Something many Christians don’t recognize and often ignore today is that the Christian Church is infested with financial abuse and corruption. Most Christians see the overt and obvious forms of financial corruption in the lavish lifestyles of mega-church celebrity pastors and Prosperity Gospel teachers. Unfortunately, financial corruption in the Church is much more common than this, and it’s not as easy to recognize as the extravagant lifestyles of rich and famous televangelists. 

According to the Trinity Foundation, approximately $86 billion was estimated to be embezzled in the Christian Church in 2024, but that’s just based on what’s been caught and reported. Up to 95% of church fraud cases can go unreported, making the exact figure impossible to know, but also much larger than what’s been reported. 

What is church fraud?

Beyond embezzlement, there’s a laundry list of ways churches financially abuse and defraud their congregants, and they’re surprisingly common. So, what exactly is church fraud, and how do churches financially abuse their members? 

Church fraud refers to any deceptive or illegal financial activity within a church or ministry environment for financial gain or benefit. 

Church fraud is one form of financial corruption, and while all church fraud is financially corrupt, not all financial corruption is necessarily fraud. So, before we move on to the red flags of financial corruption in your church, it’s important to understand the many ways churches can financially abuse their donors, specifically through fraud. 

Here are some of the most common fraudulent practices of financially corrupt churches and ministries:

1. Embezzlement: misappropriating church funds, such as donations/”tithes”, by clergy, staff, or volunteers for personal use. For example, if money donated to the church’s “Benevolence Fund” for the poor is being taken by the pastor for personal use. 

2. Ponzi, Pyramid & Investment Schemes: 

   1. Promising high returns on investments to the church or through church-related programs

   2. Using new members' money to pay earlier investors 

   3. Exploiting twisted teachings about money, like “build up your treasure in heaven” 

   4. Prosperity Gospel teachings that promise blessings for church donations

   5. Launching church businesses that operate like MLMs, pyramid schemes.

3. Tax Evasion or Misuse of Tax-Exempt Status: Exploiting tax-exempt status by funneling church funds into personal accounts or for-profit ventures and businesses.

4. Fake Charities or Mission Funds: Raising funds with a stated purpose (new ministries, buildings, charities, or other projects), but using the money for a different, undisclosed purpose. 

5. Payroll Fraud: 

   1. Ghost Employees: Adding fake employees to the payroll or allowing church leaders or insiders to collect salaries for non-existent workers.

   2. Inflated Salaries: Overpaying clergy, staff, or related individuals with unjustifiably high salaries or bonuses, diverting church funds for personal gain. 

   3. Falsifying Hours Worked: Recording unworked hours or overtime for employees, often with the complicity of the employee, to siphon off extra funds.

   4. Misclassifying: Classifying paid staff as independent contractors to avoid payroll taxes, benefits, or labor law compliance, while funneling money inappropriately.

   5. Kickbacks: Schemes where church leaders receive illicit payments or benefits in exchange for contracts, services, or favors, sometimes under the guise of legitimate operations. (Ex: The church hires you with the understanding that a portion of your pay is returned to church leaders or redirected to personal accounts.) This one is surprisingly common in churches today, but it’s highly unethical and raises serious legal concerns as potentially fraudulent. 

6. Real Estate Scams: Exploiting the church’s tax-exempt privileges to manipulate property transactions for dishonest gain.

7. Money Laundering: Funneling “dirty money”, disguising it as anonymous donations to the church, issuing payments to fake services (i.e., shell companies) to transfer money back to the church leader or their associate(s), etc.     

Church fraud is the dark underbelly of the financial corruption that’s already infiltrated a church or ministry. If a church is committing fraud, financial corruption is already deeply embedded. So, in helping you recognize when a church is financially corrupt, I’ve compiled a list of 8 red flags to look for in your church or ministry. 

If you spot any of these red flags, it may be financially corrupt, but it may also be defrauding you. Before you invest in a church or ministry, check it carefully for these red flags of financial corruption.

Red Flag #1: A Costly Building 

The first and most obvious sign that your church is financially corrupt is a costly and lavish church building. There are a few reasons for this. 

First, a costly building indicates a lust or desire for material wealth, prominence, and aesthetic appeal (i.e., “the lust of the eyes” and “the pride of life’). 

To put the church’s material wealth above helping the poor or spreading the Gospel is to show its vanity and its love of money. If your church’s building is large and impressive, that’s where most of the church’s donations are going. Not to feed the poor, spread the Gospel, or help those struggling in the church, but for the financial wealth and aesthetic appeal of the institution of the church, and by extension, its leaders.  

While greedy church leaders often guilt Christians into donating more by preaching, “Where your heart is, there your treasure is also,” when they have a costly building behind them, they put their hypocrisy on elaborate display. Expensive facilities contradict this teaching and make it financially impossible to achieve. If the church’s money is going toward a building at the cost of much more important things, then the heart of the church leaders is in material wealth, not the invisible Kingdom of God.  

Second, an expensive building often leads to pressure on church members to fund it, which often means unbiblical, unethical, and sometimes fraudulent fundraising tactics. When the priority is material wealth, the truth can take a backseat to financial success. 

A costly building could also be an indicator of the wealth of the church’s leaders. Sometimes, lavish buildings are tied to contracts for construction that might go to cronies, or funds being funneled into leaders’ pockets indirectly, possibly masking profiteering and fraud. 

If your church has a costly building, ask your pastor or elders why they spent church donations on its material presence, rather than on other, more important things like feeding the poor or spreading the Gospel. 

“Do you become a king because you are competing in cedar?

Did your father not eat and drink

And do justice and righteousness?

Then it was well for him.

He pled the cause of the afflicted and the poor,

Then it was well.

Is that not what it means to know Me?”

Declares the LORD.

“But your eyes and your heart

Are intent only upon your own dishonest gain,

And on shedding innocent blood,

And on practicing oppression and extortion.”  

- Jeremiah 22:15-17

“The God who made the world and everything that is in it, since He is Lord of heaven and earth, does not dwell in temples made by hands; nor is He served by human hands, as though He needed anything, since He Himself gives to all people life and breath and all things;”

- Acts 17:24-25

Signs of a Costly Building: 

• The church spends a significant majority of its donations on maintaining or paying for the building 

• The church property value is substantially higher than other church buildings in the same county

• Lavish and extravagant facilities with over-the-top and unnecessary features such as jungle gyms or church businesses (i.e., cafe, coffee shop, bookstore, merchandise, etc.)

How to Check Your Church: This is the easiest financial red flag to check your church for. Observe the size and aesthetics of the church building and other properties and facilities owned by the church. A costly building is fairly obvious, but if you want to dig deeper and get a better idea of how much your church is spending on the building, you can find out the property value of the church’s buildings and other properties they own by going to the county’s property assessor website and looking up the church’s address.

Red Flag #2: A Costly Pastor

A costly pastor is another red flag of financial corruption in your church. This could be a pastor who wears expensive clothing, drives an expensive car, lives in an expensive house, takes expensive vacations, and overall lives an expensive life. 

Don’t get me wrong here. I’m not saying wealthy pastors are necessarily financially corrupt, but if they’re wealthy and there’s no explanation for their wealth besides church donations, it’s time to ask questions. 

It’s important to recognize that a wealthy pastor isn’t necessarily a costly pastor. Wealth indicates how much money someone has, but cost indicates how much they spend. If a congregation is sacrificially donating to spread the Gospel and feed the poor, but that money is going toward a costly building and a wealthy pastor, it’s likely the church leaders are mishandling donations, are financially corrupt, and using donations to enrich themselves. 

If the pastor is costly, this is a red flag that they’re profiting disproportionately off the church. If their salary is costly, then so is their lifestyle, and a costly pastor is using Christ and the Gospel for financial gain at the expense of His people. 

“No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”

- Matthew 6:24

“And in their greed they will exploit you with false words. Their condemnation from long ago is not idle, and their destruction is not asleep.”

- 2 Peter 2:3

“But Judas Iscariot, one of His disciples, the one who intended to betray Him, said, “Why was this perfume not sold for three hundred denarii and the proceeds given to poor people?” Now he said this, not because he cared about the poor, but because he was a thief, and as he kept the money box, he used to steal from what was put into it.”

- John 12:4-6

“Woe to you, scribes and Pharisees, hypocrites! For you clean the outside of the cup and the plate, but inside they are full of greed and self-indulgence.”

- Matthew 23:25

Signs of a Costly Pastor: 

• The pastor wears expensive designer clothing brands and accessories (watches, jewelry, shoes, etc.), has multiple or expensive vehicles, lives in an expensive home, and/or goes on expensive vacations

• Pastor mentions or can be seen buying expensive services or products

• The church isn’t transparent about the pastor’s salary

How to Check Your Church: This one can require a bit of investigation, but it can also be fairly easy to check if you know what to look for. The fashion culture of the Christian church has shifted over the past few decades. Wealthy pastors used to wear expensive suits and ties to church on Sunday, and the modest pastors wore cheap, grungy, faded jeans, plaid shirts, and well-worn tennis shoes. 

Today, this casual style has become fashionable, and a pastor’s “Sunday best” can include faded, torn jeans, hoodies, and tennis shoes, each costing hundreds if not thousands of dollars. Preachers ‘n Sneakers has been exposing greedy pastors for their expensive, but casual-looking swag for years, but you can also check your pastor by paying attention to the clothing brands they wear. You can even use Google Lens to look up a pastor’s clothing to see if those faded jeans that look cheap and grungy are actually expensive designer jeans.  

Red Flag #3: The Prosperity Gospel

The prosperity gospel is a deceptive, unbiblical, and financially abusive teaching that promises financial blessings, health, or divine favor for donations to the church. 

This doctrine often exploits vulnerable people, especially those in poverty or desperate circumstances, by pressuring them to give beyond their means with promises of supernatural returns. It turns charity into a transaction, contradicting the biblical call for voluntary, joyful generosity, but it’s also an outright scam.

The Bible warns against these manipulative and deceptive teachings, and the financial corruption that leads to them: 

“Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”

— 2 Corinthians 9:7

“Her leaders judge for a bribe, her priests teach for a price, and her prophets tell fortunes for money. Yet they lean on the Lord and say, ‘Is not the Lord among us?’”

— Micah 3:11

Prosperity Gospel teachings often go hand in hand with fraudulent practices, such as promising “seed offerings” that will “unlock God’s blessings” while the church leaders pocket the money they call for in Jesus’ name. This not only exploits believers but also turns the Gospel into a get-rich-quick scheme.

Signs of the Prosperity Gospel:

• Sermons claim that giving more to the church will bring financial breakthroughs or divine favor.

• Leaders suggest that withholding donations will lead to curses, spiritual lack, or the removal of God’s provision and protection. 

• Pressures to give, even when members are struggling financially, are misrepresented as a test of faith.

  
  

How to Check Your Church: Pay close attention to sermons or discussions about giving. Do leaders emphasize freewill, cheerful giving, or do they suggest donations will bring blessings? Ask your pastor to explain their stance on tithing or giving and how it aligns with scripture. If they promote prosperity teachings or guilt members into donating beyond their means to receive God’s provision or protection, it’s a red flag of financial corruption and exploitation through prosperity gospel teachings. 

Red Flag #4: False Teachings on Tithing

Many churches falsely teach that Christians are biblically required to give 10% of their income to the local church, twisting the Old Testament tithe for dishonest financial gain. The biblical tithe was agricultural (crops and livestock), given to support the Levites and the poor, not a monetary mandate for Christian churches. False tithing teachings are often used to guilt or coerce members into giving, enriching leaders at the expense of the congregation. 

If you notice false teachings on tithing in your church, test them by politely confronting them with the truth. If they insist on preaching lies despite your confrontation, they are knowingly defrauding the congregation.

“In their greed they will exploit you with false words. Their condemnation from long ago is not idle, and their destruction is not asleep.”

— 2 Peter 2:3

Signs of False Teachings on Tithing:

• Leaders claim that tithing 10% is a mandatory Christian duty to avoid God’s displeasure or to be faithful/obedient.

• Sermons quote Old Testament references to tithes from the Mosaic Law or Old Testament prophets and falsely apply them to modern-day Christians as a minimum standard of donating to local churches.

• Tithing is tied to church membership or spiritual approval, coercing donations, rather than allowing them to be voluntary and cheerful.

  
  

How to Check Your Church: Research the biblical tithe (Read: What is Tithing?) and compare it to your church’s teachings. Ask leaders to provide scriptural justification for their tithing doctrine, if they have one. If they rely on guilt, fear, or misrepresentation of scripture, it’s a sign of financial manipulation and another form of church fraud. A healthy church teaches giving as a voluntary act of generosity, not a legalistic obligation or an act of obedience.

Red Flag #5: Financial Secrecy

A church that refuses to disclose its financial records, such as budgets, expenditures, or salaries, is literally hiding its financial dealings from you. Financial secrecy often enables church fraud through things like embezzlement, payroll fraud, or misuse of the church’s tax-exempt status. 

Several years ago, I wrote a post on How to Check Your Church for Financial Transparency, and it’s just as important for Christians to learn today. Transparency is essential for a church to have financial integrity and accountability from the Body of Christ. The first churches modeled openness in handling resources and radical benevolence in how they distributed church funds.

“There were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.”

— Acts 4:34-35

Signs of Financial Secrecy:

• Leaders refuse to share detailed budgets or detailed financial reports with members or prospective members.

• Donations are collected without clear explanations or details on how they’re used.

• Questions about finances are met with defensiveness, vague answers, non-answers, or accusations of mistrust or a lack of faith. 

  
  

How to Check Your Church: Request a detailed financial report, including how donations are allocated, staff salaries (including the pastor’s), and church expenditures. A church that isn’t financially corrupt will provide clear, accessible answers, often publishing annual reports publicly to show exactly where every dollar goes. If leaders deflect, provide only vague summaries (e.g., a generic pie chart), or discourage and deflect questions, it’s a major red flag. This kind of financial secrecy is a sure sign of potential fraud or misuse of church funds.

Red Flag #6: Money Covenants (The Tithe Kickback)

Some churches are so financially corrupt that they’ll even pressure members into signing “covenants” or contracts that require church members to donate to the church, often with hidden benefits for leaders and their associates. 

This kind of financial coercion by itself is exploitative and a red flag of corruption, but it’s also a red flag of fraud. Sometimes this kind of mandated giving involves schemes that include “tithe kickbacks,” where leaders receive illicit payments or exploit vulnerable members, like the elderly, by positioning the church as a beneficiary of their estates.

These practices are unethical, financially exploitative, and, depending on the details, can be criminal as well. 

“Woe to you, scribes and Pharisees, hypocrites! For you clean the outside of the cup and the plate, but inside they are full of greed and self-indulgence.”

— Matthew 23:25

“Suppose a brother or a sister is without clothes and daily food. If one of you says to them, ‘Go in peace; keep warm and well fed,’ but does nothing about their physical needs, what good is it?”

— James 2:15-16

Signs of Money Covenants/Contracts:

• Members are pressured to sign agreements pledging regular donations or tithing to the church.

• Leaders benefit from “kickbacks” or redirect funds to personal accounts or cronies.

• The church manipulates vulnerable members, like the elderly, to include the church in their wills.

  
  

How to Check Your Church: If your church requires a financial covenant or tithing pledge, request a copy and review it carefully with a trusted attorney (seriously). Ask who benefits from these agreements and how funds are distributed. Investigate whether the church targets vulnerable elderly members for estate planning. If leaders pressure you to sign donor agreements without complete transparency, it’s a clear sign of financial corruption and exploitation. 

Red Flag #7: Moneychangers

Churches that turn spiritual guidance into a profit-driven enterprise, complete with a strip mall of bookstores, cafes, conferences, or merchandise in the church lobby, are mirroring the moneychangers Jesus drove from the temple. These church businesses exploit members’ faith and often charge high prices for “spiritual” goods or services to make “merchandise” of God’s people. Such practices turn the church into a marketplace, not a house of prayer. Jesus exposed and confronted this behavior aggressively.

“And Jesus entered the temple and drove out all who sold and bought in the temple, and he overturned the tables of the money-changers and the seats of those who sold pigeons. He said to them, ‘It is written, My house shall be called a house of prayer, but you make it a den of robbers.’”

— Matthew 21:12-13

“And as he taught them, he said, ‘Is it not written: “My house will be called a house of prayer for all nations”? But you have made it a den of robbers.’”

— Mark 11:17

“The Passover of the Jews was near, and Jesus went up to Jerusalem. And within the temple grounds He found those who were selling oxen, sheep, and doves, and the money changers seated at their tables. And He made a whip of cords, and drove them all out of the temple area, with the sheep and the oxen; and He poured out the coins of the money changers and overturned their tables; and to those who were selling the doves He said, “Take these things away from here; stop making My Father’s house a place of business!”

— John 2:13-16

Signs of Moneychangers in Your Church:

• Church bookstores, online shops, coffee shops, or other businesses that charge money for goods and services under the umbrella of the church. 

• Expensive conferences, retreats, or events are pressured and portrayed as important for spiritual growth.

• Pastors earn money on the side by training young pastors on how to “build a successful” church or make money for the Kingdom of God. 

• Leaders profit from selling “spiritual” products or services (e.g., speeches, seminars, conferences, etc.), exploiting members’ faith to profit financially from the preaching of the Gospel and teaching the Bible.

  
  

How to Check Your Church: Examine the church’s businesses, events, and/or merchandise. Do they seem designed to earn money for their leaders? Ask how profits from bookstores, cafes, or conferences are used, and where the funds to launch them came from. Are they using church donations to launch businesses and charging church donors for products and services their donations already paid for? If the church feels like a commercial enterprise and your donations are being used to charge you for goods and services from the church, they’re likely exploiting your faith for their financial gain.

Red Flag #8: Dubious LLC Practices

Financially corrupt church leaders sometimes exploit Limited Liability Companies (LLCs) in ways that blur the lines between church funds and personal gain, evade taxes, hide assets, or funnel donations into private ventures. While LLCs can be legitimate for certain church-related activities, when church leaders own LLCs that contract with the church at inflated rates or transfer church property to personal LLCs, this is a clear sign of financial corruption. 

This use of LLCs can also mask embezzlement, real estate scams, or money laundering under the guise of "ministry expansion" or "asset protection," exploiting the church's tax-exempt status for dishonest profit.

The Bible condemns using positions of trust for hidden financial schemes and calls for integrity in our financial dealings with each other.

“One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much. If then you have not been faithful in the unrighteous wealth, who will entrust to you the true riches?”

— Luke 16:10-11

“Woe to those who scheme iniquity, who work out evil on their beds! When morning comes, they do it, for it is in the power of their hands. They covet fields and then seize them, and houses, and take them away. They rob a man and his house, a man and his inheritance.”

— Micah 2:1-2

Signs of Dubious LLC Practices:

• Church funds are routed through LLCs owned by leaders, family members, or close associates for services like consulting, property management, or media production at above-market rates, or other unclear or possibly even illegitimate purposes.

• Unexplained transfers of church assets (e.g., real estate, vehicles, or intellectual property) to LLCs not fully controlled by the church.

• Lack of transparency about LLC affiliations, with leaders deflecting questions about business entities tied to the church.

• Creating multiple LLCs to divide and hide assets by creating LLCs in quick succession or as needed. This prevents you from seeing their total portfolio value.

• Using shell LLCs with fabricated operational details: creating LLCs that appear independent but are controlled by the church, with fake or out-of-state addresses where no actual business occurs. This can obscure the true scale of investments or assets.

• Transferring church assets to new or separate entities before legal threats: Reclassifying or moving funds, real estate, or other assets into LLCs, trusts, or foundations shortly before bankruptcy filings or lawsuits to exclude them from asset calculations to limit victim payouts in cases like clergy abuse settlements. 

• Incorporating church sub-ministries as independent entities and separate LLCs or corporations from the main church body, allowing leaders to downplay total asset values during financial disclosures or legal proceedings.

  
  

How to Check Your Church: Request detailed financial disclosures about any LLCs associated with the church or its leaders, including ownership details, contracts, and transaction records. Use public resources like state business registries (e.g., search for the church or leaders' names on sites like the Secretary of State's business search portal) to uncover LLCs linked to the church, its leaders, or the family members of its leaders. 

Ask for explanations of any LLC-related expenditures in financial reports. If leaders are evasive, provide incomplete information, or if LLCs appear to benefit individuals over the congregation, it's a strong indicator of financial corruption and potential fraud. If LLC shenanigans are afoot, you might even want to consult a financial advisor or attorney familiar with nonprofit and LLC regulations in your state to investigate and discern whether your church leaders are exploiting LLCs for fraudulent or unlawful purposes. 

Final Thoughts

Financial corruption in churches is pervasive today, especially in America. It’s always cloaked in spiritual and biblical rhetoric that manipulates trusting Christians, but it’s a devastating reality that Christians ignore at their own expense. 

These red flags expose churches more concerned with money than the Gospel, and potential fraud practices as well, so study them, use them, and share them with every church-going Christian you know. And remember: your money is yours to steward, not your church’s. By recognizing these red flags, you can protect yourself and others from financial exploitation and hold churches accountable. 

If your church exhibits these signs, take action: ask tough questions and set boundaries. If the corruption persists, consider walking away to stop feeding the wolves or warning others by blowing the whistle. Share anonymously or openly in the comments below. Together, we can stop feeding wolves in sheep’s clothing and build Christian communities that reflect the Gospel of Christ, rather than a shameless love of money that corrupts and defrauds God’s people.

For more tools to help you check your church for red flags of abuse, corruption, and cultic control, read our other posts in this series on cultic control, abuse, cult isolation, and church exploitation. 

Have you seen these red flags at a church or ministry? Share your experiences in the comments!