Fraud lawsuit is reborn

A federal lawsuit accusing the church of fraud has taken on new life.

Attorneys for North Carolina resident Laura Gaddy, a former Latter-day Saint, refiled a second amended complaint in the matter Oct. 22, essentially updating her case against the church in U.S. District Court in Utah after a judge allowed the move earlier this year.

Gaddy and two co-plaintiffs, Lyle D. Small and Leanne R. Harris, accuse church leaders through the years of concealing key aspects of Mormonism’s origins and the character of founder Joseph Smith as part of defrauding “hundreds of thousands” of now ex-members of their tithing.

Judge Robert Shelby rejected portions of an earlier version of the case, ruling that some of Gaddy’s allegations sought to delve into matters of faith shielded by the U.S. Constitution. But Shelby has also explicitly recognized that religious institutions are not legally immune to fraud claims and, on Oct. 15, he granted leave for this latest complaint to be filed.

Church lawyers have until Nov. 12 to respond, to be followed by countering briefs from Gaddy’s lawyers in early 2022.

In September, a separate federal judge tossed out a high-profile fraud lawsuit over tithing against the church brought by Californian James Huntsman. That case, too, is not over. Huntsman has filed to appeal the dismissal.