Introduction to Allegations
Based on observations from former employees and volunteers, the following laws could have been broken and warrant investigation. These allegations represent a pattern of behavior observed over an extended period.
We submit that the members of Mr. Feucht's board have potentially failed in their fiduciary duty to exercise appropriate oversight and evaluation of Mr. Feucht's conduct. Furthermore, evidence indicates that Mr. Feucht has not responded adequately—or in good faith—to multiple concerns raised by employees and volunteers.
Note: Each allegation includes legal information (indicated by an icon) explaining the relevant laws and potential consequences. If you have experienced or witnessed similar issues, please use the form at the bottom of this page to share your experience.
Detailed Allegations
Reporting Fraud
Filing false statements on IRS forms, including Form 990, can lead to felony charges. Non-profits that knowingly file inaccurate information face penalties of up to $250,000 in fines and 3 years imprisonment for responsible parties.
Page one of 990s for Sean Feucht Ministries and Light a Candle falsely report that both ministries used zero volunteers. The Light a Candle 990s are incomplete. They fail to include Schedule J which discloses how Feucht's compensation is determined and Schedule R which would disclose that Sean Feucht Ministries, Light a Candle Project and Burn 24/7 are a related organizations. The compensation page for officers and highly paid employees (Part VII) also fails to report Feucht's compensation from related organizations.
Credit Card Fraud
Using organizational credit cards for personal expenses can constitute bank fraud, a federal offense. Additionally, this violates IRS regulations regarding private inurement (26 U.S.C. § 501(c)(3)).
Routinely observed Sean using business credit cards for personal expenses.
Donation Diversion
Redirecting donations intended for charitable purposes to personal use violates both wire fraud statutes and tax regulations. This is particularly serious when donation solicitations specify particular uses. Penalties can include civil liability for the diverted funds.
Redirecting donations to personal accounts or unauthorized ventures.
Example: Several individuals witnessing questionable diversion of donations to personal accounts, potentially houses, etc.
Payroll Fraud
Intentionally reporting inflated working hours or salaries on tax forms and payroll records constitutes fraud. For non-profits, this also violates regulations concerning reasonable compensation.
Inflating salaries or hours worked.
Example: Stories of the board convening quarterly for an hour but Sean reporting they each worked 10 hours/week.
Failure to Pay Prevailing Wage/Minimum Wage
Misclassifying employees as independent contractors to avoid wage requirements violates federal labor laws. Religious organizations are not exempt from FLSA minimum wage and overtime requirements.
Example: 1 employee (himself) listed on his 990 in 2020 + 36 independent contractors despite several working 40+ hours/week, etc.
Private Benefit/Inurement
Tax-exempt organizations must operate exclusively for exempt purposes, not for private benefit. Inurement occurs when net earnings benefit insiders (e.g., directors, officers). Penalties include revocation of tax-exempt status, excise taxes on disqualified persons (25% of excess benefit), and additional 200% tax if not corrected promptly. Directors who knowingly approve such transactions may also face penalties.
Benefit: A 501(c)(3) organization's activities should be directed toward some exempt purpose. Its activities should not serve the private interests, or private benefit, of any individual or organization- several seem to have observed this.
Inurement: A 501(c)(3) organization is prohibited from allowing its income or assets to benefit insiders – typically board members, officers, directors and important employees. Example: Some viewed him potentially using donations to invest in properties, etc.
Restricted Donor Fraud
Violating donor restrictions is both a state law violation and potentially federal wire fraud if solicited online. Nonprofits must honor donor restrictions on gifts and maintain proper accounting for restricted funds. Beyond criminal penalties, this can result in civil litigation from donors and regulatory action from state attorneys general.
Example 1: Sean regularly solicits donations like: "Click this donate button to send money directly to Iraq for x number of children…" yet only a percentage of donations are seemingly being given to what was advertised…
Example 2: Various individuals would receive donations for their specific prayer room's sound equipment upgrade, etc. and Sean would demand that they send the money to him and tell them that whenever they were ready to buy the equipment just to reach out to his staff. When it came time to purchase the new equipment with funds that individuals had earmarked for the equipment they were told they can't have the donations back and Sean pocketed it.
Embezzlement
Embezzlement involves the fraudulent appropriation of property by a person to whom it has been entrusted. For nonprofit leaders, this can include using donated funds for personal purposes. The intent to later return the money is not a valid defense against embezzlement charges.
Wrongful conversion of property or funds that were donated and converting that property or those funds to his or her own personal use. The act of embezzlement is complete the moment the official converts the money to his own use even though he then has the intent to restore it.
Example: Some observed him potentially using donations to invest in personal properties. Others witnessed Feucht occasionally writing himself a check for renting his own cabin in Montana for board meetings and also witnessed him pull cash out for short term teams to take abroad and then 1099 the trip leaders and make them pay taxes on funds that were distributed for a trip, etc.
Record-Keeping
Tax-exempt organizations must maintain detailed records to substantiate income, expenses, and activities. Failure to maintain adequate records can result in loss of tax-exempt status, imposition of excise taxes, and personal liability for directors. The IRS requires records to be kept for at least 3 years, and longer (7 years) for certain types of transactions.
Example: Multiple employees observed a dearth of receipts in a decade + of Sean's non profit dealings.
Failure to Report Other Income
All income from whatever source derived must be reported to the IRS. This includes cash, merchandise sales, and other revenue sources. Even non-willful underreporting can result in accuracy-related penalties of 20% of the underpaid tax.
Example: CDs, apparel, etc. paid in cash and unreported on taxes.
Report Your Experience with Financial Issues
If you have witnessed financial misconduct or have your own experiences with Sean Feucht's ministries that you would like to share, please use the form below. Your information will be kept confidential and will never be shared without your permission.