach of contract," said Micha Dortch, lead legal counsel for the class-action suit. "To not let us see the books and to bring this new defense of 'it's not legal to return the money,' it's just absurd."
"Some of you have raised concerns about Gateway's financials and stewardship," Gateway Church elder Tra Willbanks said at a church service on Saturday.
In the sermon, Willbanks announced the church hired a new agency to look into its financial ethics — the Evangelical Council for Financial Accountability. Willbanks also claimed the church has audited its records for years.
"Gateway has had independently audited financial statements since 2005," he announced.
This comes on the heels of the class-action lawsuit being filed.
In the suit, a church member and CPA who worked with Gateway's global ministries sector claims only $3 million was given to global missions and ministries annually out of its $100 million yearly revenue. However, former lead pastor Robert Morris said 15%, or around $15 million, would go to global ministries.
"Despite claims, the results from the independent audits reveal that for the past 11 years, Gateway's global mission budget has averaged 20%," said Gateway spokesperson Lawrence Swicegood. "The lowest year was 17% and the highest year was 24%. Over the past 11 years, Gateway Church has given $171 million to mission efforts locally, regionally, nationally, and internationally. The first 10% of Gateway's missions budget is allocated to Jewish missions."
The CPA/whistleblower, who has now come forward as Allen Shoulders, also told The Roys Report newspaper that Gateway "did not conduct any audits during his time on staff — from 2011 to 2014. Instead, Gateway conducted financial reviews, which are not designed to detect errors or fraud."
Swicegood shared the following response:
"Gateway did in fact have and continues to have annual independent comprehensive financial audits – not reviews as claimed. Every year these audits did in fact include every department of Gateway Church, including Gateway Global Ministries. From 2005 to 2007, these audits were conducted by Guinn Smith & Co. Since 2008 and going forward, these comprehensive independent annual audits have been conducted by the firm Capin Crouse LLP."
Now, hundreds of additional members are seeking refunds of their tithes, which Morris repeatedly promised to any members who were unhappy with the tithes they gave to the church.
"If you are not fully satisfied at the end of that year, I will give you your money back," Morris said at a convention in 2023.
In a statement obtained from the lawsuit's legal counsel, Gateway's newly hired law firm, The Church Lawyers, wrote their response to the refunds:
"The Church's general position is that it is impermissible for the Church to refund or return donations. In short, once donations are made, they constitute a completed, unconditional gift to the Church and become the property of the Church. To give any private individual money or property of the Church, even if described as a 'return of donation,' would constitute inurement or private benefit in violation of federal law. Unlike a deposit in a bank, donated funds are not kept on account for the donor but, when received, immediately made part of other donated funds and used for the church's many charitable purposes. Refunds are not a charitable purpose."
"This case is about two things. It's about fraud and breach of contract," said Micha Dortch, lead legal counsel for the class-action suit. "To not let us see the books and to bring this new defense of 'it's not legal to return the money,' it's just absurd."
Former Gateway member Valentina Hensen hopes Gateway is more transparent.
"Know that this is not God's plan," Hensen said. "God is shining a light on Gateway Church right now, and he wants to clean it up, and so we as Christians need to stand up and make sure that that happens."
This class-action suit will now go before a federal judge, who will decide if the church is obligated to issue those refunds.
