Feds Show New Willingness to Investigate Religious Fraud

For two straight days IRS investigators and postal inspectors have been carting away boxes of possible evidence of fraud from televangelist Benny Hinn’s headquarters in Grapevine, Texas.

Local Dallas media have pounced on the news story with reporters tweeting the latest sparse details.

Dallas Morning News: IRS investigators search televangelist Benny Hinn’s offices in Grapevine
WFAA: IRS raids televangelist Benny Hinn’s office in Grapevine

Here are five points worth thinking about regarding the Hinn story.

The IRS is showing a new willingness to investigate religious financial fraud.

The IRS and other federal agencies rarely investigated religious fraud during the Obama administration. In fact, the last time a televangelist was prosecuted by the IRS occurred during George W. Bush’s presidency. Mac Hammond’s case was  thrown out by the courts in November 2008 and the Obama administration failed to adopt new guidelines for church audits or to investigate numerous allegations of fraud uncovered by religious watchdog Trinity Foundation.

The investigation of Hinn could take years.

The most important religious fraud investigation conducted by the FBI and IRS during the Obama presidency resulted in the shutdown of Angel Food Ministries. On February 11, 2009, the FBI raided Angel Food Ministries in Monroe, Georgia.  An indictment of the food charity’s CEO was announced on December 2, 2011 — almost 34 months later.

Hinn will respond to the investigation by lawyering up.

We can expect Hinn to hire the best legal team money can buy. When Senator Grassley inquired into Hinn’s finances in 2007, Hinn responded by hiring two former heads of the IRS to defend him: Attorneys Fred Goldberg and Larry Gibbs. Goldberg is infamous for granting tax-exempt status to the Church of Scientology.

The case against Hinn will likely focus on allegations of tax evasion and mail fraud.

Although details of the search warrant have not yet been made public, IRS Special Agent Michael Moseley spoke to media gathered outside Hinn’s headquarters: “Primarily we investigate Title 26 which is tax evasion and general fraud against the government.”

The presence of postal inspectors during the raid indicates the U.S. Postal Service is looking for evidence of mail fraud. We can expect the inspectors to closely examine Hinn’s donor mail solicitations. As a historical note, televangelist Jim Bakker was convicted on eight counts of mail fraud among other charges.

Donations to Benny Hinn Ministries may have plummeted recently causing Hinn to pursue risky financial transactions to make up the gap in revenue and expenses.

After taking the reigns at Trinity Broadcasting Network, Matthew Crouch cancelled Hinn’s show on TBN, the world’s largest religious TV network. Donations may have plunged due to less TV exposure for Hinn.

Hinn is pursuing lucrative speaking engagements overseas and news media reported that Hinn was in France when the search warrant was served. Besides the U.S., Hinn is also scheduled to preach in the Ukraine, Mexico and Canada during the next 60 days.