A church wealth management company has been under investigation by US authorities over allegations it manipulated its financial statements to avoid reporting income for hundreds of millions of dollars in profit, according to the Wall Street Journal.
The investigation, by the US Securities and Exchange Commission (SEC), was opened in March after US law enforcement authorities learned that the investment fund had a “substantial number” of employees and had made millions of fraudulent claims.
The SEC has also launched an investigation into the accounting and financial statements of the St. Peter’s Foundation, which the paper says is an affiliate of the Catholic Church.
The paper says the investigation comes as the Church faces pressure from lawmakers to reform its accounting practices, which are often criticized as misleading and sometimes even deceptive.
The company is the subject of a separate US investigation by the FBI and the US Department of Justice, which is also investigating the accounting firm for fraud.
The report says that the St Peter’s Fund is owned by a trust overseen by the Rev. Thomas C. Sullins, who served as president of the Pontifical Council for Justice and Peace until he stepped down in 2014.
In a statement to Recode, a spokesperson for the St Peters Foundation said the foundation had no comment on the investigation.
“The St. Peters Foundation is proud to serve the Catholic community in Washington, DC and is deeply grateful to the US government and law enforcement agencies for their diligence in this matter,” the statement said.
The church’s statement says the probe is part of a broader effort to strengthen the church’s accounting practices to prevent fraud and to protect the trust’s assets.
The allegations against the church were first reported by the New York Times on Friday.
The newspaper quoted a former St. Pauls administrator, James G. Cogan, as saying that he resigned after he learned of the investigation from the St Joseph’s Foundation.
He said he has also spoken to church officials about the matter, but that they have been “very cooperative.”
The St. Joseph’s Trust, which oversees the St Pauls Foundation, is led by Bishop Thomas J. Moseley, a former Catholic Church official who also served as the bishop of Washington, D.C., from 2003 to 2005.
The St Josephs Foundation was founded by the archbishop of Washington and St. Mary’s College, the university where Cogan taught until his retirement.
In 2014, the church also became a beneficiary of the $9.5 billion sale of the former United States Army post in Alaska to private investors.
Covington and Moseleys foundation has provided nearly $200 million to Catholic charities and faith-based organizations since 2005.
In addition to the St Pete’s Foundation’s work with the St Mary’s Foundation and the St Matthew’s Episcopal Church, the St Catherine’s Fund and the Saint Joseph’s Hospital, the Catholic church has given money to groups including the International Rescue Committee, the United Nations, the Salvation Army, and the World Health Organization.
The New York Post reported that the Catholic bishops of the U.S. and Canada have asked the US Congress to investigate the alleged fraud.
“While the allegations are not yet public, the US Senate Judiciary Committee has asked the SEC to investigate St Peter and St Joseph as well as the Catholic Diocese of San Francisco, which was previously investigated by the Senate Committee on Finance,” the newspaper reported.
“We urge Congress to hold the Vatican and the Catholic diocese accountable for their roles in this scandal.”
The Wall Street Times reports that the church and St Peter are cooperating with the investigation and are offering financial incentives to any employees or people who report suspicious transactions.
“They are working closely with the IRS, and they are cooperating fully with the congressional committees and others that are investigating this matter and with the US Attorney’s office,” the church said in a statement.
“No employees or other persons should ever have to feel that they are the victims of a fraud.”