Introduction and Breaking News Overview

John Dehlin [00:00:02] Hello, everyone, and welcome to another edition of Mormon Stories podcast. I'm your host for today, John Dehlin. It is February 22, 2023, and we have a breaking news story. The Mormon Church, the Church of Jesus Christ of Latter Day Saints and Ensign Peak, which we will be discussing, have I guess agreed to some sort of settlement with the US Government, with the securities and Exchange Commission.

John Dehlin [00:00:27] Ensign Peak is going to pay $4 million and the Mormon Church is going to be paying $1 million to a $5 million settlement where the Mormon Church sort of acknowledges and has even apologized, it seems, in a very weak way for some call it fraud, some call it deception, but basically for trying to hide and mask its amount of stock investments through Ensign Peak and in sort of its massive holdings of now what looks like to be hundreds of billions of dollars in stocks and cash and real estate and assets, et cetera.

John Dehlin [00:01:04] And we've been talking in the past about the whistleblower David Nielsen, who used to work for Ensign Peak, and his role in bringing to light these infractions by Ensign Peak. We've talked about that in the past, but we've never really done is a thorough discussion of all of these issues. And now we've got this breaking news where the Mormon Church has admitted, in effect, wrongdoing, has been fined and has paid the fine. And so with us today, who is probably the top expert in the world that we could have to discuss this, not just because of his day job, but because he actually has a direct and maybe even I'd say personal relationship with, with Ensign Peak whistleblower David Nielsen. We have back on Mormon Stories podcast attorney Mark Pugsley. Hey, Mark.

Mark Pugsley [00:01:59] Hey, John.

John Dehlin [00:01:59] Welcome back to Mormon Stories.

Mark Pugsley [00:02:01] Thanks. It's gotten a lot more technical since I did it last time.

John Dehlin [00:02:05] Well, we're trying to up our game every day. So I've known Mark for many, many years. He's been on Mormon Stories podcast before. We'll have, we'll have Maven make sure to include in the show notes our past episode or episodes with Mark. We've definitely talked about Ponzi schemes and just the prevalence of fraud in Utah. That's kind of my understanding of Mark's expertise in Wheelhouse. I recently was listening to an amazing, amazing podcast, I think by the Wall Street Journal about Nikola, which is this fraud that happened in Utah about a electric battery powered truck company that was led by a Mormon that ended up billion dollar Ponzi scheme. And who shows up in the podcast speaking about it? None other than Mark Pugsley. So Mark you get around. But I'll let you introduce yourself, if you'd like.

Mark Pugsley's Background and Expertise

Mark Pugsley [00:03:00] Okay, sure. Happy to be back, John. And I'm happy to share some of my thoughts on this. I am a lawyer in Salt Lake City. I've been practicing law for 29 years now. In fact, I think, John, you and I are almost exactly the same age. I think we were, like a week apart, if I recall.

John Dehlin [00:03:22] I'm August 20th, 1969, and I. I'm.

Mark Pugsley [00:03:25] Oh, 69.

John Dehlin [00:03:26] Yeah.

Mark Pugsley [00:03:27] Oh, you're much younger. So, yeah, I'm August 18th, but I'm 66. So we're. We're.

John Dehlin [00:03:31] You're my brother's age.

Mark Pugsley [00:03:32] Okay.

John Dehlin [00:03:32] All right. You're my brother Joel's age. Yeah.

Mark Pugsley [00:03:34] So I'm much your senior. Anyway. I'm. So I've been. I started out. I went to law school back east at Duke University, graduated in 1994, and spent four years in Los Angeles at a multinational law firm practicing securities law. And then I moved back here to Salt Lake in 1998, I believe, and joined the law firm of Ray Quinnie and Ebiker, which is one of the largest firms in the state.

Mark Pugsley [00:04:03] I worked at Ray Quinney for 24 years. Hopefully, these are all adding up. So I was there for a long, long time as an associate, and then as a partner for a long time, head of the securities section in the firm. And then as.

Mark Pugsley [00:04:22] Let's see, last year, 2022, in January, I left that firm and started my own law firm. And the law firm is called Pugsley Wood llp. And we are. We have offices in Utah or Salt Lake City and Boston. So we're basically a national law firm, but we're very, very specialized in the specialty that we do is SEC whistleblower cases. So we're one of only, I think, basically two law firms in the whole country, if not the whole world, that specialize in just doing this very small niche practice, which is helping people file whistleblower cases with the sec.

Mark Pugsley [00:05:01] So that's. And that's what I've been doing for. Since about 2010, which is when the SEC whistleblower program started. So I decided back then, just as kind of a little background, the stuff that we talked about on our last podcast was about Ponzi schemes and also about kind of the prevalence of Ponzi schemes. And I've given lots of talks and speeches and podcasts on this issue and talk about it quite a bit to try to help people understand how to avoid getting caught up in an investment scam. And in A Ponzi scheme, which are very common in Utah for a whole bunch of reasons. And that's part of what we talked about last time.

Mark Pugsley [00:05:40] And I can talk about it more, but that's not really what we're doing today. So the point I was going to make is that the reason I started filing these whistleblower cases is that because we have so many in Utah, I was getting calls, and I was getting calls from victims who are caught up in a Ponzi scheme. In many cases, they. They couldn't get their money out. They were trying to figure out why the guy who they'd given, you know, $100,000 to wasn't returning their phone calls. And so they. They would call me up and they would tell me the story and the investment that they were in.

Mark Pugsley [00:06:15] And it was usually some. Some guy in their ward, almost. Almost always someone who had the church, family affiliation with. And so when the SEC set up its whistleblower program, I started filing those cases with the SEC to say, hey, look, there's something improper going on here. This is something you guys got to ought to look into.

Mark Pugsley [00:06:36] And so I just started filing them quite a bit. And it turned out I was filing them more than most people, I guess. I guess that's both a good and a bad thing. But over time, that just became more and more of my practice. And so I decided in 2022 to join up with my now law partner, Brian Wood, who's in Boston, to form this new firm that just is a very specialized boutique firm doing SEC whistleblower cases. And so we have filed some pretty significant cases. You mentioned Nikola, and I should just correct, John, that you said Nikola was a Ponzi scheme. And it's not.

John Dehlin [00:07:17] Right.

Mark Pugsley [00:07:18] It's just a company that started to create, you know, trucks, these trucks that carry freight and make electric ones. And it was created by a guy named Trevor Milton. We filed that case a few years ago, and the story is on the Bad Bets podcast that was produced by the Wall Street Journal, and we're hopefully going to make a movie about it one of these days. So they're working on that now. So it's kind of a fun case that I did, but I've done some other cases just that people may have heard of. One of them involved Washakie Renewable Energy. That was.

John Dehlin [00:07:56] Those are the Kingstons, right?

Mark Pugsley [00:07:57] The Kingston clan had a fuel processing plant up in Northern Salt Lake. So the whistleblowers in that case hired me to help them run that through the whole process. And then I've another case that people will have heard of involved a company called Vivint Smart Home.

Mark Pugsley [00:08:17] I filed a whistleblower case with multiple agencies a few years ago that resulted in FTC fines of $20 million against Vivint for improper sales practices. And the Department of Justice also fined them, I think $3.2 million. So basically, I help people file these cases, and then in many cases, they get an award. And so then I. I get paid through the award that's paid by the government agency. That's basically my practice now. So it's a very unusual practice, a very narrow niche practice. But unfortunately, in Utah, we have a lot of problems here with this. And so I end up getting calls. And we're always interested in taking on cases involving especially big public companies or Ponzi schemes, because those are the kind of cases that we like most.

Mark Pugsley [00:09:07] Oh, there's another one people may have heard of that was just written up in the Washington Post out of Las Vegas. Involved a company called J and J. Also a Ponzi scheme that was, man, you know, being run by some. Some folks in Las Vegas that was also primarily targeted towards members of the LDS Church. I think it's about a $400 million Ponzi scheme, and it resulted in some crazy stuff with the FBI, so people can look that up as well. Okay, cool.

John Dehlin [00:09:39] Well, that's a great intro. Super excited to have you here. Really grateful and I think, you know, we'll get into this. But I think in addition to all your massive experience, I know that when David Nielsen was first trying to figure out what to do, you and I, you know, I guess I found out that in some ways you had had some communication with David. So I don't think there's anybody else that would be able to talk, you know, whenever David's ready, that's going to be awesome. But no one else would be able to even know David's situation like you would.

Mark Pugsley [00:10:12] I. I can talk somewhat about it. I've talked with David. He knows I'm coming on today. And I will say that I'm going to not talk about his personal story, because that's really his story to tell. Yeah, he is a very good friend. He and his wife, we do things socially and we hang out quite a bit. They live in our neighborhood, so we see them all the time. And he's one of my favorite people. Also. I should say that for anyone who doubts David Nielsen and who he is, let me just say he's one of the smartest and most ethical, most honest people I've ever met.

Mark Pugsley [00:10:48] I mean, he is as honest as it comes and that's why he's a whistleblower. All of our clients come to us because they see something inappropriate or illegal going on and they can't do it. They don't want to participate in that. That's why they become whistleblowers. So David, that's exactly what happened. He was working for the church, he was working for Inside Peak for years, making very good money and he just felt like something was wrong about what he was hearing. And conversations that are detailed both in the filing that is in, that has come out in the press, but also another place to look is the affidavit that he filed in support of the my friend James Huntsman's lawsuit in California.

Mark Pugsley [00:11:34] David submitted an affidavit in support of that case that really gets into some great detail about conversations he had and why he just couldn't do it anymore. He's a great guy and I'm with, looking forward to the time when he's able to tell his story, when his, when his legal counsel lets him speak up.

John Dehlin [00:11:52] Beautiful. Okay, well, I do want to thank everyone who's joining us on the live stream. This is a super popular topic. We just received a super chat. Thanks for those who do donate through YouTube. That goes to help keep the lights on on the Mormon Stories podcast. Rock it out with Kim D. Hey Said, thank you for providing this information. Anyone who wants to send us a super chat, we're appreciate it. Also, we want to request that everybody who's joining us either on Facebook or YouTube please hit the subscribe button.

John Dehlin [00:12:27] Please follow us. That helps with the algorithms and it helps spread the word so that this episode gets seen by as many people. Also, if any of you want to post today's episode on social media and we'd love to get as big of a live audience as we can, but thanks for subscribing and thanks for the support. Okay, so Mark, where should we begin today? We've got an outline, but where, where should we begin? We've covered your background. So what's next?

Meeting Whistleblower David Nielsen

Mark Pugsley [00:12:56] Well, I, I mean, I guess I can talk about how I first met David and I'll tell it from my perspective.

John Dehlin [00:13:04] I'll say I met David once. I was at a cross country meet with my daughter Clara, who was running for Olympus High at the time. Oh really? And David walks up to me, he was working for Inside Peak at the time and he just said, hey, I, you know, hey John, I appreciate your podcast. And so hi David. We've met. And I also think you're super cool and courageous. So kudos to you all whistleblowers are courageous.

Mark Pugsley [00:13:27] And the thing that I just want to say first of all before I talk about this story is that being a whistleblower is hard as hell. It is very slow. It's very frustrating. The rewards can be significant, but you know, it's not a, it's not easy. And there are implications that all of my, or consequences that all of my whistleblowers suffer. But the good news is that the SEC whistleblower program in particular and the IRS program are pretty good about protecting confidentiality. David in this case has the, you know, he was kind of outed and the Washington Post, you know, published a story about this without his consent and without his cooperation. And so that's complicated his, his life in ways that most whistleblowers don't have to deal with. And it's really unfortunate.

John Dehlin [00:14:20] So that initial disclosure was not good for David.

Mark Pugsley [00:14:23] Well, I mean most of, most of our clients want to stay anonymous. They don't want to be out there.

John Dehlin [00:14:29] Yeah.

Mark Pugsley [00:14:29] And you know, this is a small town, John, you know, the story you just told is a good example. Right. You and I both know tons of people. We know the Parkinson's. We know, we, we, we have lots of friends in common. Well, it's a small, you know, they say small Lake City, you know, everybody kind of knows each other. Well. Well, it's not good in the, in the investment world to be outed like this, especially as someone who's blew the whistle on the, your former employer, the LDS Church. It's, it's because it's going to make it hard for him to have other investment funds. Aren't going to be that interested in hiring a guy like that for a whole bunch of different reasons that you can imagine. So it's not, it's not.

John Dehlin [00:15:08] I was just contacted today and I'm going to keep this confidential, but I was contacted today by someone who knows someone who works in a securities related field that does business with the LDS Church. And that person was literally told if you run up on any type of infraction related to the Mormon Church, either ignore it or give it to a superior. But better to ignore and forget it. Better because of the fear of what the church could do if, if you in any way reported them as, as. So that's just one example of the

Mark Pugsley [00:15:45] power in town that are the big funds. They manage church's money, the church's money. They, they don't Just it doesn't all being managed by Enzyme Peak. It's also being managed by outside managers that they farm it out and they. So, so these folks are all, you know, beholden in a big way. I mean, it's huge chunks of money. And the Church uses that power very carefully.

John Dehlin [00:16:06] Ivan. I even learned that there are a lot of law firms that I heard once that the Church literally does business with every possible law firm in the Valley that it can, so that as many law firms as possible will not be able to sort of meet the conflict of interest kind of, or just so that firms won't want to ever oppose the Church. I don't even know if there's something to that, but.

Mark Pugsley [00:16:26] Well, there's. There's a reason I'm not Dave Nielsen's lawyer. How about that?

John Dehlin [00:16:31] Yeah.

Mark Pugsley [00:16:33] So, I mean, I won't go into that, but. But it was. I would love to have represented him in this case. It's a fantastic case. So. But. But it is what it is.

John Dehlin [00:16:42] Yeah. Okay. So love to Dave Nielsen and respect

Mark Pugsley [00:16:46] to him and his counsel. He's got good counsel, Michael Sullivan in Georgia. And they have been working very carefully. We all belong to an organization called Taxpayers Against Fraud, which is the whistleblowing bar for the country. And I talked to them, and they're great folks.

Mark Pugsley [00:17:07] So I can just tell you quickly that a few years ago, I was contacted by. I got a phone call, a phone message. I was actually out of town. I was in Alaska with my dad, about to head into Denali national park, and I saw a message pop up on my voicemail. And it was a guy named Dave who wanted to chat with me.

Mark Pugsley [00:17:36] He was in a difficult situation. He had just resigned from Ensign Peak and wondered if I could chat. And I, you know, I don't. When I'm out of town, I don't usually take those kind of calls. But I immediately saw the significance of who he was and where he worked, because I'm very well aware of Ensign Peak because I work in the finance industry and represent investment advisors, or used to. So I called him back immediately and chatted. And he happened to be neighbors with another guy that I worked with and had been talking to him and saying there's some challenges and I need some help.

Mark Pugsley [00:18:16] And this partner of mine, law partner of mine, his wife suggested, well, you should call Mark Pugsley. He's just a few blocks away. And she knew that I had left the church, which I did some years ago, and thought I would be a safe person for him to chat with. But, you know, the point is, the thing about that is that, you know, folks like this aren't looking to make money. They're not looking to benefit and profit from this. He was just looking for some protection and safety because he was, you know, under threats and under. Not. Not physical threats, but legal threats by. By Ensign Peak.

Mark Pugsley [00:18:55] You know, they don't want people going around and talking about these secrets. I mean, you can. If there's one thing we can learn from all this is the church bent over backwards in every which way to keep this information out of the public eye. And so when they have someone like Dave leave, I'm sure they were freaking out internally trying to keep him from talking. And so he needed help, and so I chatted with him, and then we met later.

Mark Pugsley [00:19:22] And I can't talk about our communications because they're arguably privileged. Even though he's not my client. He was consulting with me in a legal way, but I. You know, after. You know, it was a. Let's just say it's a good coincidence that I happened to do a lot of whistleblower law, because that was something that he then began to explore. So that in the better. The better part of it, though, is that Dave and I have gotten to be great friends, and we. We hang out.

John Dehlin [00:19:51] He.

Mark Pugsley [00:19:51] He renovated a home in our neighborhood, and it's. It's just fabulous. He's a very talented guy, and so we. We play pool, and I beat him most of the time, although it depends on the night. Uh, so it's great. He's. He's a really good guy.

John Dehlin [00:20:04] Is his wife a great real estate agent?

Mark Pugsley [00:20:07] Yeah.

John Dehlin [00:20:10] Okay. I just heard that.

Mark Pugsley [00:20:12] Yeah. Yeah, she is.

John Dehlin [00:20:13] Okay. All right. So. Yeah. What's next in the story?

Mark Pugsley [00:20:18] Well, I mean. I mean, he found counsel ultimately and decided to file. When we're contacted in these cases, a lot of times people have information, but they don't really know what to do with it. And I suspect that that's kind of what was going on here. And so it's a very lengthy process that you go through with counsel in general to identify what are the agencies that would be interested in this information that you have.

John Dehlin [00:20:45] Right.

Mark Pugsley [00:20:46] Whistleblowers come to us all the time with stuff, and we say, well, you know, that's something the EPA might be interested in or the Department of Labor might be interested in or the FTC would be interested in. But unfortunately, those. Those agencies don't have whistleblower programs. So whistleblower programs are fantastic because not only do they pay awards to successful whistleblowers but they also give you protection, anti retaliation protections, very, very valuable. So if you become a whistleblower, you have some laws that come into place that prevent the company from coming after you. And then also they pay awards. And I can. Is it okay if I just explain a little bit about how that works?

Mark Pugsley [00:21:28] So the SEC program is the one I'm most familiar with. I also have cases pinning in a number of others. CFTC has a program for commodities. IRS has a whistleblower program. They're all a little different, but the SEC program in particular is a fantastic program. They've, I believe they've paid out since the inception of the program.

Mark Pugsley [00:21:50] I might get these numbers wrong, but it's about $1.7 billion in awards. I mean, it's a huge amount of money. And so they, but by paying those awards, they've attracted tips, massive tips that have led to huge fines and penalties that they collect. It's much greater than the number of awards they pay. So they're basically incentivizing people with information about fraud to come forward and blow the whistle. And the.

Mark Pugsley [00:22:20] So what happens is when people come to us, we talk to them generally about what's going on, what the situation is, what the information is, and then we figure out if there's a whistleblower program that would be applicable. And the reason for that is that that's how I get paid. I mean, I don't want to sound, you know, crass about it, but we love to help people file cases in agencies that don't pay awards. But if we did that all day, we would go bankrupt.

Mark Pugsley [00:22:49] So we mostly work with the sec, CFTC and IRS programs. I'll also say that these things take long time. You know, some, some cases take three to four or five years. IRS cases can take up to 10 years to go. So it's a long, difficult process. You file the claim.

Mark Pugsley [00:23:08] They, if they think it's valuable, they'll act on it. The SEC in 2022 received over 12,000 tips. So you can break that down at several hundred a week. And it's a tough process to get noticed and picked up and to have them take your case and file it. So we spend a lot of time screening cases and try to find good cases that we want to file. And some we don't. In fact, most we don't take. So what David did and what other whistleblowers did is they work with their lawyers to put together the claim, put together the information, file it, and then they wait for the regulators to Contact them.

Mark Pugsley [00:23:47] If the regulators collect fines and penalties, they then they will pay you a percentage of what they collect. So if hypothetically the SEC collects $100 million, then they would pay a whistleblower reward of between 10 and 30% of what they collect, by the way, not how much the fine is, but they have to actually get the money. So if people go bankrupt, it's not good.

Mark Pugsley [00:24:16] So you can do the Math. You know, $100 million case could potentially be a $30 million award. So very significant. We just, our firm just announced a 28 million dollar payment to one of our clients. So we have cases, but those are cases that have been going on for a long time. And, and that's kind of how we do it.

John Dehlin [00:24:35] Okay, cool. All right. So that's a good background of the whistleblower sort of provisions.

Mark Pugsley [00:24:42] Yeah, yeah, yeah. And so, so David, you know, presumably did that and he filed that with both the IRS and the sec.

History and Purpose of Ensign Peak Advisors

John Dehlin [00:24:52] Should we talk about maybe a little bit history of Ensign Peak? Who, what it is and why it was created, when it was created, who created it. To the extent. I'm kind of putting you on the spot here, but, but just vaguely, generally.

Mark Pugsley [00:25:06] And I will say that why the

John Dehlin [00:25:08] church would create an Ensign Peak. Yeah.

Mark Pugsley [00:25:10] Begin with so, so this, and this will come into play. And this is not, you know, most people in your audience probably are very well aware of the fact that the church has massive amounts of money. Where did they get that money? Well, you know, there was a time when the church struggled and they, you know, basically told everyone to pay tithing. They started making it a bigger deal, historically speaking. I'm not a historian, but I, you know, most people know that. And then as the church grew and the membership grew and the wealth of its members grew, its tithing revenues grew. And eventually, and I don't know, you know, I don't know the whole history of it, but eventually the tithing revenues, and I'll call them revenues, because it, I always thought the church is more of a corporation than a church, but the money that comes in from tithing was greater than what, what their operational costs were.

Mark Pugsley [00:26:02] And so they had a surplus. So they began to invest that surplus. And at some point and I, in the night, in the, I don't know exactly when it was formed. Do you, do you know offhand it

John Dehlin [00:26:14] was, oh, I want to say in the 90s. And I want to say somewhere in the 90s, I want to say he

Mark Pugsley [00:26:19] was residing in 1997, it created as an integrated auxiliary of the church to manage the church's investment. So at some point, you know, they filed this new or they created this entity to almost act like an in house investment advisor. They investment advisors are kind of like stockbrokers. They manage the money and then they recruited people who had a background in the financial industry to come run it, who are also active LDS people. They all had to be active LDS and have temple recommends. I mean they're church employees basically but they recruited and they pay them pretty well. I mean my understanding is that the Ensign people get paid much more than a typical church employee. And they have to do that because they have to recruit people from Wall street who are making, you know, gobs of money already. And if you want to get the right people, you have to pay them.

John Dehlin [00:27:11] But like with tech, probably not as much as you'd make at Apple or Microsoft.

Mark Pugsley [00:27:15] Sure, maybe not slightly below but enough to, I mean you can't pay them 80 grand and expect you to someone to leave Wall street unless they have a really strong testimony. But you're not going to get the best and the brightest that way. And so, so yeah, they recruited people and they have a number of people working there and they're from what I understand a few of them have had regulatory problems in the past and maybe that's why they left industry.

Mark Pugsley [00:27:42] At one point I did a search on a broker check website. It's the website run by the by FINRA to monitor who has licenses and who doesn't. And you'll find that the majority of the people that work in Ensign Peak may have been licensed in the past but are not currently licensed. And that to me is really interesting because you know, the church I think has been over backwards to try to keep everything that anti Peak does under wraps. They don't even announce the existence of the entity was not even known for years. So they don't want their folks to be license because that gives FINRA and the SEC the right to come in and do exams and other things like that. So licensure for an entity like this is real problematic. And so they've not done that.

John Dehlin [00:28:31] Okay.

Mark Pugsley [00:28:33] Which is ought to be a red flag. There's another, can I just say another thing John, for those in your audience who might understand the financial services industry or really any big industry, there's a role in most companies called compliance. And a compliance officer is someone who makes sure that everybody follows the rules. Well, one of the things that you will see in the, in David's 90 page filing with the finance committee and in his other filings Is that until.

Mark Pugsley [00:29:00] I don't. I think it was like 2005, Enzyme Peak did not have any compliance officers. Zero. None. And it was managing one of the largest portfolios in the world. And it had nobody internally to make sure that they followed the rules when eventually, with David's urging, they hired someone. They hired one person. And for a portfolio of this size, you know, this is massive. $100 billion is massive. And they should have had a whole team of people making sure that all the rules were being followed. And that maybe would have prevented the exact problem that they're facing now.

John Dehlin [00:29:38] Or not. Because as we're going to see, people tried to raise the red flag and looks like they were overwritten.

Mark Pugsley [00:29:44] Right, right. And. And as is true, if anyone has worked in the Church, they know that the. The First Presidency has a lot of control over pretty much everything the Church does. And Enzyme Peaks, no exception. They couldn't do anything without the First Presidency's approval. And you'll see that that is comes up over and over in the SEC settlement document.

John Dehlin [00:30:07] Yeah. Okay, so Ensign Peak was created to manage the Church's investments, surplus investments and assets. And I guess one thing maybe it's important to mention is that it's not just stock, from what I understand.

Mark Pugsley [00:30:24] Well, the Enzyme Pete doesn't manage the real estate. I mean, that's a whole nother hundred billion or however much that's worth. Nobody really knows.

John Dehlin [00:30:31] Okay.

Mark Pugsley [00:30:31] But it isn't just stock. It's going to be a lot of other types of investments that are managed through other people. They've got foreign. Lots of foreign companies that they invest in, lots of foreign accounts. So it is most. This Enzyme Pete mostly just focuses on different types of investments that are not physical.

John Dehlin [00:30:52] I just remember some of the spreadsheets that came out with the initial leak around David's case. Mentions cash mentioned, municipal bonds mentioned. Real estate, you know, all the tradable

Mark Pugsley [00:31:05] securities for the most part. Some private investments. I'm sure they invest in a lot of private companies, but not the $100 billion number. And whatever. We don't know what that number is today. Does not include all the. The malls and the, you know, the. The temples and all the real estate that the Church owns worldwide. Okay, Florida. Half of Florida.

John Dehlin [00:31:26] No, I think literally it's like, I know 2 to 4%, it's. Of the public.

Mark Pugsley [00:31:30] They're the largest private landholder in the state of Florida.

John Dehlin [00:31:33] Yeah.

Mark Pugsley [00:31:33] Like by a long shot.

John Dehlin [00:31:34] Yeah. So, okay, so Ensign Peak is created, and I guess, do we want to talk about. Once the Funds got too big. How they started trying to hide, you know, and avoid reporting and hide. Is this the time to maybe talk about kind of the. I know Tony Simmerad's article in the Salt Lake Tribune kind of lays that out pretty nicely. Or do we want to go to a different place first?

Understanding the SEC Enforcement Order

Mark Pugsley [00:32:03] Well, that's fine. The order, the SEC's order. Let me just say that in my. Before I really started this firm, I did a lot of SEC enforcement work. So I defended people that were sued by the sec. In, in some cases not. It was not my whole practice. It was a piece of my practice. And so I've negotiated orders like the SEC order that was issued. It just came out yesterday. And this is very unusual. This one is, is unusual on a lot of different ways. And we can talk about kind of, you know, how much the fine was, but this has a lot of detail in it that I'm not used to seeing in an SEC order. And so should we cover that? This is kind of unusual and it does go into that history.

John Dehlin [00:32:47] Okay.

Mark Pugsley [00:32:48] It might be a good way to kind of walk through it because. Because it kind of says what happened. Like, well, how did this happen? And it's. And can I say this other. One other caveat, John, that's really important.

Mark Pugsley [00:33:00] First of all, if people are wondering, the document we're talking about, if you Google SEC settlement with LDS Church, you just Google that, you will find the press release that was issued by the sec. That is not what we're talking about here. If you look at that page and those who are on computers now can look at that press release on the, in kind of small type, on the right hand side, there's a little blue link that says SEC order. That's the document you want to look at. It's. It's almost kind of hidden on the SEC's website, but you have to look at the order because that's where the rubber meets the road. And that's. This is a document. This is A, an 8, 8 page.

John Dehlin [00:33:42] 9 page.

Mark Pugsley [00:33:43] 9 page.

John Dehlin [00:33:44] And I just included it. I just pasted it to the comments for the live stream and we'll make sure Maven includes it in the show notes as well.

Mark Pugsley [00:33:52] And this is really the critical document. And I want, because I've negotiated these, I want people to understand something very important. This is not written just by the sec. This is a document that was a negotiated document with the church's lawyers and the SEC's lawyers together. Paul Feint, a friend of mine, works in the SEC office. He handled this case for the SEC here in Salt Lake. He's a good lawyer and he negotiated this. I know he's very careful. But if you look at the very first page of that order in section two, it says respondents, which is the LDS Church and Enzyme Peak respondents consent to the entry of this order instituting cease and desist proceedings pursuant to section 21C.

Mark Pugsley [00:34:41] So this is not something that they just made up out of whole cloth. The Church saw this and, and admitted it. And in the offer of settlement that you don't have access to, they don't publish those. In the offer of settlement that the Church made. Part of the language in there is that they cannot publish a press release that disputes this order. Cannot do it. And I have issue personally with the press release that the Church issued because I think it does in some ways dispute the findings in this order. It seems to me that that is a highly disingenuous press release. Self serving. You characterize it as a semi apology.

Mark Pugsley [00:35:24] I mean, I guess in the context of church apologies, it might be great, but it's the worst apology you'll ever see. I mean, it's ridiculous. And they kind of pushed back on some of these really important findings that they agreed to. This. This nine page document is a document the Church saw and agreed to before it was issued.

John Dehlin [00:35:42] Yeah, okay, that's great. That's great context.

Mark Pugsley [00:35:45] Yeah.

John Dehlin [00:35:45] And our viewers will, will definitely be checking it out and listeners too.

Mark Pugsley [00:35:51] So. So I wanted to highlight some pieces of this. I don't. But John, I don't want to be too boring here.

John Dehlin [00:35:57] No, no, let's do it.

Mark Pugsley [00:35:58] This is lawyer stuff and Mormon stories

John Dehlin [00:36:00] is long form and we like, we like substance. All right, all right, so let's do substance.

Mark Pugsley [00:36:04] So if people in the comments think they're. If you're bored and you want me to move on, you know, we can move on. But there's some really critical. You can see my writing all over this document. I mean, there's some really critical pieces of information in this order. And the main thing I want to point out is, I mean, let's not

John Dehlin [00:36:21] skip over the things that will help tell the story. Sure.

Mark Pugsley [00:36:24] Oh, sure.

John Dehlin [00:36:25] Yeah.

Mark Pugsley [00:36:25] Yeah. I mean, the summary is really good and just kind of gives the summary that from 1997 to 2019, Ensign Peak, an entity which manages the assets including the investment securities of the Church of Jesus Christ of Latter Day Saints, failed to file certain forms. Okay, that's kind of boring, right? File. What's the form? 13F. Who cares if the church files 13F? 13F forms are important because it gives. And they only, by the way, 13F forms, not everybody has to file these. Only people with massive portfolios of $100 million or more have to file forms. 13F. But 13F tells the market and tells market participants what the church has or what that company has in their investment portfolio.

Mark Pugsley [00:37:14] And the SEC and Congress, years ago, I think it's in the 34 act, they made this determination that if you hold tons of securities, tons of investments, if you're a big player, you have to tell people what you have. SEC is big on transparency. They're big on disclosure. And that's why in the securities world, disclosure is the name of the game. So they say, look, guys, most of you don't have to worry about this, but if you're a big shot, if you're a big player, you got to file this 13F because you got to tell market players what you're doing and what you hold. It doesn't tell you all the. All the trades, but it tells you what's every quarter. You have to file those.

John Dehlin [00:37:51] And that's important for the market in the rule of law. Why?

Mark Pugsley [00:37:54] Well, because capitalism, there's tons of people that want to know what these big funds are doing. They, many of them follow them. You know, Goldman Sachs has whole funds that follow other funds that manage assets in a certain way. Berkshire Hathaway is one of the biggest groups. And a lot of people want to know, what's Berkshire Hathaway doing? Because they're known to be very savvy investors. There's other hedge funds and investment funds in New York that are known to be very savvy. So people want to see what their holdings are so they can say, oh, they have a conflict, or whatever. And by the way, that those disclosures would have been helpful for church members because, you know, you could have seen.

Mark Pugsley [00:38:33] Does the. Does the church invest in tobacco stocks, beer, you know, alcohol stocks? Do they invest in things that they claim not to do? Well, these disclosures would have shown that, and it would have given a level of transparency.

John Dehlin [00:38:44] Also, do I need to pay tithing? Does the church need my money?

Mark Pugsley [00:38:48] Well, we'll get to that. But yeah, yeah. I mean, you know. And what exactly is this rainy day fund? And what is, you know, is the second. This. This just drives me crazy that it's a rainy day, friend. But we can talk later. I'm just like, okay.

John Dehlin [00:39:02] And by the way, Bernie Madoff filed fraudulent forms. Right?

Mark Pugsley [00:39:08] Right. I mean, that was one of his issues. Mostly. He gave investors 13F words. Yes. And, but he also gave investment returns to people that were fake. Right. So they would get like a statement, here's what's happened in your portfolio. Look at how great Australian, he faked all those. The inside peak doesn't. They only have one client. They only have one customer, so they didn't really have to worry about that. But for obvious reasons, they did not want to file these forms because once their portfolio reached the threshold of above $100 million, which is probably before inside peak was even made, you know. Right. I mean, they probably, the day they were made, they probably had several billion dollars.

Mark Pugsley [00:39:46] We don't know. But it was a big fund from day one. Right. And so, and I'm sure at some point someone said, yeah, we gotta follow these forms. What are we gonna do? And then it went up to the first presidency and the president. First presidency, for whatever obvious reason, didn't want him to be filed. Why? Well, it's, it's, it's obvious. It's obvious because if people knew how much the church had, they would not pay tithing, period. I mean, I think, I don't think that's rocket science. I think it would have been relevant to me when I was a tithe payer, but, you know, whatever.

John Dehlin [00:40:19] Okay. And you may have already answered this, so please forgive me. Why not just manage. Why not just have an office of investments within the corporate corporation of the President, the church, Jesus Christ Latter Day Saints and manage them all there? You probably already answered this. Please forgive me. Why create an entirely new LLC or, or 501c3 or whatever?

Mark Pugsley [00:40:39] You know, I don't know. I don't know that. I assume it's because there's all these regulatory requirements that, that the, if you're in the investment industry, it's the most highly regulated industry in the country by many standards. So there's all these things you have to do to comply with securities laws. So they probably felt like it would be better to have these guys all on their own. I think it may also have been the fact that they weren't, they wanted to carve out their salaries, so they weren't kind of part of the normal salary structure within the, the church office building too.

John Dehlin [00:41:13] So people would have known what these dudes.

Mark Pugsley [00:41:14] Yeah, yeah, they didn't want to know how much they're paying these guys from New York hr. Yeah, that's, that's my, that's purely speculation. But they have their own office. There was no sign, from what I understand, there was no, it wasn't like they were in a office building with Enzyme Peak on the marquee? No, it was, it was kind of tucked in, in the church office building.

John Dehlin [00:41:33] I mean, one of the things I remember from the report I read years ago was it like Packer didn't even know how much was in Ensign Peak. So, like, maybe you already said this, but maybe it was a way to make sure, you know, kind of like cells in Al Qaeda, the left hand won't know what the right hand's doing to sort of.

Mark Pugsley [00:41:51] Well, and if you may recall that the, the Church used to give like an auditor's report periodically at conference, and then they stopped doing that. And they basically said, you know, we're self auditing now. My understanding is that one of the reasons they moved away from public Ernst and Young, I think, was their public auditor for many years, is that they were concerned about this portfolio. They didn't want the auditors, who are part of a big company, a big independent auditing company, to disclose or have access to the size of the portfolio and probably other assets that the Church owns too. So that could have been part of it. There's all sorts of reasons why it makes sense to do this from. But I'm purely speculating.

John Dehlin [00:42:33] Okay, that's good. All right. So.

Mark Pugsley [00:42:37] So anyway, I, I.

John Dehlin [00:42:39] So the Church didn't file the, the 13F. I'm sorry. Yeah.

Mark Pugsley [00:42:43] 13F's. And at some point for you, for over a decade. Yeah. And no more than that.

John Dehlin [00:42:48] 20. 22 years.

Mark Pugsley [00:42:50] 22 years.

John Dehlin [00:42:50] 22 years. Didn't file the forms issued for.

Mark Pugsley [00:42:52] And at some point, you know, as we get into this, you'll see that they said, you know, someone told them. And I think multiple times people said, hey, wait a minute. You're supposed to be filing these forms. And then what happened? Instead of Enzyme Peak acting independently like most investment firms, these guys, everything that they do has to be okayed by the First Presidency. That's really important. My understanding is that nobody even knew the size of this portfolio outside of the First Presidency, meaning even the Quorum of the twelfth. Going back to your point about packers, you know, he was asked and he didn't even know. So it was really only the First Presidency that knew how much money the Church has.

John Dehlin [00:43:34] Yeah.

Mark Pugsley [00:43:34] And that, in my mind, excuse me, qualifies as a tightly held secret. I mean, holy cow, you can't even tell your own the quorum of the 12. But that's how secret this was. And so, and the, but the people in Ensign Pink obviously knew. And so they wanted to make sure. That. That this secret didn't get out. And so at some point, someone said, hey, guys, you got to be filing these things. And instead of being. Becoming compliant, what did they do? And the press release says they consulted with counsel. And I don't know anything about that. I don't know what counsel was given.

John Dehlin [00:44:09] That's the church saying, hey, we just did what the lawyers told us to do. Right.

Mark Pugsley [00:44:13] Basically. Basically. But I can. I do know this. Whoever their counsel was, whatever their counsel told them, I don't know. But what I do know is that the council would not have told them to form shell companies that were totally fake. I mean, that's not what council would have done. If you're gonna. If you're gonna start moving these assets into independent companies that fell below the threshold of disclosure. Okay, fine. But you gotta actually have them be independent companies. And that's where. I'll bet you 100 bucks they didn't follow their legal counsel's advice.

John Dehlin [00:44:44] Yeah, they.

Mark Pugsley [00:44:45] Instead of. They wanted to control it. It was all about control. And.

John Dehlin [00:44:50] But another way to say that is this came from the first president. This likely came from the first president.

Mark Pugsley [00:44:55] We know it did.

John Dehlin [00:44:56] Yeah.

Mark Pugsley [00:44:56] And this is really a really important part that I want to. I want to read to you in. On page two of this document. And this is a. This is a sentence that is really important. And I. And it's important because sometimes lawyers, we use this thing like we define a term, and then we don't really go back and say what that defined term means. Right. And then we, like, we would call this OSF or something throughout a document, and people would say, oh, what's OSF again? Oh, you look at the beginning of the document and say, what does OSF stand for? Okay. Open Stories Foundation. Right. We use acronyms. And so we don't have to write out the whole thing every time.

The Shell LLCs Used to Hide Filings

John Dehlin [00:45:37] Now, do we want to finish the. The summary? Because it talks about the. The 13 LLCs.

Mark Pugsley [00:45:42] Oh, sure. Yeah, we'll read that, and then we'll get to the next paragraph. Because the next paragraph is what I'm talking about. My apologies. I don't. I feel like people are getting bored.

John Dehlin [00:45:49] No, no, there. So we've got. We've got over. We've got 1400 people joining us, and they're saying, not boring at all. Okay.

Mark Pugsley [00:45:56] Hi, everyone.

John Dehlin [00:45:57] Let's. Let's.

Mark Pugsley [00:45:57] Let's shut me down.

John Dehlin [00:45:59] No, no, no.

Mark Pugsley [00:46:00] Okay, okay.

John Dehlin [00:46:00] Let's light it up.

Mark Pugsley [00:46:01] Okay, so enzyme. Pete, this is the second paragraph of the summary. Enzyme peak develops its approach to filing forms 13F in the names of LLCs with the knowledge and approval of the Church. Very important enzyme Pink didn't do jack without talking to the Church. The Church holds the purse strings here. It's the Church's money. And they made the call at every turn. Not just the Church, not just some random functionary in the Church. The First Presidency. Yeah, and I'll. And I'll explain that. How we know that in a minute.

John Dehlin [00:46:31] And this would have been Gord B. Hinckley. This would have been Thomas S. Monson. This would have been Henry B. Eyring.

Mark Pugsley [00:46:37] Yeah.

John Dehlin [00:46:37] This would have been Uchtdorf.

Mark Pugsley [00:46:39] Oh yeah.

John Dehlin [00:46:39] And this would have been. And this includes Russell M. Nelson down a chokes and. And again, Henry B. Eyring. Right.

Mark Pugsley [00:46:47] So speaking of Uchtdorf, little side note, you know how that was a big deal when someone came out of the First.

John Dehlin [00:46:53] He was demoted out of the first place.

Mark Pugsley [00:46:54] Yeah, that hardly ever happens. Yeah, I have a. My suspicion is the reason that never happens is because those three people in the First Presidency have this critical knowledge of the assets of Inside Peak. And so they want to keep that in the family amongst the. Just the First Presidency. So by demoting Uchtdorf they created a potential for that to get out. That's my theory. I don't know if it's true, but maybe why the turnover in the First Presidency is so rare.

John Dehlin [00:47:21] Okay.

Mark Pugsley [00:47:22] Anyway, who knows. So they. There is a quick thing. There's a comment. I think it's in. David filed this affidavit for James Huntsman's case. He filed an affidavit to assist them with a motion to dismiss that affidavit. I hope maybe you can track that down. I didn't think to send it to you, but it contains a lot of very interesting details. One of the details, if my memory serves me right, is that he was present during a. A meeting with the leaders of Inside Peak and the other people from the Church who were trying to figure out what the heck are we going to do with these 13 Fs?

Mark Pugsley [00:48:01] And people were saying why don't we just disclose it? And that there was a specific discussion that we cannot disclose it for a reason. What was the reason, what was the reason that the Church made a decision not to disclose these. How big the portfolio was because people would stop paying tithing. That was the discussion. So if there's any doubt out there, if the Church tries to claim, oh, you know, it was an oversight, whatever, bullshit. Excuse me, that is not true. The Church knew darn well, that disclosure of this information would cause people to stop paying their tithing. And you know, if the church disclosed it, which of course they don't.

Mark Pugsley [00:48:41] My suspicion is that there has been a steep drop in tithing revenues since the day that that report hit the Washington Post several years ago. I, I'm confident of it. I'm confident in, in even Jenna Reese, who does, who, you know, who's the writer, Jenna Reese. Even she said that that caused her, an active person who writes it caused her to redirect her tithing to other charitable sources. If there are people that are listening today that are still paying tithing to the church, please, please don't pay it to the church. They just don't need your money.

Mark Pugsley [00:49:17] The fears that Inside Peak had about this disclosure were entirely justified. They don't need your money. There are other charities around, even Mormon based charities that are far more deserving. And guess what? Most charities will give you an accounting of how your money was used. And I'm a big fan of accountability and disclosure. And I think everyone should only give their charitable dollars to entities that will tell them how they spent it. And I can tell you one entity that doesn't do that, and that's the LDS Church. I don't care how big their portfolio is, that's a failure on the church's part. They should tell people what they're doing with their money. And by the way, I, I have to.

John Dehlin [00:49:55] With Mormon stories in the open stories. You have to every year.

Mark Pugsley [00:49:59] Right.

John Dehlin [00:50:00] Where I publish my basic budget. Right. Including my own salary.

Mark Pugsley [00:50:03] Maybe you should switch OSF to a church and then you would not have to make those disclosures.

John Dehlin [00:50:08] By the way, I just found the James Hunt Huntsman affidavit. I have it up and I shared it.

Mark Pugsley [00:50:14] Okay.

John Dehlin [00:50:15] In, in the chat comments, is there anything, did you describe it adequately or.

Mark Pugsley [00:50:20] Yeah, yeah. I mean it's very long and very detailed. But there's some really interesting conversations that happened that are described in that affidavit, if you haven't read it, about why, why the decision was made to hide this stuff from church members. And it's obvious. I mean it's not rocket science.

John Dehlin [00:50:35] It was to hide, it was to, to not de. Incent people to pay tithing.

Mark Pugsley [00:50:39] Well, the other problem is, John, that they were making money on the tithing. The reason Binside Peak has a hundred billion plus right now. They didn't just make it out of thin air. You know where this money came from, the origination of this money, it's excess tithing revenue. Now the church doesn't to this day. According to David's submissions. I'm not getting this from anyone else, but David Nielsen's submission is that the church has a surplus of tithing year to year and it's several billion dollars excess every year that they don't need. They can build temples on every other block, but they're still not going to spend all that money.

Mark Pugsley [00:51:18] They just don't need it. Plus they have free janitorial. Right. So the point is that the church has a situation where they've got all this extra money. What are you going to do with it? Well, at some point someone made a decision that rather than spending it to, you know, help the poor or do something like, you know, Christ, like, they. What did they do? They took that same money and instead applied it to, or put it in the stock market. I just don't get that. I mean, I can I just pause for one second and when this came out, I had a conversation with my, my 80 year old mother, who I love very much, we're very close, and she just said to me, mark, what do you think about this $100 billion?

Mark Pugsley [00:51:58] Do you think that's true? And I said, I said, yeah, I think it is true. She said, I just can't believe it. I just. What a wonderful thing that the church is so careful with the management of his money, which, which is the response that many faithful members have. And I said, you know, Mom, I appreciate that, but let me ask you this question. If Christ himself were here on the earth today and had $200 million or a hundred million dollars?

John Dehlin [00:52:24] Billion.

Mark Pugsley [00:52:25] A billion. Sorry, sorry. 100 billion. 100 million. I don't care, whatever it is. I mean, just say Christ was here, you hand him a check for $100 billion or even a million dollars. I mean, mom, do you think that, what do you think he would do with that money? Would he put it in the stock market? And she, of course she knows the answer to that question. Everybody who claims to be a Christian knows the answer to that question. That's. There is hunger, there is starving. There are people in Syria and in Turkey who are dying right now. There are extreme earthquakes. There's earthquakes, there are storms, there are extreme poverty throughout this world.

John Dehlin [00:53:04] Pandemics. Yeah, I mean, Ukraine, war.

Mark Pugsley [00:53:06] There's food, just food. Food security. Many people have given estimates that. I think it's like $4 billion would solve world hunger, Literally solve it. You know, I mean, honestly, what is the church doing putting this in the stock market? And another key disclosure of David's report was that in the whole time, the 20 or so years since 1997, that enzyme peak Advisors have been in existence, not a penny, not a single penny has been used to serve others or to help the poor or to feed the hungry. Yeah, the Church does spend money. They get through fast offerings on that. But all this billions and billions of dollars are just sitting in the stock market in Toyota and Apple stock. Why are they doing that? Why does anyone really tell me that Christ would want them to spend the money that way? I just. It just is so baffling.

John Dehlin [00:54:01] Yeah. And part of this David Nielsen affidavit talks about how was it Roger Clark?

Mark Pugsley [00:54:07] Yeah.

John Dehlin [00:54:08] You know, how they just.

Mark Pugsley [00:54:09] How.

John Dehlin [00:54:10] There was an acknowledgment within Ensign Peak that the only two things, the only two expenditures that had ever been made with Ensign Peak funds were not charitable expenditures. They were. What? The mall, the City Creek Mall. Bailing it out for overruns. A consumer mall. And.

Mark Pugsley [00:54:26] And Beneficial Life Insurance Company, which is actually my law firm, is in the office. The very floors, I believe, that Beneficial Life used to be in. Beneficial Life didn't manage its assets well and needed to be bailed out. They were insolvent, basically. They didn't have enough reserves to meet the needs, as my. As I understand it. And so the Church had to bail them out. So 400 million, I think, and a billion or two on the mall, the beautiful mall.

John Dehlin [00:54:55] Gerardo wants me to add that the Church's disclosed welfare contributions have increased over 2000% since the Ensign Peak scandal was leaked.

Mark Pugsley [00:55:08] Well, okay, so they have a PR problem. I get it. Right. But, John, I don't care. It's like a fraction. And they still, for as far as we know, haven't dipped into Enzyme Peak to do that. They have tithing revenues that they can use. A lot of that, as I understand it, are fast offerings. You know, we're always told to give fast offerings on top of tithing. They get, I'm sure, billions of dollars in fast offerings, so they can do that, and they still aren't touching this money. Well, why? What do they. Anyway, I just. I'm sorry, that's totally. Total detour. But it just drives me nuts.

Mark Pugsley [00:55:41] I mean, honestly, does anyone think that Jesus needs $200 billion during the second coming? I mean, does anyone think that there's actually going to be a monetary system during the millennium? I mean, honestly. What. This is just nuts. What are we doing with this money? It could be used in so many beautiful ways. Not only that, John, can you think of a better PR strategy than to start funding hunger programs and homeless programs throughout the world, helping people recover from earthquakes, spending billions of dollars. I mean, the church wouldn't need a missionary program if they started really spending this money in a real way to solve world hunger. It would be a huge missionary program in and of itself. I just don't get it.

John Dehlin [00:56:20] And not to rant. And the church is really.

Mark Pugsley [00:56:23] I've ranted enough. I apologize.

John Dehlin [00:56:24] No, no, no, it's good.

Mark Pugsley [00:56:25] I. I'm.

John Dehlin [00:56:26] I'm wanting to pile on, but I don't. I'm not going to pile on. But, I mean, Nelson's trying to turn the church more towards Christ. He is.

Mark Pugsley [00:56:35] David Nelson is, too.

John Dehlin [00:56:36] Sorry. Yeah, but Russell Nelson, you know, the logo now has Jesus in center, and you can't say Mormon anymore. You only say the Church of Jesus Christ. So in, like, marketing, PR ways, they're trying to trump up the Christ aspects of Mormonism. But what the church, you know, is not doing is following Jesus's at least two admonitions. When you've done it into the least of these, my brother, and you've done it unto me, which is the. The poor and the naked and the afflicted. But also, isn't there a parable about the talents and bearing. The talents and hiding them versus, like, spend.

Mark Pugsley [00:57:09] You know, been to church in a while, John. So I don't.

John Dehlin [00:57:11] Anyway. No, no. I mean, Christ said, you know, use your. Use what you have now for the now, not, like, store it up for later. But anyway, we get back. So back to. So back to Ensign Peak. Okay, back to Ensign and. And the.

Church Senior Leadership's Role in the Scheme

Mark Pugsley [00:57:27] All right, so we're still talking about the SEC order. This is the order that was issued by the actual exchange Commission. There's a Commission in Washington, D.C. they have to see this and sign off on it. And it has been signed off.

John Dehlin [00:57:38] And we haven't talked about the LLCs yet. Are we. The 12 LLC?

Mark Pugsley [00:57:42] Yeah, we're going to get into that. That was just the. That was just the. The brief summary. And again, if we bog down, we can move quickly through it. But there's a key part in paragraph one on page two that I hope everyone will look at. Okay, this is going to be important as we walk through these paragraphs. It's the last sentence of the first full paragraph, and it is as referenced in this order. So meaning every time in this order, they use this phrase, senior leadership of the church. Who are they talking about? This is telling you right now consists of the church's first presidency and Presiding Bishopric. Okay, so maybe other. I guess the Presiding bishopric may have known as well about the money. But anyway, they're not talking about the 12. They're not talking about some random functionary

John Dehlin [00:58:29] in some quorum of the 70 president.

Mark Pugsley [00:58:31] Yeah, or even a church employee down in the audit department.

John Dehlin [00:58:34] That is not what they're talking about, Roger Clark.

Mark Pugsley [00:58:35] No, no, no. Everything. Each one of these decisions. When we read senior leadership of the church, you should see that as First Presidency. That's who it is, First Presidency. Okay, so that's just really important insight. So it talks about that then. And there's 3,000 congregations across 160 countries, then, in paragraph two. Enzyme peak is a Utah nonprofit. It's a separate entity, by the way. It's not, you know, It's. It's. There's some dispute about whether it's a integral, I think it's called an ancillary part of the church itself, or whether it's independent. That has some legal, Specific, legal importance. But suffice it to say that it manages the church's reserves. So these are all reserves. These are not operating monies, and they are reserves that were developed from extra tithing. The surplus tithing every year goes in there, and then it's added on. Can I make one other point, John?

John Dehlin [00:59:34] Yeah.

Mark Pugsley [00:59:34] And I clarified this with some reading I did this afternoon that there is no. This is what the church does. They try to make it sound. When they give money to the mall, Remember what they said? They said none of this money came from tithing. Right. When they gave the money to build the mall. Sorry. Yeah, yeah, yeah. Okay, so. But when you take money out of Enzyme Peak, that is tithing money. It's either tithing money or it's surplus on the tithing money. So if. Let me give you an analogy. If you and Margi have a joint bank account, right? And each of you have income, and you put all your money into one account at that point, once it's commingled in that account, it's not your money or Margi's money.

John Dehlin [01:00:20] It's. Yeah, it's joint.

Mark Pugsley [01:00:23] Right. It's your money. And you can't say, that dollar is attributable to my income and that dollar in that account is attributable to her. Does that make sense?

John Dehlin [01:00:33] Totally. Yeah.

Mark Pugsley [01:00:33] And so when the church says, this isn't tithing money, well, that is totally disingenuous, to say it nicely, because those monies in Ensign Peaks that Enzyme Peak made were based on excess tithing. And so it's Interest in income based on the tithing revenues that they received. There's no. They're all in one account. They're all in Commingled in there. There's. David's affidavits make it clear there was no separation of the tithing money versus the interest on the tithing money. It's all one. So you can't say we didn't use tithing money to build them all. That was tithing money or interest on the tithing money.

John Dehlin [01:01:13] Yeah, yeah. That's really kind of. It's disingenuous. It's a shell game. If they. If they take tithing money and invest it and then use that money to bail out the mall, or you wouldn't

Mark Pugsley [01:01:25] get 100 billion without the excess tithing that went into that account. That's where it came from.

John Dehlin [01:01:29] That's. Again, are you honest in your fellow, in your dealings with your fellow? That's like. That's not honest.

Mark Pugsley [01:01:33] It's like. It's like if I told my wife I just bought a car with only my money, she'd be, well, that's my money too. You can, you know, we both contribute to that. So it's not like you can just separate that out. Sorry. Okay.

John Dehlin [01:01:45] Can I just. I looked up. I just was curious. If it's a 501C3 nonprofit inside Peak, there should be a 990 opposite public. 990. That's available, but I couldn't find it.

Mark Pugsley [01:01:55] No.

John Dehlin [01:01:55] What's up with that?

Mark Pugsley [01:01:56] I don't know if. If you listened. I just listened to the interview with Sam Brunson that they did for the Peggy Fletcher Stack. The Tribune does a religion talk. I forget what they call it. Podcast. And they interviewed Sam Brunson and who's a tax law professor. And he has all sorts of opinions about this, which I don't agree with. But what he did say is that he thinks one of the most important things the church could start doing is filing the 990s. But I think churches are exempt. That's my understanding. I'm not a tax lawyer.

John Dehlin [01:02:29] Even though Ensign Peak is technically not the church.

Mark Pugsley [01:02:31] This is. This is where that legal argument comes in. Is. Is Ensign Peak a part of the church or not? If it's separate, it should have to file those. If it's not, it should. It would.

John Dehlin [01:02:40] Okay.

Mark Pugsley [01:02:41] All right. Well, in their point, their argument is no, we're. We're just totally part of the church. We're not independent. Even though they have a separate entity, they have separate management. They have their own Board of Directors. It seems separate to me, but for whatever reason, the SEC didn't want to go down that road.

John Dehlin [01:02:56] Got it. Okay. Let's keep going.

Mark Pugsley [01:02:57] All right. So the management of Inside Peak reports to who? Same this word. Senior leadership of the church. They report to the First Presidency. I don't know why they didn't just say First Presidency, but that's who they report to.

Mark Pugsley [01:03:11] And they are accountable to the First Presidency for their stewardship, their fiduciary duty, and managing this money in a good way. And by the way, the. Because I'm in the finance industry, I know that the Enzyme Peak actually has a pretty good reputation. They're savvy, they're aggressive, they are careful about where they put their money, and they are good at negotiating discounted fees from their outside advisors that they use. They put a lot of money with outside advisors in there because they can write such big checks. You know, most funds can't write checks like this. They are very good about trying to work down the fee so they're not paying too much. They're. They're good. They're savvy people.

John Dehlin [01:03:50] Would it be wrong to make a parallel to Curt McConkey that inside peak is kind of the Curt McConkey of. Of Mormon investment stuff? Or is that. Is that not a pleasant, you know, association?

Mark Pugsley [01:04:01] I don't know. I. I know Curtin McConkey very well, and I don't think that they would appreciate that, because they do.

John Dehlin [01:04:07] Inside Peak people would appreciate the comparison. Maybe, but.

Mark Pugsley [01:04:11] But you could make that comparison if Ensign Peak took outside money, but they don't. They do have a fund. My understanding is there is a fund that the Church created independently that involves where people leave money to the Church in their wills. And they have all these trusts.

John Dehlin [01:04:28] They have a whole different Desert Trust Company, Right?

Mark Pugsley [01:04:29] Yes. Deseret Trust Company also has a big portfolio, and Inside Peak does manage that. My understanding also is that Anzide Peak manages the endowment for byu. So they do have some other clients, so to speak, which to me, means that they should have to register as an investment advisor. But they still take the position that those are somehow so closely related to the Church that they're not that. That they're still an integral part of the Church. Kurt mcconi has outside clients, lots of them. And they do other work besides church work, so they're not quite as beholden. And of course, they're. They don't have the First Presidency breathing down their neck like Enzyme Peak does. I mean, Enzyme Peak reports to the First Presidency And I don't. I don't think the law firm does that. I'm pretty sure they don't.

John Dehlin [01:05:13] Got it. Okay, let's keep going.

Ensign Peak's Assets and Reporting Obligations

Mark Pugsley [01:05:15] Okay, so. So here. Here in paragraph three, we start getting into it, and I just have some parts highlighted that I think we should talk about. We don't need to read the whole thing, but the church created Ensign Peak in 1997 as an integrated auxiliary of the church. That's. That's that language we were just talking about that the SEC chose not to fight them on whether they're a quote unquote, integrated auxiliary. If they are, they are exempt from a lot of these filings to manage the church's investment securities inside. Peak has no shareholders or members. The securities portfolio managed by Enzyme Peak consists of what the Church calls reserve funds or reserves, which include U.S. equity and debt securities purchased with. Okay, here we go. Right here. The church wrote this. The church agreed to this document.

John Dehlin [01:06:07] Yeah. Yeah.

Mark Pugsley [01:06:07] Where does their money come from?

John Dehlin [01:06:08] Yeah, right there. Excess tithing.

Mark Pugsley [01:06:10] Excess tithing, yeah. So there's no dispute anymore. No one can ever say, oh, you know, that has nothing to do with tithing. No, this is tithing money and interest on the tithing money and. And returns from the tithing money. That's all it is.

John Dehlin [01:06:23] And they would have known they were saying those words, you know, when they agreed to this. Oh, yeah.

Mark Pugsley [01:06:26] Are you kidding me? These documents. They know this is a public document. We spend days negotiating these documents.

John Dehlin [01:06:32] Yeah. Okay.

Mark Pugsley [01:06:33] So. Oh, I should say, to the extent that there are revenues from, like, Deseret Book or, you know, some beneficial life or one or. I don't even know if they own the Deseret News anymore. But if there are revenues that are generated from those, I think those also would go into here. So there's a piece of it that's not tithing based. Some. Some fraction.

John Dehlin [01:06:56] Oh, they still own Desert News.

Mark Pugsley [01:06:58] Yeah.

John Dehlin [01:06:58] Yeah.

Mark Pugsley [01:06:59] But is it making any money, John?

John Dehlin [01:07:00] Yeah, I would say no. No.

Mark Pugsley [01:07:03] Is Desert Book making any money? Probably not. They're. They're definitely subsidized.

John Dehlin [01:07:08] Yeah.

Mark Pugsley [01:07:09] Okay, so.

John Dehlin [01:07:10] So excess tithing is being used.

Mark Pugsley [01:07:12] No question. I mean, it's a. The church agreed to this order, and it says excess tithing is where it comes from. So no more disputing that. I Want to. Paragraph 4 talks about the Exchange act and the 13F filing. We talked about that already about why they have to file these reports. So here's five. Here's where we get into the nitty gritty. Throughout its history, the securities portfolio, Ensign Peak Manage for the church contained a wide variety of equity and fixed income assets at its inception, when it was started. This is inception is in 1997 when it. At its inception, Enzyme Peak managed approximately $7 billion of church assets.

Mark Pugsley [01:07:54] A significant portion, percentage of which consisted of section 13F securities. Let me say there's some things that don't require reporting on 13F. The church says right now it's about $37 billion that would qualify for 13F. That's a third of their total stock portfolio. A third of it is managed in other countries. They're foreign or it's managed by outside fund managers so they don't have to report that. But the 37 billion here. Oh, it's right here.

John Dehlin [01:08:28] 38 billion as of 2020.

Mark Pugsley [01:08:30] Right. As of 2020. The portion of Section 13F securities in the portfolio grew to approximately 37.8 billion in 2020. But again, that's just a third. Yeah, that doesn't represent.

John Dehlin [01:08:42] So we're already over 100 billion.

Mark Pugsley [01:08:43] Yeah, yeah, yeah.

John Dehlin [01:08:44] In just stocks, right?

Mark Pugsley [01:08:46] Just stocks and securities. Or they could be in companies in different ways. There are all sorts of different types of investments. Bonds, debts, debt securities, treasuries, you name it. There's all that stuff.

John Dehlin [01:08:57] Okay.

Mark Pugsley [01:08:59] Throughout its history, Enzyme Peak was required to file Forms 13F. So they're not letting. They're basically saying, you know, this 20 year period they had to file these forms. Right.

John Dehlin [01:09:08] Yeah.

Mark Pugsley [01:09:10] Here's the crazy part. Paragraph 7. By at least 1998, senior management at Inside Peak was aware of Enzyme Peak's requirement to file Forms 13F and communicated this requirement to who? Senior leadership. Who's that? First presidency. In 1998, at least, Enzyme Peak told the first presidency, we are supposed to file these forms. And I'm sure as part of that it was like. And by the way, when we file them, you know, all, all hell is going to break loose because people are going to see how much money we have. So. Oh God.

John Dehlin [01:09:48] Hinckley. 10 years before he died. So that would have been Gord B. Hinckley as president. And I don't know who is.

Mark Pugsley [01:09:54] They're like, hey, we're supposed to file these forms. But you know, everyone's going to see. And what is the Church? What is the first presidency of the Church Do. Do? Well, next paragraph. Their intent was to prevent disclosure. The Church is more concerned about hiding the money than they are complying with the law. That is what this says. No question. To prevent disclosure of the securities portfolio managed by Ensign Peak. Why? And just as an aside We've talked about this already. Why are they worried about disclosure? Because they're worried no one will pay tithing or people will stop paying tithing.

John Dehlin [01:10:27] And just for the record, that would have been Hinkley, Monson and either Foust or Eyring, depending on the year.

Mark Pugsley [01:10:32] Okay, so they have a meeting, right? And, you know, who are these Christ, like, you know, leaders who are in direct contact with Christ? Did they get revelation when they chose to violate the law? How did they make this decision? I mean, it's a good question. How did they. What did they do?

John Dehlin [01:10:48] And is that accurate language? To violate the law?

Mark Pugsley [01:10:51] Absolutely.

John Dehlin [01:10:52] Okay, so they broke the law. They broke the law.

Mark Pugsley [01:10:54] They intentionally made a decision in 1997. At least 1998. Excuse me. By the way, that's one year after the company was formed. So it was formed in 97. 98. They show up, right? They show up in Hinckley's office and say, hey, we got a problem. We're supposed to file these forms. What does Hinckley do? What's the First Presidency do? Hide it. That's their reaction. Not, hey, you know what? Consequences are consequences. Let's just follow the law. Let's, you know, aren't there some scriptures about, you know, following the law?

John Dehlin [01:11:23] And one of the articles of faith is, we believe in honoring, obeying and sustaining the law.

Mark Pugsley [01:11:27] Yeah. What did they do? Did they follow that article of faith? No, no, they did the opposite. They wanted to hide it. What did they do? The First Presidency directed them to hide the money. How did they do it? Well, the next paragraph says the church was concerned that disclosure of the assets in the name of Ensign Peak, a known church affiliate, would lead to negative consequences. What are those? Well, we all know, in light of the size of the church's portfolio, that's

John Dehlin [01:11:57] the members would stop paying tithing.

Mark Pugsley [01:11:58] Yeah. Or whatever. I mean, maybe it's just bad publicity. Who knows? All sorts of different consequences. Whatever they are Inside Peak. This is key. Inside Peak did not have the authority to implement this approach without the approval of who? The First Presidency. So I'm glad that Roger says it.

John Dehlin [01:12:15] I'm glad Roger Clark, or whoever it was back then wasn't getting thrown under the bus as kind of the fall guy.

Mark Pugsley [01:12:19] No, no.

John Dehlin [01:12:20] They.

Mark Pugsley [01:12:20] They tried to do the right thing. Someone. I mean, but they did it from day one. I mean, it's not like they can say, well, we didn't really realize that we were supposed to file these forms. No, they knew it.

John Dehlin [01:12:30] That's where the church will get to it. Where the church says, we were just following the advice of counselor.

Mark Pugsley [01:12:34] Yeah, we'll get to that. Yeah, yeah, Total bullshit. So, okay, so there it makes it clear they did not have the authority to implement this approach without the First Presidency approval. Who made the decision to violate the law? The First Presidency. It's right here. And the church agreed to this?

John Dehlin [01:12:50] Yep.

Mark Pugsley [01:12:51] Okay, so what did they do in 2001? So they waited a few years and then in 2001, at Ensign Peak's recommendation, the church created a trust in a separate LLC under the ownership of the trust to file Forms 13F. The church designated Enzyme Peak's managing director as the trustee. Inside Peak filed The first form 13F, identifying the churches securities in the name of the trust llc. So not as the church's assets, but as some random company. And by the way, the names of all these LLCs are in the filing. I think you've posted in the show notes. You've got this Religion Unplugged article which is probably the best thing I've seen kind of analyzing David's report to Congress.

Mark Pugsley [01:13:39] Well in that, embedded in that article is the report itself. And in that, I think it's in exhibit A or attachment A, there is a list of all of these entities. And you can see they're not like they didn't name them. LDS Church, LLC, sub. LLC 1. I mean, sorry, I mean they just,

John Dehlin [01:14:03] they literally like chose names that would

Mark Pugsley [01:14:05] not be most random names.

John Dehlin [01:14:08] And didn't they pick some dude in California that like. Yep, no one would be able like. Right.

Mark Pugsley [01:14:14] I mean they basically called them like Dave's LLC one. You know, so, so they, I mean if there's any doubt that they, you know, that they're trying to hide this stuff, you know, go ahead and read, read. Okay, here, here they are.

Mark Pugsley [01:14:31] In 2017, they had the following 12 LLCs. Argyle Research, LLC. Argyle Argyle Research, Ashmore Wealth Management LLC. Sounds like just some random guy with a big portfolio. Cortland Advisors, Elk Fork Partners, Flinton Capital Management, Glenn Harbor Capital Management, Green Valley Investors, Meadow Creek Investment Management, Newberg Advisors, Riverhead Capital Management, Tiverton Asset Management and Tires Asset Management. So Those are the 12 LLCs that they formed at some point to hide the money. Right. And they purposely named them, named them names that were very random.

Mark Pugsley [01:15:17] And then they also. But then they became concerned. I'm probably needing to move a little quicker in paragraph 11. The church became aware that the public might link this first LLC to the church because the person signing the forms 13F was listed in a public directory As a church employee.

John Dehlin [01:15:39] Oops.

Mark Pugsley [01:15:42] To address this issue, on May 21, 2005, senior leaders of the church. Who's that? First Presidency. First Presidency approved a new reporting entity to be created with better care being taken. This is a quote, better care being taken to ensure that neither the street nor the media could connect this new entity to Ensign Peak. So they, they basically.

Mark Pugsley [01:16:08] I just don't want to get into this too deep, but they basically form these LLCs, call them random names, formed them outside of Utah, so they were all formed in Delaware, I think. And then they, they have to assign an address to an LLC and the addresses that they assigned were all outside of Utah. Right. But they have to put like who's the manager? So who did they put as the manager? Well, they purposefully chose people in the. In, I think inside Peak or in the church who had very common names. Right. So how. So they, instead of a really unique name, they chose Dave Nelson or somebody.

Mark Pugsley [01:16:45] You know, I don't, I don't think Dave was on him. But. But someone with a very common name that wouldn't be tied, you know, I mean we can all look on LinkedIn and see where people look. And if you look up John Dehlin, it's going to be you. Right, but if you choose a guy named John Smith.

John Dehlin [01:17:00] Smith or, or whatever.

Mark Pugsley [01:17:02] Yeah. And they, so they purposely pick guys.

John Dehlin [01:17:04] Maybe not Smith.

Mark Pugsley [01:17:05] Yeah, Nielsen, I don't know. Whatever they chose. So they picked companies that were the people and put their names on it. Well, and here's a great, here's a great one. Down, down. Okay, this is. Sorry, this is in paragraph 22. If anyone doubting me. Enzyme Peak was responsible for designating the Clone LLC's business managers, many of whom were church employees. Business managers were selected because they had common names and a limited presence on social media and were therefore less likely to be publicly connected to Ensign Peak or the church. So I mean this is super intentional.

John Dehlin [01:17:43] It's shady and intentional forethought, deception.

Mark Pugsley [01:17:45] By whom?

John Dehlin [01:17:46] By the First Presidency. By the First Presidency, yeah. Okay, really quickly, just super quickly, I want to, I want to thank Force Clay for a super chat. And also Safrania writes a really good point. Thanks for your super chat. Safrani, she writes, doesn't each of the Presiding Bishopric members have an executive level professional background in finance? This French guy who's the presiding Bishop and Iring has a Harvard mba. Like these dudes are not. I mean that's why they're in the Presiding Bishop Ricker First Presidency, because they understand business. Right. Those are great points.

Mark Pugsley [01:18:18] That's pretty much true of the whole first presidency and the Quorum of the twelve. Now by the way, after Monson's death, they're all professionals.

John Dehlin [01:18:24] Everyone Please subscribe to YouTube to help us with subscriptions. Okay, keep going, Mark.

How the Fraudulent Filing Scheme Worked

Mark Pugsley [01:18:28] Okay, okay, so back to okay, but here's the problem. Here's where they messed up. They, they, they were fake. And, and if this whole scheme would have worked, if they would have actually transferred the assets to these individual entities and given them the autonomy, the authority to manage them, then they would have been fine. But because they're such a top down organization, because they're micromanaged by the first presidency, they didn't do it. And they couldn't do it. They just couldn't do it. So they kept all of the assets in Ensign Peak controlled by, controlled by Enzyme Peak. These managers who were designated, these common named guys that they picked, they had zero authority, they had zero ability to do anything.

Mark Pugsley [01:19:10] And guess what, by the way, when. Okay, I have to do a shout out. Can I do a shout out, John? Yeah, let's give a shout out. And I don't know his or her name, but somebody in 2018 leaked. They figured out through I think IP addresses and their websites that these 12 entities I think were connected.

John Dehlin [01:19:31] This is the original whistleblower.

Mark Pugsley [01:19:32] The original whistleblower, not David Nielsen, but

John Dehlin [01:19:34] the guy, this person has emailed me.

Mark Pugsley [01:19:36] Okay, yeah, he, it was in he or she.

John Dehlin [01:19:39] He or she.

Mark Pugsley [01:19:40] Sorry. And they, they. And it was Mormon leaks. Put that out. Right, right, right. Shout out to Ryan McKnight in his organization. So, so those guys, that, that individual who did some really fantastic detective work figured out that, that this was something that he, he could draw this connection. So when that came out, guess what happened? The guys, the guys. Can I.

John Dehlin [01:20:07] Do you find that. I'm just going to make the point. Not only was the church intentionally creating fake managers for these fakely named, intentionally located outside of Utah funds, they were signing up its own employees to lie and deceive.

Mark Pugsley [01:20:26] Yeah.

John Dehlin [01:20:26] So they're, they're actually asking, bringing people into the deception and using their authority, asking others to be a part of the, of the deception.

Mark Pugsley [01:20:37] If you work for the church, I guess you just nod your head and say yes, right? I mean that's what you do. And these guys didn't push back and in. Did they know that they were perpetrating basically a fraudulent scheme? I don't know. But they, you know this. I'm going to be careful about the use of the word fraudulent. This was clearly intended to deceive. You can use the word fraud if you want. That has a little bit different and a connotation in my mind, but because I work in the fraud industry, I mean, fraud is my expertise. But in any event, these guys knew this was shady.

Mark Pugsley [01:21:07] They had to have known. And how do they. How do we know they knew, John? Well, in paragraph 33, they talk about that leak. They said. In. In May 2018, a public website reported that various entities appeared to have ties to the church have filed 14 Forms 13F revealing holdings of approximately 32 billion. The website referenced information evidence indicating that these entities domain names were all registered to an entity tasked with overseeing and protecting the intellectual property of the church and that each of the LLCs identified enlisted a business manager. Business manager whose name matched that of a church in place. So this detective work done by the Mormon leaks person who we don't know.

John Dehlin [01:21:48] Not. Not Mormon leaks. The person I'm in contact with, we'll call him the original leaker leaker.

Mark Pugsley [01:21:54] Okay. Okay. Yeah. As far as I know, he is not a whistleblower per se. In. In the sense that he's a snoop. He's a. He's very talented.

John Dehlin [01:22:02] Super guy.

Mark Pugsley [01:22:03] Yeah, yeah, yeah, yeah. If you talk to him, you can tell me he's a guy. It's. It's a guy, right? Can you tell me that?

John Dehlin [01:22:09] Maybe I shouldn't. But what I. So this is totally relevant, but I just. Does. Would this person even have claim to some of the whistleblower?

Mark Pugsley [01:22:17] I don't know.

John Dehlin [01:22:17] Okay.

Mark Pugsley [01:22:18] I don't know.

John Dehlin [01:22:18] Okay.

Mark Pugsley [01:22:18] They should contact council, but there are certain requirements of the SEC's whistleblower program that have deadlines that have to be met. I will just say that in general, you have to. You can't sit on this, this information for years and then, and then quit and file it down the road. Meanwhile, the fraud goes on. If you're a whistleblower, you have to be quick. And so you have to get in there to the SEC and jump through all the hoops. And there's quite a bit that has to be done.

John Dehlin [01:22:43] Okay.

Mark Pugsley [01:22:44] Actually, so I don't know.

John Dehlin [01:22:45] Well, kudos to the original whistleblower.

Mark Pugsley [01:22:47] Yes.

John Dehlin [01:22:48] To be either named later or to never be named.

Mark Pugsley [01:22:51] Right, right. So. So this is actually kind of funny. In paragraph 34, after the website published or reported this information to the business managers resigned. They resigned. They're like, oh crap, I'm involved in something super shady. So I'm done. I'm out.

John Dehlin [01:23:08] They resigned, not resigned from their Church employment?

Mark Pugsley [01:23:11] No, no, no.

John Dehlin [01:23:11] Just from their agreeing to be a part of the scam.

Mark Pugsley [01:23:14] Yeah, yeah, yeah. They voiced concerns about what they had been asked to do. And rather than changing the LLC structure, two new business managers, two more flunkies were added to. To assign to replace the two that resigned. So. So it's like, you know, you go to the front. I don't want to go the front. Okay, you go replace the pond.

John Dehlin [01:23:33] Yeah, replace.

Mark Pugsley [01:23:33] These guys got shot. You go up there.

John Dehlin [01:23:36] Anyway, next in line.

Mark Pugsley [01:23:37] It's actually next to the firing line. That's exactly right. Okay, okay, So I want to go back. I jumped ahead, but I just thought that was kind of classic, that those guys. Those guys just. They're like, oh, oops. All right, so in paragraph 10, it talks about that Enzyme Peak didn't transfer any of the stress discretion to these entities. They just sat on it and they kept it. All them. And so they were all just fake. And then on March 15, 2005, the church became aware that the public might link this first LLC to the church. So this. Because the name.

Mark Pugsley [01:24:11] And so they tried to come up with better names. Right. So then in paragraph 12, on December 1, 2005, Ensign Peak formed a second Delaware LLC as a nonprofit corporation. Where was it located? Oh, in Wilmington, Delaware. And they named Enzyme Peaks managing director as its manager. Then it filed the forms. So several years later, by the way, that was probably Robert Clark. Roger Clark. Excuse me, who? Who? Funny coincidence.

Mark Pugsley [01:24:45] When I first started practicing law, I was in Los Angeles, and I was in a ward in a little town called La Canada Flint Ridge. And Roger Clark was in my ward, so I didn't really know him because he was too cool, but it was in his ward for a bit of time.

Mark Pugsley [01:25:02] Okay, so. So then they named probably Roger Clark as its general manager. That was also probably a mistake. But anyway, Several years later, 2011, Inside Pete became concerned that its portfolio had become so big that the filings it made using the name of the secret LLC name might attract unwanted attention. And. And so it wanted to file more LLCs because, you know, they're getting too big in. And all of a sudden, these. This random LLC that no one's ever heard of, it has one of the biggest portfolios in the country. They're like, oh, Jesus is getting way too big. Yeah, yeah, yeah, we gotta. We gotta hide Jesus's money a little more.

Mark Pugsley [01:25:38] We can't have that getting out. So. So they created more LLCs. Who. Who approved that? Oh, wait, let's see. Oh, this church is senior leadership so they actually went to the First Presidency and said, hey, we need some more llc. We got too much money now. And they're like, okay, yeah, go ahead and make some more. So they did. They formed New Clone LLC for the purpose of filing these forms. Five new entities were formed.

John Dehlin [01:26:00] Really, really, really quick. 2011 puts us into Thomas S. Monson, Henry B. Eyring, and Dieter Uchtdorf administration.

Mark Pugsley [01:26:07] So we're moving on into a new administration. They must deal with all these crazy problems all the time. Makes you wonder what other kind of shady decisions they make. But anyway, this one, clearly they knew what was right and they chose not to follow the law anyway, so. So they make more. Five new entities in 2000 make more.

John Dehlin [01:26:28] More.

Mark Pugsley [01:26:29] Yeah, they did.

John Dehlin [01:26:30] And in more cowbell, more LLCs.

Mark Pugsley [01:26:33] And then, okay, this is classic in paragraph 15, in 2015, Inside Peak became aware that a third party appeared to have been connect who appeared to have connected the holdings of various LLCs back to inside Peak. So this is interesting. This is prior to the first guy, the guy that you're talking about, that you've talked to. He was in 2018. Well, in 2015, somebody did some detective work and figured it out before. So what did they do? Enzyme Peak brought this issue to the attention of the church. The senior leadership of the church, that is The First Presidency approved Enzyme Peak's recommendation to.

Mark Pugsley [01:27:13] Excuse me. Gradually and carefully. This is a quote, so it's probably from an email or a memo. Gradually and carefully adapt Enzyme Peaks corporate structure to strengthen the portfolio's confidentiality. So the First Presidency says, work. Do better. Do better at hiding the money. Do something more. Come on, guys, use your creativity.

Mark Pugsley [01:27:38] So, okay, what did they do? Well, in. On November 6, 2015, senior leadership of the church approved Ensign Peak's plan for the creation of additional clone LLCs to further prevent disclosure of the Church's holdings. Ensign Peak formed six more clone LLCs, bringing the total to 12. And we just read all of their names.

John Dehlin [01:27:58] And there's no other reason to make 12 other than to dilute the amount of money that appears in each llc.

Mark Pugsley [01:28:08] Because before they. When they get too big, there are people out there who follow these, that read these form 13F's. They are definitely people that track these. And as their portfolio gets bigger and bigger, these people are going to be

John Dehlin [01:28:20] like more and more scrutiny.

Mark Pugsley [01:28:21] Who the heck is this? You know, who is this company? I've never heard of them. And they're managing $10 billion. Who the hell is that? You know? And they'll start looking. So again, they wanted to keep it number. Or alternatively, it could be because Jesus had 12 apostles.

Mark Pugsley [01:28:35] I'm just saying it's possible that that was why there's 12. We do not know. We do not know. All right, so each of the inside peak was responsible for designing, designating the Clone LLC's business managers. Again, they picked common names. We already read that. So then in paragraph six, I'm gonna.

Mark Pugsley [01:29:00] So then it kind of gets into. Oh, this is classical. So each LLC was also assigned a phone number, a local phone number that would go directly to a voicemail. In Enzyme Peak, senior manager was instructed a business manager of one of the clone LC's to notify him if they get any voicemails from. Not from investors, not from members. Members. No. If they get any voicemails from regulatory agencies.

John Dehlin [01:29:25] Okay.

Mark Pugsley [01:29:25] That's the quote. No, John, that's what it says. If you get a voicemail from the sec, let me know. Otherwise, don't worry.

John Dehlin [01:29:33] No. Otherwise it says, delete all others. Yeah, right. Not just. Not just ignore them, just delete them. That's destruction of evidence.

Mark Pugsley [01:29:42] Yeah, if the sec. If the SEC goes, okay, then let me know. Otherwise, forget about it. Who knows, you know? I mean, it's not destruction of evidence if it's just some random. They're probably mostly from people saying, hey, I see you have a $20 billion portfolio. I'd kind of like to manage some of that. Or would you. Can we sell you some of our securities? They get those sales calls all the time. Okay, so. Okay, so.

Mark Pugsley [01:30:02] So. So this. This next section talks about the misfiled 14, 13 Fs. And we don't really need to go into it very much other than to say that they were signed by these designated business managers, these fake managers that they designated had to sign these 13Fs that were going to the SEC. And if I were one of those guys, by the way, they're all formerly licensed traders on Wall street who should know that they were doing something illegal. But they apparently didn't care, or they thought Heavenly Father would protect them. I guess they. So even though there were no securities being managed by these entities, these fake entities, they told the managers to sign 13 Fs as if they were.

Mark Pugsley [01:30:46] So they clearly knew that they had no money, no securities in their portfolio, and yet they signed forms to 13F forms and submitted them to the SEC knowingly. Now, why wouldn't the SEC go after those guys that signed those forms? That's my question. I don't know the answer to that. I think they should. I Think those guys, each and every one of them, knowingly filed a false form and submitted it to the federal government, and they should be prosecuted for that because that's a knowing omission or knowing they did it knowingly.

John Dehlin [01:31:18] And signing it would mean I'm in charge of this.

Mark Pugsley [01:31:20] Yes.

John Dehlin [01:31:21] And I, I've been watching it. I know what's going on.

Mark Pugsley [01:31:25] Yes.

John Dehlin [01:31:25] And wasn't there something about the timing where sometimes they, like, signed it, like after these forms had already been submitted?

Mark Pugsley [01:31:31] Yeah, they submitted electronic signatures and then. Yeah, actually got them handwritten. Signatures hadn't even been obtained. So in some cases it's. Maybe someone filed it and didn't even tell the guy. This poor guy, this, this schlup who has been assigned to be on the front line and take the take the hit for the church is, is taking on significant legal risk and exposure by signing forms that are. He knows are fake or they're submitting

John Dehlin [01:31:57] forms that he hasn't even seen, let alone signed. Yes, yes, in his name.

Mark Pugsley [01:32:02] But then later, if he signs it, isn't he going, what are you doing? What have you done? You put my name on that. No, that's not right.

John Dehlin [01:32:07] I'm already wondering why the church, why people weren't put in jail for this.

Mark Pugsley [01:32:12] I agree. I mean, but, but the, the response. And we should talk about why the fine was only 5 million and we can talk about that. You know, a lot of people. Yeah, it's a form. You know, it's a form. Come on. We don't put people in jail for forms. We. We put them in jail for running a Ponzi scheme. We put them in jail for, you know, stealing money. Well, were people stealing money at NSAI Peak? Well, we don't know, because guess what? They didn't have a compliance department. So who is there tracking whether they had the right policies and procedures in place? My brother is a controller of a publicly traded company.

Mark Pugsley [01:32:44] His whole job is to make sure that the company follows the accounting rules in every respect. And he's great at it. Why doesn't. Why didn't Enzyme Peak, managing one of the literally the largest portfolios in the world, why didn't it have a good compliance people to make sure that they don't ask their employees to file fraudulent forms? I mean, come on, that's kind of what compliance people are supposed to do.

John Dehlin [01:33:07] I read something about there being. Being reported that some funds would disappear at Ensign P. I don't know.

Mark Pugsley [01:33:14] I have no knowledge of that. But I think it wouldn't be surprising to me. Because they're dealing. They're just awash in cash.

John Dehlin [01:33:20] Yeah.

Mark Pugsley [01:33:21] And who's. Who's. Who's looking over it? The First Presidency.

John Dehlin [01:33:24] Yeah.

Mark Pugsley [01:33:24] They expect the First Presidency to be compliance people. Are you kidding me?

John Dehlin [01:33:28] Yeah.

Mark Pugsley [01:33:28] I mean, they're. They're way too busy, and they don't understand the issues, so. But they're the ones that made all the decisions, including to file these fake forms. I mean, did the First Presidency specifically say to them, hey, by the way, use one of your shill employees whose name is very common and doesn't have a social media account, put him on that and make him file the false forms and commit perjury? Is that what they. Is that what the First Presidency said? I doubt it. But that's essentially what they told him to do.

John Dehlin [01:33:55] Yeah. Okay.

The SEC Fine and Why It Was Too Small

Mark Pugsley [01:33:57] Okay, so. So the Church. I don't want to get into this too much, but. So I'll just say that in paragraph 30, the Church and Anzide Peak understood. That means they had knowledge. This wasn't an accident. This wasn't a mistake, John. This is intentional. They knew that Ensign Peak continued to make investment and voting decisions relating to the portfolio and that the LLC structure was created for the sole purpose of filing the forms 13F. They all knew it. It wasn't a secret. They knew they were filing false forms and making some random dude sign them on behalf of this entity that was a fake entity throughout its history.

Mark Pugsley [01:34:42] At least once a year, Enzyme Peaks Managing Director met with the senior leadership of the church to discuss Enzyme Peaks activity, including, at times, the LLC structure. So this is important. They say that every year these guys met with the First Presidency to explain what had happened. How much money are we making? Look at how big our portfolio is. Oh, and by the way, we've got this great LLC structure with these fake filing, fake 13F forms that we're filing. Aren't we great?

John Dehlin [01:35:12] Again, this would have been Roger this.

Mark Pugsley [01:35:14] Yeah, Roger. And I guess some of his leadership. I don't know who that is, but this is. This next sentence is important. Unanimous approval from the senior leadership of the Church. Who's that? First Presidency was required before Ensign Peak could deviate from the LLC structure and file forms 13F in Enzyme Peak's own name. So that's kind of important.

Mark Pugsley [01:35:39] Many people I've seen in the press have said, wow, why did the Church get fined by the lc? I mean, by the sec. Excuse me. Why the Church? Why wouldn't you just file Enzyme Peak? Excuse me? Sue Enzyme Peak and get them to pay sanctions. Well, this Is your answer. The First Presidency was behind all this. The First Presidency directed it all. The First Presidency had the final approval of what they were doing and didn't let them deviate without what unanimous vote. So the First Presidency had to unanimously agree to deviate. And of course they didn't. They all, year after year signed off on illegal conduct.

Mark Pugsley [01:36:18] That is why the LDS Church was fined $1 million by the SEC. Do you think the SEC likes to find churches? No. No. Do they think the SEC likes to take on Mitt Romney's church? No, they don't. It's politically not good. Not good for them. You know these, this is a very well connected LDS church. The LDS Church has likely all the big senators. There's multiple senators and representatives from many different states in Congress. The SEC doesn't, it doesn't do a good, it's not good for them to take on the LDS Church or any religion really. Or any religion. Especially the big ones though. Right.

John Dehlin [01:36:55] They don't even want to go after Scientology these days.

Mark Pugsley [01:36:57] No, of course not. But this is a power, powerful church.

John Dehlin [01:37:00] Right.

Mark Pugsley [01:37:00] And Mitt Romney almost got to be the president. I mean, this is not a small thing to really take them on and find them a million dollars. Why would they do that? Well, I think that's why, going get back to my point that this document is nine pages long. That's very unusual. They're very short usually. And why is it nine pages? Because the SEC is trying to tell you and me, please read this order. And, and this is why we're finding the church a million dollars. Because the church was in charge of this. The church did this. Sure, Ensign Peak followed orders, but SEC doesn't find churches. Maybe the irs, but not this. Yeah, this is, I mean, it's crazy. It's nuts.

John Dehlin [01:37:40] I heard there's a history of the SEC not fining corporations large amounts of money because usually they're publicly held and traded companies and all that does is punish the shareholders when in reality it's the executives who are to blame for a lot of this stuff. And so what they care much more about is public embarrassment and shame and accountability on the leadership and less about ultimately punishing the lay person. But I read that somewhere.

Mark Pugsley [01:38:09] Well, I mean, I, I don't, I don't know. I mean, I, I have, it's speculation. I have represented companies that have been fined tens, hundreds of millions of dollars. So that definitely happens. That's definitely true in Ponzi schemes where the fines and penalties that are used to pay the SEC don't go to investors. And there are many investors that make that argument. But you know, let me just say, let me just put this $5 million in context.

Mark Pugsley [01:38:41] Merrill lynch, all the big banks, Merrill Lynch, Morgan Stanley, Goldman, recent, just a few months ago, got fined like $500 million for. For what? Well, because they weren't monitoring their employees use of text messaging and apps like WhatsApp. So those companies paid $500 million in fines for using text messaging with their clients. Literally.

Mark Pugsley [01:39:11] Now that's crazy. That's a lot of money. Now of course they're big, big companies and they can afford to pay it, but they really sent a message, you better take care of this. You better not violate the law. You better monitor what your brokerage firms have to monitor, employees communications. And they can't do that when it sticks, right? So it's a big deal. But $500 million sends a message to those firms. You better get your act together. Why wouldn't the SEC in this case say hey church, hey, Mormon church, hey, LDS church. You guys need to get your act together. What you did is outrageous.

Mark Pugsley [01:39:44] And it was so intentional and it was so micromanaged by the first presidency itself. You guys need to pay some big fines. But for What?

John Dehlin [01:39:53] Is it 0.01% or something like that?

Mark Pugsley [01:39:55] I didn't do the math, but you know, I mean, seriously, I mean, it's a.001. There's a guy that you've done that does a tick tock. I can't remember. He's really one of your tick tocker friends that you've had on a lot of these. He did the math and I'm actually trying to stay off tick tock. But I did see this one and he did the math. I. Someone should post it.

John Dehlin [01:40:19] LDS discussions maybe.

Mark Pugsley [01:40:20] LDS discussions. Yeah. And he said, how much does the church make per minute? You know, and I can't remember what the number was, but someone should really link to that or post it because it was like, it was like $5 million an hour or something. I can't remember what it was, but it was a heck of a lot of money. I mean, the church makes more on its portfolio in a, in a day that it could pay this fine, you know, 10 times over. So this is such a drop in the bucket that my thought is that the intent was to send a message through this long filing rather than to punish the church. Because if you want to punish the church, it would have been a bigger fine.

John Dehlin [01:40:57] So yeah, Tony wrote at $5 million, those fines represent about 0.01% of the total reported value of the Ensign Peak portfolio managed on the Church's behalf, which, according to its latest filing, reached 44 billion in value at the end of 2022.

Mark Pugsley [01:41:14] Right. In 44 billion, remember, is not the whole picture. That's just the stuff that Inside Peak manages. They only manage a third of the Church's portfolio.

John Dehlin [01:41:23] But, but, you know, if the fund makes 7% a year. Yeah. What. What times 0.01 equals 7%?

Mark Pugsley [01:41:30] I mean, it's like nothing. This is nothing. This is pocket change. This is like telling you to. Have you got a quarter in your pocket. Okay, that's your fine. That's basically what the SEC did here. Now, again, I think they sent a powerful message. I mean, it's in every newspaper in the country is talking about it. Yeah, the Church is very concerned about public relations, and they don't like you and me talking about these things. They don't like, you know, all the news articles. And so this is really the biggest punishment is the bad press.

John Dehlin [01:41:58] I think the Church would have paid a billion dollars to keep this out of the press.

Mark Pugsley [01:42:02] Yes.

John Dehlin [01:42:02] Don't you think?

Mark Pugsley [01:42:03] Oh, yeah, yeah. And to keep it off and to have it all go away, this is

John Dehlin [01:42:07] going to cause a crud ton of people to leave the Church or stop paying tithing.

Mark Pugsley [01:42:11] I don't know. I mean, honestly, if you knew that the First Presidency, who you revere as the prophet, seer and revelator of the Church, is telling its. Its Enzyme Peak people to commit fraud or to at least disguise, you know, to do all of these subterfuges to try to keep that under the, under the radar. I mean, that's. They. They filed fraudulent filings with the sec. They didn't get charged with fraud. They could have been, but the. For whatever reason, the SEC chose not to include that in there. But the charges is a significant one that they, they said

John Dehlin [01:42:48] Tony Simrod called it a ruse.

Mark Pugsley [01:42:52] Okay, sure. I mean, the, The. They basically said that they, you know, violated section Rule 13f1, 13f of the. Of the Exchange Act. I'm trying to see. Sorry, I didn't underline this piece. So they basically. Oh, here it is. Here it is. As a result of the conduct described above, the Church caused Ensign Peaks Violations of Section 13F1 of the Exchange Act. So this is why the Church got fined is because the Church caused it. The Church told Enzyme Peak to violate the law. So I'm not going to say fraud. I'm going to say violate the law. But that's Because I'm a lawyer.

John Dehlin [01:43:38] Yeah. Okay. Yeah. And I guess to put it maybe even a finer point on it, not only is the Mormon Church First Presidency, you know, knowingly perpetuating a fraud and, and recruiting many, many other professionals into their fraud, but through the Temple recommend interview, you know, millions of Mormons each year are asked, are you honest in your dealings with your fellow men and women?

Mark Pugsley [01:44:09] They should turn out and say, are you? Yeah, yeah, but, but if, but if,

John Dehlin [01:44:13] but if you drink a cup of coffee, if you don't pay a full 10% of your tithing, you can be kept out of the wedding of your own child. You can be embarrassed and shamed in terms of very public ordinances, you can be kind of marginalized in the church just for a minor infraction of literally drinking tea or coffee. And yet the Mormon Church is literally at the highest levels, knowingly perpetuating, knowingly fraud.

Mark Pugsley [01:44:43] Well, knowingly filing false statements with the sec. I'm going to say lying. Lying, yeah. They're violating the law for sure. And they're knowingly, they, they had repeated conversations with their people saying, we're supposed to do this. They said, hide it. Yeah, repeatedly, year after year after year.

Tithing, Hypocrisy, and Member Trust

John Dehlin [01:44:58] And the point is, it's a really awful hypocritical, hypocritical double standard.

Mark Pugsley [01:45:03] Okay, but John, let me ask you this. What if you were in the First Presidency and I said to you, why did you do that? Why did you do that? What is your, why would, what would they say? What would their justification be for concealing, for going so far to conceal this? The size of the Church's assets?

John Dehlin [01:45:22] I mean, I know how they would think that. I think, I think they would just say, listen, we don't need the members money. The members need to pay tithing so that one, they can get the blessings, and number two, so that they can, they can learn obedience and learn faithfulness. So we don't want to do anything that would lead the members to not want to obey Heavenly Father's laws.

Mark Pugsley [01:45:48] Okay, but that's ridiculous. Because if you're truly faithful and you're a true believer, you're not going to care how big the Church's portfolio is. You're not going to care how your money is used. You're just getting your, you're just getting your blessings. And if you. The blessings will open up the windows of heaven. Right? So I agree with you, though. I think that is what they would say. And they would say the end.

John Dehlin [01:46:07] I think it's what they think and feel and Believe.

Mark Pugsley [01:46:09] Yeah, yeah, yeah.

John Dehlin [01:46:10] But then subconsciously, they also don't want the money to stop rolling in.

Mark Pugsley [01:46:14] Well, that's the part I don't get, John. The Church doesn't need the money. The Church does not need your money. Doesn't need my money. It doesn't need anybody's money. It doesn't even need Mitt Romney's money. They could stop getting tithing today. You've said this before. I think they could go on in perpetuity, just running off of the interest and the income from these investments. This is a massive portfolio.

John Dehlin [01:46:36] Yeah. If you take, let's just assume the portfolio is what, 180 billion at this point of all income generating real estate.

Mark Pugsley [01:46:44] Yeah, all of it.

John Dehlin [01:46:45] Let's just assume it's 180 billion. It could be more, it could be less, it could be a fraction of this. We don't know. But 7% annually, 6% returns. Pick whatever you want. 5%.

Mark Pugsley [01:46:55] 5%. What's that?

John Dehlin [01:46:56] That still covers, that's still going to. Well then cover the Church's eight or nine billion dollars annual operating budget.

Mark Pugsley [01:47:02] Yeah.

John Dehlin [01:47:02] So they don't need your tithing. Literally.

Mark Pugsley [01:47:04] Absolutely do not need.

John Dehlin [01:47:05] They could pay the Church's operational budget off of the interest from Ensign Peak Investments, 100%.

Mark Pugsley [01:47:10] And they could operate janitorial. They could actually hire a janitor maybe or two. They could, you know, have groundskeepers for all the churches. Their operating expenses are high. Sure. But this is, what's, what's the math on 5% of 200 billion? If it's that, that's $10 billion a year in conservative revenue. Right. Is my math right. I mean, that's a lot of money. And the Church's tithing revenues, according to the David Nelson filing, are between 5 and $7 billion a year in tithing revenues, not all of which is used. So a surplus goes in. So, so if the, if this is the, this is the important piece. The Enzyme Peak portfolio generates more income than tithing already by a long shot.

John Dehlin [01:47:55] Yeah.

Mark Pugsley [01:47:55] Billions more.

John Dehlin [01:47:56] And that's just what we know of.

Mark Pugsley [01:47:58] That's what we know of. Yeah.

John Dehlin [01:47:59] It could be more.

Mark Pugsley [01:48:00] That's just the portfolio. What about all the real estate that they own? And they're going to make tons of money on this massive Florida real estate project they're working on. They're buying, you know, stuff all over the world and so, and they, one of the largest landowners in the, in the world already. So that generates income as well. The Church does not need your money.

John Dehlin [01:48:20] Yeah. One ander. A commenter wrote 12.6 billion a year at 7%. So thanks for that.

Mark Pugsley [01:48:27] $12 billion a year. And the Church's tithing revenues, at least before David Nelson's report came out, their tithing revenues were apparently between five and seven billion dollars. So they're making double the amount of money on their investment portfolio than they are in tithing revenues. Yeah, but it's not about that, John. It's about proving your worthiness.

John Dehlin [01:48:45] Yeah.

Mark Pugsley [01:48:45] Yeah, that's what it's about.

John Dehlin [01:48:46] Okay.

Mark Pugsley [01:48:47] Keep paying your tithing.

John Dehlin [01:48:48] Okay. All right. Okay. So that's the order that the Church agreed to and signed off on. Where. Where should we go next in our outline?

Mark Pugsley [01:49:05] So. So can I just say one quick thing about. About this is, is I. I've said it before. This is an unusually detailed order that I. More detailed than any I've ever seen with the sec. I think that was done intentional, and I think there was intent to send a message. The order sends more of a message than the. Than the fine. The order is where the message is, not the fine. And people need to focus on that. The problem is it's kind of hidden

John Dehlin [01:49:34] or obscured or hard to find, you know?

Mark Pugsley [01:49:38] Yeah.

John Dehlin [01:49:38] You know, and legalistic. And by the way, we need someone like you to understand all this.

Mark Pugsley [01:49:43] Right, Right. And there's lawyers out there that specialize this. The other thing is, if Enzyme Peak was serious about complying with the law and wanted to know, hey, how are we going to do this? We. We're not sure about these fake companies we're forming. Is that okay? Who should they have called? They should have called the sec. The SEC answers those kind of questions. And they could have, even though they didn't have much of a complaint. Compliance department. We don't know who their lawyers, what their lawyers were telling them, but we do know that they always had the SEC to call. And the SEC will tell you, no, you need to do X, Y, and Z.

Mark Pugsley [01:50:12] Do we need to file these forms? Yeah, you do. They. They could have called the SEC at any given time, but they instead chose to kind of flout the sec. You know, they. They've filed these fake filings instead of doing their best to comply with the law. And it was intentional. So I. It's a dead horse that we're beating, but it's, it's really important.

John Dehlin [01:50:31] So really quickly, you've probably already answered this, but the whistleblower percentage, the 10 to 30%, will that be of the 5 million or is that of a different number?

Mark Pugsley [01:50:41] Of the 5 million?

John Dehlin [01:50:42] Okay. And I got a sense, you weren't happy about the 5 million from the whistleblower perspective, not because you necessarily stand to gain. I'm sure you care about David. He's made huge financial career sacrifices. If he's now splitting this some big percent with his attorney, his representation, whoever

Mark Pugsley [01:51:02] that is, and possibly other whistleblowers, we don't know, then.

John Dehlin [01:51:05] Then he's not gonna maybe get what he needs to kind of recoup.

Mark Pugsley [01:51:09] Well, that's the point I want to make, is that, you know, first of all, I know David and I. He's. He did not do this for the money. I can tell you that for a fact. I know that he did it because he is an ultimately a very honest guy and was offended by the subterfuge, the. The illegality that he observed when he worked for the church. And I think, you know, you know, that's a story he's going to tell. And at some point we're all going to hear that story. And I. I look forward to it. I've heard it, but I hope all of you can hear it, too, because you will, when you meet this guy, you will understand it was not about the money.

Mark Pugsley [01:51:44] Now, as a lawyer, you know, like I said, I get paid through these whistleblower awards. That's how I get paid in my practice. I would be disappointed in this award, yes, but. But this is not the full picture because David, also, the bigger piece of this, of what he did, is in the irs. So just keep that in mind. The IRS case has not concluded it's ongoing. We don't know exactly what's going on. But I have read his filings, I've read the submissions, and I know that the bigger exposure the church has are to lying to the IRS about foreign assets that they had. Lying to the IRS on what are called FUBARs.

Mark Pugsley [01:52:25] They misstated all sorts of things in their filings with the irs, and I think that has a bigger exposure to the church. Now, let me say I'm an sec. Whistleblowing is most of what I do. So IRS and tax is not really my area of expertise. But my understanding is that that's where they expect to hit the big money.

John Dehlin [01:52:46] I mean, logic suggests to me that if the SEC now is going to publicly rule not in favor of the church and against the church, that has to at least slightly, if not more, increase the probability that the IRS ruling might follow suit. I've heard some people wonder, well, there's an IRS office in Ogden, so does that mean Mormons are going to kind of scuttle this and keep the, the IRS whistleblower thing from ever happening. We're all speculating.

Mark Pugsley [01:53:17] So I mean, the office in Ogden is not where all the investigators are. They're mostly in D.C. yeah. Also the, there's always the Department of Justice. If there's illegal. Illegality here, there could be still the potential of criminal sanctions. I would love to see something like that. I would love to see these folks held accountable criminally for the work.

John Dehlin [01:53:38] So there still could be FBI.

Mark Pugsley [01:53:40] I'm not making a prediction. I'm just saying there are investigations ongoing. The irs, the DOJ do not tell you much to my chagrin. In our cases, we always. One of the hardest parts about representing whistleblowers is the lack of information. We don't have a clue what usually is going on. But they, the. If you look at the filing that they just made with the Senate Finance Committee, you will see that most of it is focused on IRS violations, not SEC violations.

Mark Pugsley [01:54:08] This 13F filing issue is really almost an aside for the filing. Can I say one other thing? Is that for those who are listening in the show notes, I asked John to put the phone number for the Senate Finance Committee. And if you are interested in helping, if you're interested in helping this and encouraging the Senate to look into this, maybe even hold public hearings and to. They can also encourage the IRS to go after this and really follow through. One of the ways that you can help is by calling the number that is in the show notes for the Senate Finance Committee and leaving a message.

Mark Pugsley [01:54:48] I don't know if they answer the phone or not, or sending a letter and faxing it. There's a fax number there. I don't think they have an email that we were able to track down. But that's one way you could help David in his quest to hold the church accountable for their conduct.

John Dehlin [01:55:03] Yeah. And the number is 202-224-54515. That's the phone number, 202-224-4515. The fax number is 202-228-0554. And as someone who worked on Capitol Hill, that is a major way, and I'm sure It's true in 2023, that is a major way Senators know that people care is if their phone lines light up, that actually registers as a significant issue. So if everyone, you know, this podcast already has thousands of listeners, if, if the tens or hundreds of thousands of listeners to this podcast all were to call that number and just light up that phone number for days, if not weeks that might have an influence, is that what you're saying?

Mark Pugsley [01:55:50] Yeah, absolutely. Not only that, but if you're in a state and you can track down the number for your senator, local senator, you can actually call their office too, and encourage them to hold the LDS Church accountable for violating the law in multiple ways, as alleged by David Nielsen. And you know that if you're interested in reading the details of how he says they've done that, you can get the 90 page memo that was submitted to the Senate Finance Committee. It's embedded in the Religion Unplugged article.

John Dehlin [01:56:22] Yeah, we're including a link to that as well in the show notes, for sure.

Mark Pugsley [01:56:25] Yeah. Yeah. So. So that will, that could move the bar. Because if they think this is just going to disappear, putting pressure on Congress in various ways, you know, you have listeners all over the country, I'm sure, and if they all. Yeah, and all over the world, and if they can call their, their senators and, and encourage them to take action, that would be super great.

John Dehlin [01:56:44] Okay, listeners, viewers, please do it.

Mark Pugsley [01:56:46] Yeah. Okay.

John Dehlin [01:56:48] One thing we can do now is I can read the church's response and have you respond to the church's response. Unless there's a place you want to go next.

Analyzing the Church's Official Response

Mark Pugsley [01:56:55] No, I think that's helpful and I think, I think the, the main point I wanted to just make is that when, as we're going to talk about this statement, I may have said this, John, and I apologize if I'm repeating myself, but when you settle with the SEC as part of your settlement, you have to agree in writing, the church had to agree when they settled with the SEC that they would not issue a press release that material disputes, materially disputes the findings in the order. So what we just went through all those details, all the involvement of the First Presidency, all of the machinations and the plotting the year after year, deciding again to violate the law, all of that stuff the church has agreed to and they cannot issue a press release without violating SEC rules that materially disputes that.

Mark Pugsley [01:57:49] They can't do it. Right. I can't settle with the SEC and then issue a press release tomorrow and say, hey, that was all and I shouldn't have. I, I didn't mean any of it. Right. You can't do that. You, if you settle, you settle. Now in the settlement, the church does not admit or deny. Right. So there's some language at the beginning of the order we just went through where the church basically says we don't admit or deny these allegations. We're not saying they're Right. But we're not denying them either. So you can't issue a press release that denies them. They can't do it. Yeah, I think they've done that here.

John Dehlin [01:58:23] So you think they violated that spirit of.

Mark Pugsley [01:58:25] I do.

John Dehlin [01:58:25] Okay.

Mark Pugsley [01:58:26] Yeah. Now you can tell us where. When I read it, I'm assuming that they. That they ran this through past their legal team and so we could dispute about it. But. But they, they throw lawyers under the bus. They throw everybody under the bus, and we can go through it. But it's this most ridiculous press release I've ever seen. I mean, it's. So after what we just went through, to then read this press release, you'll make it seem like this was just like, okay, well, let's do it.

John Dehlin [01:58:55] I'll read it. And listen, your job, Mark, is very simple. You pause me at any exact word where you want to make a comment.

Mark Pugsley [01:59:03] Okay.

John Dehlin [01:59:03] And I'll just. I'll remember where I was reading. And then after you've made your comment, I'll. I'll go back to where. Where we were.

Mark Pugsley [01:59:09] All right.

John Dehlin [01:59:10] Is that all right?

Mark Pugsley [01:59:10] Yeah.

John Dehlin [01:59:11] Okay, here we go. This is February 21, 2023. Will Maven will include this in the live stream and in the show notes. This is. And the church may change this, right? I mean, most likely, if this is bad, they'll delete it or rewrite it.

Mark Pugsley [01:59:28] I think they should.

John Dehlin [01:59:29] This is the version that was.

Mark Pugsley [01:59:30] I'd be a nervous if this was out there.

John Dehlin [01:59:32] Yeah, this was. I emailed this to my. I knew that the church deletes and changes things. So on February 21st at 3:43pm I copied the text of this Internet posting and emailed it to myself. So. All right, so as of that time and date, the. The church. The. The church. This is called Church issue statement on SEC settlement. The Church released the following statement on Tuesday, February 21, 2023, the Church of Jesus. And you pause me. All right, Mark. Okay.

Mark Pugsley [02:00:06] Okay.

John Dehlin [02:00:06] The churches, Christ Latter Saints and its affiliated investment manager, Ensign Peak Advisors, Inc. Have settled a matter with the securities and Exchange Commission or the sec.

Mark Pugsley [02:00:18] So. So let me just say this.

John Dehlin [02:00:19] Okay.

Mark Pugsley [02:00:19] Interesting that they called Enzyme Peak a quote, affiliated investment manager, because what they've said in here and the position I understood they took in the investigation of the sec was that inside Peak is not separate, but it's an integral part of the church. This makes it sound like they're basically an outside investment manager, which I think contradicts the conclusions that were in this order in some minor way. I think that's more of a legalistic kind of interpretation. But they had to take the position in order to avoid some of these reporting requirements that inside Peak was part of the church. It's not separate. But here they're saying it's an affiliated investment manager. And by the way, investment advisors have to be licensed by the sec. Investment managers. I don't even know what that is. Anyway, go ahead.

John Dehlin [02:01:05] Okay. Investment managers who oversee a portfolio of public equities above a certain threshold are required to file Forms 13F with the SEC Quarterly. These forms publicly disclose the names of the securities and their values. Right. Okay. We've covered that since 2000. Ensign Peak received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. If you don't stop me, I'm going to stop there.

Mark Pugsley [02:01:42] So that's. Yeah. I mean, what are you going to say about that? Because I have a lot of concerns.

John Dehlin [02:01:46] Well, relied upon legal counsel. That's basically saying the lawyers told us to do this.

Mark Pugsley [02:01:51] This is throwing the lawyers under the bus. Right. We didn't. It was not our idea. The lawyers told us that. Listen, I'm sure they had legal counsel. I'm positive they did, but. And they probably had good legal counsel. But the lawyers, I'm sure, did not tell them to create fake entities and file false 13fs. The lawyers would not have said that. Yeah, no lawyer in his right mind would have been given that advice. I'm sorry, I think they didn't follow their advice. But you notice they said they relied upon it, but they didn't say they followed.

John Dehlin [02:02:19] Yeah.

Mark Pugsley [02:02:20] Okay. Someone wrote that very carefully.

John Dehlin [02:02:23] But they also mentioned while attempting to maintain the privacy of the portfolio. So they're talking about privacy. Is it. I mean, is privacy another word? For what?

Mark Pugsley [02:02:33] Well, I don't know.

John Dehlin [02:02:34] Keeping it secret. Right.

Mark Pugsley [02:02:35] It's a. Yeah.

John Dehlin [02:02:36] You want to keep it secret.

Mark Pugsley [02:02:37] Yeah.

John Dehlin [02:02:38] Were they worried about privacy? Like someone's name, like what funds?

Mark Pugsley [02:02:43] They worried about tithing. No, they weren't. I mean, privacy is in word for it, I suppose.

John Dehlin [02:02:47] Okay. As a result, Ensign Peak established separate companies, or LLCs, that each filed Forms 13F instead of a single aggregated filing.

Mark Pugsley [02:02:58] Yeah.

John Dehlin [02:02:59] Ensign Peak and the church believed that all securities required to be reported were. Were included in the filings by the separate companies. Okay. No problem.

Mark Pugsley [02:03:09] Missing the key point. Which is they were fake. The companies were fake. The companies didn't control the securities. They didn't have it. You're.

John Dehlin [02:03:18] You're.

Mark Pugsley [02:03:18] They were all fake filings. They. Yeah, they. They they created these separate companies, but they never gave autonomy, they never gave control over the portfolio to the company. And that's the key. And that's a part where I think they, I assume that they didn't follow their lawyer's advice. The First Presidency may or may not have had lawyers in the room when they made these decisions.

John Dehlin [02:03:38] And I was taught as a Mormon growing up, there's, there's complete honesty and then there's kind of partial truths or hiding things. But hiding things is, is not complete honesty.

Mark Pugsley [02:03:51] I agree.

John Dehlin [02:03:51] Isn't.

Mark Pugsley [02:03:52] I mean, yeah, well, but you know, the end justifies the means, John. Got to keep the money coming in.

John Dehlin [02:03:56] Yeah, yeah. So it's just not, it's not the, it's not the standard of honesty that I was taught as a Mormon growing up.

Mark Pugsley [02:04:03] Yeah, I hear you.

John Dehlin [02:04:04] Okay. Because they should be admitting that, that this was a ruse. Okay. The truth to be fully accountable and for this to sort of meet. Let's just say we're trying to meet the standards of repentance, which is to acknowledge the sin, to, to confess the sin and then to make restitution and, and forsake the sin. They're not adequately confessing or acknowledging their sin.

Mark Pugsley [02:04:35] True, True. There.

John Dehlin [02:04:36] Okay.

Mark Pugsley [02:04:37] They have it. I mean, compare what we just read with this, this mealy mouth response.

John Dehlin [02:04:42] They should have just linked to the irs.

Mark Pugsley [02:04:44] Yeah.

John Dehlin [02:04:44] Ruling.

Mark Pugsley [02:04:45] Here's what, here's the order.

John Dehlin [02:04:46] He goes.

Mark Pugsley [02:04:48] It's all right there.

John Dehlin [02:04:49] Yeah. But they didn't do that. Okay. In June 2019, the SEC first expressed concern about Ensign Peaks reporting approach. Now, someone had speculated that they're choosing that date of June 2019 so that no one will think that it was David Nielsen or the, or the original whistleblower who kicked all this off.

Mark Pugsley [02:05:10] I, I suppose that could be true. I don't know what, what happened with the sec. There's really no way to know that.

John Dehlin [02:05:17] Okay.

Mark Pugsley [02:05:17] The dates in this, it, it does say that in this order in paragraph 33, that in May of 2018. May of 2018, the public website reported that various entities appeared to have been ties to the Church had filed forms. So the timing of it is odd. I mean, there. I assume that if the SEC did approached the church in June of 20 2019, that that was prompted by this, by this Mormon leaks publication. That's my assumption.

John Dehlin [02:05:50] Which really the credit goes to the original whistleblower.

Mark Pugsley [02:05:53] Right.

John Dehlin [02:05:53] Okay.

Mark Pugsley [02:05:53] Right. Or when. Who knows who the 2015 person.

John Dehlin [02:05:56] Right. The two whistleblowers. Yeah. Okay. Potentially really quickly. I just want to thank. Because our show Depends on this. Pat Ambassador for Truth, gives a super chat and says, thank you, bringing this out to the masses. This will catch fire. Luke 12. Two things hidden will be exposed. That's what Jesus said, apparently. Thanks, Pat, for the super chat. Thanks to all of you who donate. And then my buddy Bo Euler. Hey, Bo. He wants to talk about tax exempt status and religions. We'll try and save that for the end. But, Bo, thank you for the super chat. Thanks to everyone who's donating through super Chats. And Please subscribe to YouTube and to Facebook because that helps so much with the algorithms. Okay, let's get back to the reading. Okay.

Mark Pugsley [02:06:40] Can I just put something in, though? You just wrote. Yeah, well, you just read. Sorry. In June 2019, the SEC first expressed concern about Enzyme Peaks reporting approach. Period. Right. Period.

John Dehlin [02:06:51] Yeah.

Mark Pugsley [02:06:53] There's no date on the second sentence. Enzyme Peak adjusted its approach and began filing a single aggregated report. When did they do that? I don't think they did it in 2019. People have been paying attention to these 13F filings now because of David Nelson's report and the other publicity. When did they start filing the sinkhole aggregated report? I believe it was much later than that. But they carefully left a date off of that second sentence on. When did they start filing the aggregated. I don't know the answer to that myself.

John Dehlin [02:07:24] Well, if you divide 13 by four quarters, you get three years and it's 2013. So I don't know, maybe 23, you mean? Yeah, it's 2023 now. So I mean, maybe some months went by. Is that what you're saying?

Mark Pugsley [02:07:40] Yeah, what I'm saying is I'm not sure.

John Dehlin [02:07:42] By putting the sentence immediately after the June 2019, it seems like they're trying to create the impression that they immediately.

Mark Pugsley [02:07:48] Yeah, but that next sentence doesn't say that. If you read it carefully, it just says, we did that, but it doesn't say when. And from representing these companies when they're being investigated, I can tell you that you don't immediately change your behavior the minute you get a call from the sec. It doesn't work that way. It's a very detailed, long process. And the other thing is, my understanding is that Ensign Peak filed two of those quarters. Not under Enzyme Peak, they filed under different names. And if you look at the public record, you will see that it was only in February of 2020 that they finally put their own name on that filing. February 2020.

John Dehlin [02:08:32] Can I just note, and this may be obvious, nowhere in this statement does it Say we didn't file the 13 Fs for over a decade. Like we shipped two decades. Nowhere does it say we screwed up by not. I didn't read that anywhere.

Mark Pugsley [02:08:49] No, and it also didn't say that we did file some reports, but under fake names with fake managers, and under entities that actually didn't hold any assets.

John Dehlin [02:08:58] So it's totally. It's. It's more cover up kind of stuff. It's deception on top of deception.

Mark Pugsley [02:09:04] Well, they could have said maybe an angel with a flaming sword told them to do it, I suppose, but they didn't say that either.

John Dehlin [02:09:10] Moxie. Little salty.

Mark Pugsley [02:09:11] Okay, it's close. They went to the first Presidency, they went to the Prophet himself and the Prophet said, hide the money.

John Dehlin [02:09:18] Yeah. Okay. Since that time, 13 quarterly reports have been filed in full accordance with the SEC requirements. And that's meaning a single report each quarter. Right. For. For three. Three years and a month.

Mark Pugsley [02:09:32] And that. That report only represents the filings they did make. Finally, belatedly, after all the publicity came out. Their filings they did made only represent a small fraction of their portfolio. It's not the whole portfolio. Yeah, it's just a third of it.

John Dehlin [02:09:46] Okay. Basically, this settlement relates to how the forms were filed previously. What are they trying to say there?

Mark Pugsley [02:09:53] Well, I wish they would have linked to the settlement. Right there.

John Dehlin [02:09:56] Yeah, the.

Mark Pugsley [02:09:57] The order. This order. They don't like this order. They would have. They would have put a link under this settlement. Yeah, because they don't want people to read what we just went through.

John Dehlin [02:10:04] And that's on Brand. The church hides the details, you know, from its members, for that's why I

Mark Pugsley [02:10:10] had to point everyone out to the press release from the SEC in this little link on the side. If you don't notice that link, you'll never find this report.

John Dehlin [02:10:17] Yeah, and we've included it. And we'll include it. Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution.

Mark Pugsley [02:10:30] Of course.

John Dehlin [02:10:30] Okay, last statement before the. The frequently asked questions.

Mark Pugsley [02:10:34] The best right here.

John Dehlin [02:10:35] This is your favorite.

Mark Pugsley [02:10:35] Yeah, this is my favorite.

John Dehlin [02:10:36] All right, everyone, hold on to your. Hold on to your. Ha. That we affirm our commitment to comply with the law, regret mistakes made, and now consider this matter close. Let's take each. Let's take each of those three things separately. So we affirm our commitment to comply with the law. That almost sounds like we always have believed it. Obey the law. His business as usual. We always obey the law.

Mark Pugsley [02:11:01] What are you talking about? We always comply with the Law lot. Well, except for that 20 years. And, and, and except for the part that Monson and Hinckley and all these guys basically told us to. But. Okay, but, but we.

John Dehlin [02:11:13] What's that.

Mark Pugsley [02:11:14] What's that article of faith again. Anyway, but this next. This, this piece, comma, regret stakes, mistakes made. Honestly.

John Dehlin [02:11:22] Okay, wait. We have to. We have to say that the Down H Oaks currently the. The second highest ranking member of the Mormon Church and an attorney is on record as saying we neither seek nor request apologies. In other words, the church doesn't make mistakes. Make make apologies. That's probably what the attorneys have told that he's an attorney. That's probably basic attorney recommendation. Right?

Mark Pugsley [02:11:47] Okay, first of all, John, that's the stupid. I mean it's not even. There's not even a. What's the What's. I. I was. I can't remember all my grammar. But they. This is a not a good sentence. Regret states made. Who regrets?

John Dehlin [02:12:02] It's passive. Passive voice. It's not even mistakes were made. There's no object in mistakes were made.

Mark Pugsley [02:12:07] Yeah, mistakes were made. But the question is by who? But by whom?

John Dehlin [02:12:10] Yeah, who.

Mark Pugsley [02:12:11] Who regrets the stakes made? Does the church regret it?

John Dehlin [02:12:13] But there was a book called Mistakes were made, but not by Me.

Mark Pugsley [02:12:16] Not by me.

John Dehlin [02:12:17] And they probably are smart enough to know that, so instead they rephrased it and said regrets.

Mark Pugsley [02:12:22] We regret our lawyers gave us such crappy advice. I guess they could have thrown the lawyers under the bus again. But. But why don't they say we? They couldn't even include a we, John.

John Dehlin [02:12:32] We.

Mark Pugsley [02:12:33] We the church regret that some mistakes were made by somebody, some minor employee in, in the church office building. We don't know who that person. No, I mean, own it, guys. If you're gonna give a. A ridiculous apology, just put a we in that little piece. Right. We regrets where snakes were made. Or we regret that in plain peak made some dumb decisions. I don't know. But that's just so odd the way they wrote that. And now consider this matter closed, which to me says, okay, members, it's done, it's over with, nothing to see here, move on.

John Dehlin [02:13:06] Yeah, these are not the droids you're looking for. And let's, let's don't talk about this anymore.

Mark Pugsley [02:13:11] Yeah, yeah, it's not a big deal.

John Dehlin [02:13:12] But that's not even true because we know the IRS stuff is still being investigated.

Mark Pugsley [02:13:16] We're moving on. Ah, that's.

John Dehlin [02:13:17] But there could be still be criminal investigations and there could still be.

Mark Pugsley [02:13:21] We're moving on, John. We're moving on now.

John Dehlin [02:13:23] Maybe that's why there was that sentence about, you know, trying to limit or contain what this statement in this settlement refers to. It's not talking about taxes.

Mark Pugsley [02:13:34] Right.

John Dehlin [02:13:34] It's not talking about criminal behavior. And in that sense, maybe they want to say they consider this matter closed.

Mark Pugsley [02:13:41] Yeah, well, okay, fine, whatever. I just think it's the stupidest. I don't know who wrote that, but someone probably wrote we. They probably had a we in there at some point. And then someone in the First Presidency who apparently manages all this stuff said take out the we because we don't apologize. I mean, maybe Dallin Oaks himself intervened and said, take out that we. I don't know. But it's just the worst apology ever. I just, I give them no credit for that.

John Dehlin [02:14:09] Can I. Would you mind if I read an article from Sam Faithful Mormon Sam Brunson, in the By Common Consent blog? He has a really good blog post called the Church the Investment Advisor in the sec. Hasn't he been. Basically been defending the Church this whole time? Or at least sort of like, I

Outside Legal and Academic Perspectives

Mark Pugsley [02:14:30] think when he read this order that we just went through, then he's. He seems to be backing off a little bit. He, he, he.

John Dehlin [02:14:37] Yeah, but I mean, historically.

Mark Pugsley [02:14:38] Yeah.

John Dehlin [02:14:38] Yeah. Can I.

Mark Pugsley [02:14:39] Can I just make one other point about this?

John Dehlin [02:14:41] Yeah.

Mark Pugsley [02:14:41] Semi shitty apology. If you can bleep that. Why did they say mistakes in that sentence? Where's the mistake? I mean, I don't see anything in that order that we read. That was a mistake. It was intentional. Every single bit of was intentional. There was no mistake. It was repeatedly, year after year, brought to the First Presidency for approval. First presidency says keep doing it. Keep concealing it. There's no mistake there.

John Dehlin [02:15:12] This is very. Yeah. The mistake is like, oh, I wrote a B instead of a Q. Let me erase it because I accidentally did something. It was intentional for decades.

Mark Pugsley [02:15:22] Absolutely.

John Dehlin [02:15:23] With forethought. 20 years of intentional while being advised against what they were doing. They overrode advice.

Mark Pugsley [02:15:29] Yes.

John Dehlin [02:15:29] And not only violated the law, but. But recruited others to. To join in that.

Mark Pugsley [02:15:35] If they'd said we, we apologize for breaking the law for 20 years intentionally, then okay, maybe I'd give them some credit, but this is a terrible, terrible state.

John Dehlin [02:15:44] Yeah.

Mark Pugsley [02:15:44] Yeah.

John Dehlin [02:15:45] Okay.

Mark Pugsley [02:15:45] And it's. And it's a cop out. Sorry, I just makes me so mad.

John Dehlin [02:15:48] So, so I'll read. Is it okay if I read?

Mark Pugsley [02:15:50] Just skip down to. Did the Church know that's really the other stuff?

John Dehlin [02:15:54] Oh, totally, totally. Well, you mean in the BCC article?

Mark Pugsley [02:15:59] No, I'll go read that. Yeah. Okay. Okay.

John Dehlin [02:16:01] So again, faithful Mormon Sam Brunson on faithful Apologetic blog. By common consent, there's a way is a tax lawyer.

Mark Pugsley [02:16:12] He's not a securities.

John Dehlin [02:16:13] Right.

Mark Pugsley [02:16:14] Just to be clear.

John Dehlin [02:16:14] Yeah, yeah.

Mark Pugsley [02:16:15] It's not his area.

John Dehlin [02:16:16] So he has a section at the end called what to make of this. And this is his reaction to your concern. He writes, this is Sam Brunson. I've spent a lot of time explaining why the sturm and drang over the EPA's taxes is overblown. And I stand by that with what has been brought to light by the whistleblower and by others, but not with securities law. It's telling that their release the church stated that, quote, it regrets mistakes made. A statement that frankly, as passive as it is, is as close to an expression of wrongdoing as I've ever heard the church make. And that's true. The church doesn't come anywhere close to

Mark Pugsley [02:17:02] par is very low.

John Dehlin [02:17:03] Not even for like the Mountain Meadows massacre does the church say, I'm sorry. They're like, oh, we regret that people got hurt.

Mark Pugsley [02:17:09] You know, why don't we hold them to a higher standard, John? I mean, we can't compare the church against itself.

John Dehlin [02:17:13] That's not fair.

Mark Pugsley [02:17:14] Well, let's, let's read what to reality in the real world world.

John Dehlin [02:17:17] Let's read what the faithful people are feeling, you know, who are in the note. Sam writes, but here's the thing. The church didn't make a mistake. It's not that it was unaware that EPA or Ensign Peak had a filing requirement. EPA informed the top church hierarchs almost immediately that it needed to file 13 Fs. We've already talked about this. But rather than comply with the law, top church leaders, meaning the First Presidency, decided to obfuscate, to stretch the law to or in my humble opinion, beyond the breaking point. It's not that mistakes were made. It's that the church took deliberate action to do wrong. This is a faithful Mormon.

John Dehlin [02:18:01] Okay, and he goes on. He goes on. And how should we as active members look at this deliberate action to do wrong? I don't think there's any way to justify it, and I don't think members should be asked to justify it. After all, we believe in being honest. To receive a temple recommend, we have to affirm that we're honest in our dealings. Seriously, honesty is such a lonely word. He throws in a Billy Joel quote there from the song Honesty. Kudos to Sam Brunson for the Billy Joel reference difference. I Love, that's one of my go to. Oh, yeah, that's what I go to. Karaoke songs is Honesty by Billy Joel.

John Dehlin [02:18:44] And this is Sam Brunson. And in spite of our teachings and belief, the top church leaders chose dishonesty. They chose not only to bend the law, but to break it. Now it's actually, I'm trying to remember, the church just got rid of the prohibition on loud laughter in the temple. Do we know if they got rid of evil? Speaking of the Lord's anointed? Because this is coming a little close to that. And I'm a little bit worried for Sam Brunson's temple recommend because he's basically saying that the church leaders chose dishonesty and to break the law. Anyway, I digress.

John Dehlin [02:19:22] And it's worth noting that since 2019, Ensign Peak Advisors has filed its Forms. 13F. The Church in EPA acknowledged that they had acted wrongly. They fixed the problem and paid the necessary fine. Which leads to the last line of the church's statement. We affirm our commitment to comply with the law. Regret mistakes made. And he bolds the next words now. Consider this matter closed. He's upset. He's bolding this last little five words that you were also not loving. He goes on to write, Sam Brunson, Faithful Mormon Sam Brunson. So here's the thing.

John Dehlin [02:20:02] The church may consider the matter closed, but it's not, says Sam Brunson. This represents a real betrayal to the millions of church members who have worked hard to live up to their standards. To be honest, even where it's hard to obey the law, even where it's inconvenient, it represents a deeply disappointing disclosure to the millions of saints of who have looked to the church as a model for how to act and how to live. Sam Brunson's taking the church to the woodshed. The Mormon Church First Presidency back out to the woodshed and saying, quote, this matter is closed doesn't address that betrayal, that disappointment, that hypocrisy.

John Dehlin [02:20:52] To move forward, the church needs to address its error. Not to the sec, it's already done that, I guess. But to its members, it's to its membership. It needs to explain what went wrong, why it went wrong, how it will ensure it doesn't go wrong again. And I would say, where else has it gone wrong that it did not get caught with its hand in the cookie jar. That might also need to be added to your blog post, Sam Brunson, because wouldn't that be incumbent on the church to say, where else are we deceiving and hiding things. Because this can't be the only instance.

Mark Pugsley [02:21:29] They don't have a compliance department. I mean they have like one guy. I don't think they don't think. They know.

John Dehlin [02:21:33] This cannot be the only instance of the church being decept. Deceptive. Right?

Mark Pugsley [02:21:40] Oh, you're causing me to lose my testimony.

John Dehlin [02:21:43] Members that believe that the church represents a model for their lives for a long time and even in the wake of this news, the church can do that. It can model how to repent and come back from severe errors. But simply paying a fine, then ignoring the harm and I would say not really owning up to its mistakes and then trying to silence everyone to not talk about it anymore is not that model. Church members deserve better. The institutional church deserves better. And I'm guessing the Sam Brunson this won't affect his allegiance to the church.

John Dehlin [02:22:22] Maybe it might not even affect his tithe paying status with the church. And I'm sure the people in the Bible Common Consent blog might continue to keep, you know, supporting the church and all the ways people would support it. So sometimes I wonder, do progressive Mormons other than Jana Reese, as you so kindly noted, do progressive Mormons do anything to hold the church accountable other than to write blog posts? I don't know.

Mark Pugsley [02:22:44] Right. Well. And By Commons Consent, which is a great blog that he writes for, is not well read outside of the liberal Mormon stratosphere. I mean he's a, he's an active member. I've been annoyed to be honest, that that Peggy Fletcher Stack at the Tribune keeps interviewing the guy who really doesn't know this stuff. But.

John Dehlin [02:23:05] And up till now from a tax perspective has kind of been more apologetic.

Mark Pugsley [02:23:09] Sure.

John Dehlin [02:23:10] Saying this there's no big deal.

Mark Pugsley [02:23:11] No. But I give him credit. I mean that's he really takes on the church and I wish he would have that similar. I have the similar response to other issues, legal issues that the church is fighting with. One of them is the sex abuse scandal which I think is boiling underneath the surface of agreements that the church has caused people to sign that won't let them talk about it. I think there are thousands of victims out there and I wish the church would just come clean about the extent of sex abuse in the church that is going on today and do background checks and just deal with the problem. I wish he would address that same criticism on other issues where the church is hiding things too. It's not just their finances that they hide.

John Dehlin [02:23:54] And I don't know how much Sam Brunson gets credit for Courage here or just how outrageous.

Mark Pugsley [02:24:00] This SEC read this order and got pissed off because I listened to his interview with. With right before this came out. It was like two days before. It hadn't come out yet. And he. He was kind of like, yeah, it's going to be a nothing burger. And then he read this and he got pissed. And more power to him.

John Dehlin [02:24:18] Yeah, okay. All right, so I think we've. Now we've. We've addressed the church's general statement. Now we've got the frequently asked questions. Is that okay?

Compliance Failures and Accountability

Mark Pugsley [02:24:27] Sure.

John Dehlin [02:24:27] And I'm not going to read all of it. There's. Who is Ensign Peak Advisors? Is that a problem? Their answer, who is the SEC? What are forms 13F?

Mark Pugsley [02:24:36] Yeah, keep going.

John Dehlin [02:24:37] Did the church know about the practices at Ensign Peak described in the order? Maybe I should read that.

Mark Pugsley [02:24:41] This is a dodge right here. This is a classic oracle dodge. Right?

John Dehlin [02:24:44] So I'll read it. So did the church.

Mark Pugsley [02:24:46] Okay, wait. Okay, think about the question first. Did the church know? Okay. Now the answer.

John Dehlin [02:24:51] Okay. The church's senior leadership received and relied upon legal counsel when it approved of the use of the external companies to make the filings. Right there.

Mark Pugsley [02:25:03] How does that answer that question?

John Dehlin [02:25:04] It's saying that someone else recommended it and then it approved it.

Mark Pugsley [02:25:09] Yeah, they're. They're.

John Dehlin [02:25:10] But they don't have it. No one had. No one had authority to recommend it

Mark Pugsley [02:25:14] or like the First Presidency. Did the. Did the First Presidency know? Well, we don't know because. Well, we know from the SEC's order what that they did, but here they're like, well, they relied on legal counsel, but they don't say yes or no in response to that question. Then they say, then they throw Inside Peak under the bus. This is like a mere functionary. Inside Peak handled the mechanics of the filing process, okay, under the direction of the First Presidency, who they met with yearly.

John Dehlin [02:25:42] Right.

Mark Pugsley [02:25:43] Annually, if not more. And then the last sentence. The church's senior leadership never prepared the paperwork.

John Dehlin [02:25:49] Wait, it says never prepared or filed. I know the specific reports at issue. So. So Russell and Nelson Thomas S. Monson did not actually file the report.

Mark Pugsley [02:26:00] Okay. Oh, great. That's. That answers the question. No, I mean, of course they did. We know they did. The church agreed to this order that the SEC issued. They agreed to all this language and they knew it was happening. And this is just a dodge.

John Dehlin [02:26:15] I mean, that's like. That's like a few months shy of her 14th birthday kind of language. The First Presidency didn't file the. The filings.

Mark Pugsley [02:26:23] Oh, really? They didn't okay. Enzyme Peak did it. Okay. They throw Enzyme Peak under the bus and they throw the lawyers under the bus and. But of course, the senior leadership. Oh, they never filed the paperwork. Well, okay.

John Dehlin [02:26:35] I mean, what they want people to think is these are old men. They're worried about the spiritual well being of the membership. They don't. It's like Phil Hartman's unfrozen caveman lawyer. You know, like my primitive mind can handle these complicated SEC filings. You know what I mean? Like.

Mark Pugsley [02:26:54] Well, and they also didn't say the church directed the senior leadership of the church did direct filing of those reports. That's the point. The church directed it. They year after year approved it and actually told them to do it. They didn't. Yeah, it wasn't like they were acting on their own.

John Dehlin [02:27:11] And the order makes that very clear. Multiple times.

Mark Pugsley [02:27:13] 100. And they also got some random functionaries to act as fake leaders of these, these things. They threw them under the bus too.

John Dehlin [02:27:21] What it's also not saying, and maybe you just said this, but what the, what the order said is that the first Presidency overrode the counsel of the attorneys. That I'm sure of inside Peak.

Mark Pugsley [02:27:31] Very good point.

John Dehlin [02:27:32] It wasn't that they took. Took their recommendations. They overrode the proper recommendations for a couple decades.

Mark Pugsley [02:27:40] Why?

John Dehlin [02:27:40] Until they got their hand caught in

Mark Pugsley [02:27:42] the cookie jar about the money. John, that's. That's.

John Dehlin [02:27:44] Yeah.

Mark Pugsley [02:27:45] If you wonder what drives the first presidency, there's your answer. Yeah, they instructed these guys to violate the law because they were all about the money.

John Dehlin [02:27:52] I mean, Jesus said you can't serve God Mammon. Like, you know.

Mark Pugsley [02:27:55] Yeah, well, okay, yeah. He also, you know, threw up some tables at the temple. I mean, if again my conversation with my mom. Mom, do you think Jesus would really just hoard a hundred billion dollars in the stock market if he was here? Or would he use it and then

John Dehlin [02:28:12] hide and lie about it? Yeah, Yeah.

Mark Pugsley [02:28:13] I mean, seriously, it's just silly.

John Dehlin [02:28:15] Okay. Has the reporting practice that prompted the SEC cease and desist order now stopped?

Mark Pugsley [02:28:23] Yes.

John Dehlin [02:28:23] So it's. So do I need to read that?

Mark Pugsley [02:28:25] At least they answered that question. It's. And then the question is, did they do it voluntarily? Well, no, they did it. That's actually not a bad answer. The SEC expressed concern and then so we fixed it. Okay. That's the same language, I think, in

John Dehlin [02:28:38] the, in the statement. Yeah, it's kind of a copy paste repeat of what was in the first statement. Okay. Did Ensign Peak fail to comply with SEC regulations?

Mark Pugsley [02:28:46] Another dodge.

John Dehlin [02:28:48] Okay. The answer is we reached we. So now it's saying the question is about Ensign Peak. But this is written by the church, not Ensign Peak. And yet it says, we reached resolution with the sec.

Mark Pugsley [02:29:02] But that's not. That's. There's no answer there. Did. Did they fail to comply? They don't say.

John Dehlin [02:29:07] They say we reached a resolution.

Mark Pugsley [02:29:09] And a lot of companies will do that, by the way. Lot of companies will say, well, you know, out of the. We. We didn't want to fight it. We didn't want to draw it out. We wanted to put it behind us, so we settled. That's kind of what they're saying. But they. I wish they would have said yes, because clearly the answer is yes.

John Dehlin [02:29:23] Yeah, absolutely. We affirm our commitment to comply with the law, regret mistakes made.

Mark Pugsley [02:29:29] Same language.

John Dehlin [02:29:30] Same language. And now consider this matter closed. I want to. I want to go after that again, but we'd be beating a dead horse there. Or dead taper.

Mark Pugsley [02:29:38] One of the two.

John Dehlin [02:29:39] Don't want to beat a dead taper. Okay, so next question. When will the penalties be paid? Penalties will be paid shortly to the U.S. treasury. That's pretty straightforward. The church has the money. Where does the 5 million come from to satisfy the settlement? Here's a good one. The investment returns of the church will be used to pay the settlement. In other words, not the tithing.

Where the Settlement Money Came From

Mark Pugsley [02:30:10] The tithing's in there. It's all commingled in accounts. It's the tithing. Tithing was used to pay this settlement, for sure.

John Dehlin [02:30:16] It's like they have a. It's like they have a bank account for tithing.

Mark Pugsley [02:30:20] No, maybe they should have. They should have had it, you know,

John Dehlin [02:30:25] but that's how money works.

Mark Pugsley [02:30:26] No, and that's not what I mean.

John Dehlin [02:30:27] As soon as. As soon as an investment gains a return, the. The funds are commingled. There's no way to, like, hey, Charles Schwab, hey. Fidelity put the return in a totally different account, so the principle remains unchanged.

Mark Pugsley [02:30:41] But they didn't. And David Nielsen's very clear about that. They did not do that.

John Dehlin [02:30:44] Okay, all right. But no tithing was used. That's. That's like not learning, because that was. I mean, that was the Roger. That was the Roger Clark stuff from the beginning. No tithing.

Mark Pugsley [02:30:56] Right.

John Dehlin [02:30:56] You know, David Nielsen saw that, you know, that the church was declining. And this is James Huntsman's point, is that everyone in the world was told that the City Creek Mall was not built with tithing dollars. The presiding bishopric stated that. And yet David Nielsen knew from his Insider information, the inside peak, that tithing dollars absolutely were used.

Mark Pugsley [02:31:20] And the crazy part is that's one of the only things the money was used for. I mean, honestly, what. What is it good for having $100 billion if you don't use it for something? Oh yeah, they build a temple with it. I don't care. But you built a mall. Okay, that's your choice.

John Dehlin [02:31:35] Yeah, okay. I mean, I guess the church had all these, once upon a time, had all these commercial ventures like Beneficial Life. And I don't know if those were like almost like mafia front companies so that the church could claim that if it had to spend money on something, that it came from their commercial interests, not from tithing. But even then, those commercial interests would have been bought by tithing or investments.

Mark Pugsley [02:32:03] My understanding, and I'm not a historian, but my understanding is that they did that because back in Brigham Young's day, they wanted ZCMI and some of these companies to be all self so that people brought their business to church owned enterprises. So they set them all up. Then they, of course, had Deseret News as a fact of matter, mouthpiece of the church, which it still is, maybe more so now than it was in those days. I mean, it's clearly propaganda. Not a church, not a magazine, or not a newspaper.

John Dehlin [02:32:26] Okay, we're almost done with the Q A. How are the Church's reserves invested? Following the principle of preparing for the future, both near and long term, and very long term, I'll add as a joke. The Church maintains diversified reserves, including stocks, bonds, commercial and residential real estate, and agricultural properties. All funds are invested solely to support the Church's mission. Any response there, Mark?

Mark Pugsley [02:32:51] Well, yeah, but isn't the. What is. What is it that those stocks and bonds are serving? My recollection from Sunday school is a threefold mission of the church is to

John Dehlin [02:33:02] protect, proclaim the gospel, perfect the saints, and redeem the dead. And I think they tweaked that.

Mark Pugsley [02:33:07] Yeah, but which one of those three are. Is money necessary for. Yeah, I don't think any. I mean, they don't even use their funds to send missionaries on. Why don't they send all the. Why don't they tell missionaries you don't have to pay for your mission anymore? We gotcha, right? We got a lot of money here. We're good.

John Dehlin [02:33:21] Or byu. Free tuition for everybody.

Mark Pugsley [02:33:23] Yeah, do it.

John Dehlin [02:33:24] Or like, we don't need your fast offerings. Whoever needs money or the rent paid, we could cover that. Or.

Mark Pugsley [02:33:30] Or if you want food from the bishop storehouse, you're good. Don't come. Don't. You don't need to work. Just come on in and we'll get you something. I mean, in that case, I think those funds would be used to support the church's mission.

John Dehlin [02:33:42] But, I mean, in fairness, the church believes in self sufficiency and they don't believe in the dole. That's Ezra. And I'm sure legacy response.

Mark Pugsley [02:33:49] But what in building a mall, which of the threefold mission of the church does the mall come associate with?

John Dehlin [02:33:56] Or the beneficial life bailout.

Mark Pugsley [02:33:57] Or the beneficial life bailout.

John Dehlin [02:33:58] Yeah, okay. All right. Yeah. So that's not true. Why did this settlement take place? Now, that's interesting. We have worked with the SEC for years to come to this settlement. We have reached resolution and chose not to prolong the matter. In other words, they're saying, we could have fought this. Oh, yeah, we could have fought this. We could have won. But we benevolently decided just to kind of.

Mark Pugsley [02:34:22] We moved on. You should, too.

John Dehlin [02:34:25] Finally, will the settlement impact Ensign Peak's ability to continue to make investments? The answer? No. With the announcement of the order, the matter is closed.

Mark Pugsley [02:34:36] That's true.

John Dehlin [02:34:36] It's basically saying business as usual.

Mark Pugsley [02:34:38] Yeah, yeah, yeah. Except for now. You all know we didn't want to tell you, but David told you. And in a way, I think if you asked Enzyme Peaks people, I'll bet you if you could get them to be honest about it, they would say David Nielsen did them a big favor because this was frustrating and awkward and difficult for them for many years. And so finally, it took someone with the bravery and the honesty of David Nielsen to get the word out. And now, yeah, there's fallout. And, yeah, people maybe are not paying tithing, but they. David did him a big favor. They should. They should thank him because now it's enabled them not to have to operate illegally anymore.

John Dehlin [02:35:21] Yeah, okay. All right. And I just want to make a big shout out to this new thing called the Widow's Might Report. Have you heard of that?

Mark Pugsley [02:35:30] No.

John Dehlin [02:35:31] So there's a. A secret undisclosed committee of people who care about accounting and finances and who have published this really excellent report about all of these matters and the church's finances. They even go into how, like the breakdown of the church's stock investments and their portfolios and. Etc, we're going to be doing a Mormon Stories episode on the Widows Might Report, and I just want to give a shout out to it, not only to let people know we're going to be talking more about this in an episode in the weeks Ahead.

Mark Pugsley [02:36:03] Is that the URL?

John Dehlin [02:36:06] I will. I will quickly Google the URL so that we can include it in the show notes, but I just want to give a shout out to the widow's might people and give everyone a heads up that that's coming. Okay, so now we've responded to the church's PR piece. Now, did you tell us how that violates the spirit of the order and the end of the resolution? Do we already cover that?

Mark Pugsley [02:36:27] I mean, I. It just seems to me that by contradicting the order in particular when they say that, you know, we didn't. We didn't. We relied on legal counsel when it approved the use. First of all, that's not. Yeah, that doesn't seem to be true. And Inside Peak handled the mechanics of the filing process. That may be true, but really kind of misses the point. The church leadership never prepared to. Me, I mean, I don't know. I think this was very carefully lawyered to get this language to be, you know, not violating. But I do feel like this is pushing back on things that shouldn't be pushed back on. They should be honest with the members and say, yeah, we messed up. And that's what I would like to see. But of course, don't hold your breath.

John Dehlin [02:37:13] Yeah. Okay. I just included a link to the widows might report in the comments of the live stream. They'll also be in the show notes. Ryan Bunker, thank you for the super chat. He wrote, just found your channel. Love your content. Keep up the great work. Thanks to everyone who's donated today or who will donate today. Please also subscribe to our YouTube channel. Those subscriptions make a huge difference. Okay, so we've kind of reached the end of the outline that we put together. I do want to ask what of David Nielsen? Like, what? And what do we have to look forward to in the future that we can talk about?

David Nielsen's Whistleblower Award

Mark Pugsley [02:37:52] Yeah, I mean, I'm not here to tell David's story. He's a friend.

John Dehlin [02:37:55] Oh, no, no. Whatever's allowed to be talked about.

Mark Pugsley [02:37:58] Okay. So I can tell you generally in the process that David will receive, I assume, some money as a result of this settlement, much to the chagrin of the church. I'm sure it drives him crazy that he's gonna get a good payment from this. It will be significant. And I'm happy for him that he gets that from the whistleblower award.

John Dehlin [02:38:18] So maybe. Maybe a couple million after legal fees

Mark Pugsley [02:38:22] and everything lower than that. But. But if he gets a. You can do the math. If he gets a 30 award, which was the is the highest. 30% of 5 million is 1.5. 1.5. And so he'll. His lawyer will take a piece of that. He'll get around a million dollars and half will be taxed, like 20 cents by the end of the day, but. Yeah, it'll be taxed. Yeah.

John Dehlin [02:38:42] Do you know if whistleblower awards are taxable? Yes, they are.

Mark Pugsley [02:38:47] Yes.

John Dehlin [02:38:47] So he'll have this huge windfall all at once, which means he'll be in the highest tax bracket. 40% are going to go to the IRS. But then we have to think about the fact that he had to quit his job to do this and any. I don't. I guess we don't want to talk about whether he's employed or not or, you know, that'll be speculation, but it has. And how much time and energy and anguish has he and his family endured as a result of this?

Mark Pugsley [02:39:12] Of being named publicly, being outed publicly, which most of my clients are never known to the public on who they are?

John Dehlin [02:39:18] Certainly he would have lost friends and relationships, and this would have. I mean, I'm guessing this couldn't have been great for his relationship with Lars,

Mark Pugsley [02:39:24] his brother and his family. Yeah, I mean, his. I just think it's brutal, and I hope that he gets an opportunity to tell his story. Yeah, this will be some financial support for him. But to be honest, I can. I've said this before, and I'll say it again, John, My, My opinion is David was never motivated by money to do this. He wanted to do the right thing. He lost his testimony while he was working at Ensign Peak. That's a hell of a thing to be a church employee. You've had people on that are losing. Have lost their testimonies while they're employees.

John Dehlin [02:39:55] Byu.

Mark Pugsley [02:39:56] Yeah. Yeah. It's tough. And he worked there and, you know, you could. He'll tell the story of how he. Why he left and the conversations he had with his boss, because I don't think he wanted to leave. I think he would have preferred to stay, but, you know, the. They didn't. They. They made the decision for him. And it's a tough story and, and I. But again, David lost his testimony in part because of the illegality of what was happening at the company. That at Ensign Peak he saw what was happening. He saw how massive the chain the, the failures were, the compliance problems, they're failing to file, all these different laws, IRS laws, SEC laws, and other things, and he just was offended by it. That's what drives him, is he wants to do the right thing. I wish the church had an ounce of the integrity that David, David Nelson has.

John Dehlin [02:40:45] Yeah, yeah. There's this, there's this saying, you never want to see how the sausage gets made. And when you go to Capitol Hill, I saw how the sausage gets made in terms of legislation. It's not Jimmy Stewart, Mr. Smith goes to Washington level stuff.

Mark Pugsley [02:40:59] It's.

John Dehlin [02:40:59] Or maybe it is because that's all about corruption. But yeah, so many people, when they go to work for church headquarters, lose their testimony. Only a fraction of them are actually, you know, have the luxury of leaving their employment because for many people, they don't. They're going to be screwed because how employable will they be?

Mark Pugsley [02:41:19] Yes, right, absolutely. And, and what about the flunkies that had to manage these fake LLCs that the church kind of threw under the bus, saying, you know, those, those guys, you know, it wasn't. Wasn't the church leadership that did this. It was these Ensign Peak people that filed those reports and, and these people that signed those reports. I mean, this is infuriating. Those poor people are church employees who are trying to do the right thing, who are trying to, you know, they think they're working for God's own investment manager, I guess. I guess. Does God have an investment manager? And that's what they thought they were doing. They thought they were doing God's work and doing these failing. These fake reports. And what does the church do is it points the finger at those guys is filing the ones that filed the report. So it's, that's infuriating. I feel for those guys.

John Dehlin [02:42:04] I would love, obviously, I'd love to have David Nielsen on Mormon stories. Hopefully he can do that someday. Any of those dudes who were signing those fake reports who resigned in protest

Mark Pugsley [02:42:13] when they found out you are.

John Dehlin [02:42:14] I'll, I'll, I'll show up at 2am to interview on Mormon stories. All right, so. So David will get a reward.

Mark Pugsley [02:42:24] Yes.

John Dehlin [02:42:25] Hope it would be great if other of the whistleblowers will get something, but we don't know.

Mark Pugsley [02:42:29] Hard to know.

John Dehlin [02:42:31] And then, and then there's still the IRS stuff that hasn't been ruled upon yet. That could be more of a windfall for David or others.

Mark Pugsley [02:42:40] Yes. And I wouldn't call it a windfall. I mean, if you look at this report that he wrote and you look at the amount of detail that he and his lawyers put in, I can tell you that it takes months to report something, to write something as detailed as they did. Months and months and months. So he, he has put in a huge amount of effort here to try to document and bring forward what. What actually happened. And it's a, It's a thankless task to be a whistleblower. If anyone thinks that whistleblower is just free money, I have a, you know, give me a call sometime and I'll explain how difficult the process is.

Mark Pugsley [02:43:14] It's brutal on your family, it's brutal on you, your. Your mind. You know, people go into depression, people go into bankruptcy waiting for some award that may or may not overcome. It's a very, very difficult process. And I don't. I don't. It's hard. And. And I represent them. That's all I do.

John Dehlin [02:43:31] Yeah. And, you know, I know some dudes who manage hedge funds around the Wasatch front. If, If David had simply just not been a whistleblower, left and used the fact that he worked for Ensign Peak and used the fact that he used to work for the church, you know, like some people do, to then get really wealthy people to invest in his new hedge fund instead of become a WE whistleblower. He could have made a lot more than, you know, 40% of 1.5.

Mark Pugsley [02:44:02] Yeah.

John Dehlin [02:44:02] The public.

Mark Pugsley [02:44:03] If his confidentially had been. Confidentiality had been maintained, not only would those hedge fund people not know, but the church itself wouldn't know. The church, they might suspect, but the church is not supposed to know who the whistleblower is. The, the companies. When you're a whistleblower, you're supposed to be confidential. And the company doesn't know. They usually try to figure it out.

John Dehlin [02:44:23] But, but so really quick, thanks to Cameron Terry for the super chat. Thanks to everyone who's donating. Please subscribe on YouTube. Really quickly, is there anything we want to say about Lars Jensen, David Nielsen's brother, or do we want to avoid that conversation?

Mark Pugsley [02:44:38] I don't want to talk about him. I mean, he had his 15 minutes.

John Dehlin [02:44:42] It's over. Okay.

Mark Pugsley [02:44:45] And I just.

John Dehlin [02:44:46] Because my understanding and I, you know, I obviously have a story about David and Lars. Maybe I'll save that for David's episode if he ever comes on. But my sense was Lars wanted some of that, you know, wanted some of that whistleblower money. I don't know if that's true.

Mark Pugsley [02:45:01] Yeah, well, who knows?

John Dehlin [02:45:03] Okay.

Mark Pugsley [02:45:04] And I just, I. I always want to say that. The team representing David Nelson includes a formal former regional director of the sec, Walter Jospin, more than one federal criminal prosecutor, former IRS criminal investigative agents, another former IRS official, former IRS official, and an international tax lawyer, all with decades of experience. So this is the team that's filed this report, is very experienced, all mostly former regulatory staff who know what they're doing, and they are working very hard to get that IRS case, which could be huge, across the finish line. But I can tell you from my Washakie case that IRS cases take a long time. They're very slow. And the average, just to give you some idea, the average, according to the IRS whistleblower office, right now, the average time from filing to collection of an award is 11 years. So you think about that. It's a long, slow process.

John Dehlin [02:46:05] Yeah.

Mark Pugsley [02:46:06] It's brutal. And then that needs to change. By the way, I don't endorse that at all. That's a preposterous delay.

John Dehlin [02:46:11] Yeah. Okay. All right. Anything else we need to say about the church and this. This issue and. And the future, the church's finances and other whistleblower claims indictments for criminal indictments, you know. Anything else?

Closing Thoughts and Future Implications

Mark Pugsley [02:46:27] Yeah, I won't make any predictions, but I'm happy to come back on and chat anytime. And. And let me just say that if there are people that are listening, I'll put in my. My plug. That if there are people listening today that invested in some sort of investment scheme through someone in their ward or their parents got involved in something that claims, you know, returns of 30, 40, 50%, give me a call. Because you're in a Ponzi scheme, and those kind of deals just are not. They're too good to be true. And we'll help you bring that to light and hopefully recover some of your money, because that happens all over Utah right now.

Mark Pugsley [02:47:06] And I don't care if it's. It doesn't have to be securities. It can be crypto. It can be gold trading. Gold or silver. There's a case, restrare coin, one of the biggest Ponzi schemes in Utah history involving silver trading. If you're in something that sounds odd and you're not, and it doesn't seem like it's normal, give me a call. Let's chat about it. And if necessary, we'll stop it. Because every day, these Ponzi schemes in Utah. Utah has three times the national average in Ponzi schemes, three times higher per capita than any other state. And these things are victimizing our parents and our uncles and aunts and our siblings and our kids, and they need to be shut down.

Mark Pugsley [02:47:50] And that's what I do. And I take. Great. I have a really fun job. I get to, you know, I get to help people bring this stuff and shut it down before more people lose money. And it's happening all the time.

John Dehlin [02:48:02] So I lost money in Celsius.

Mark Pugsley [02:48:03] There you go.

John Dehlin [02:48:04] Can you help with that?

Mark Pugsley [02:48:05] Well, that's a big one. So did everyone else.

John Dehlin [02:48:08] All right.

Mark Pugsley [02:48:08] Stay out of crypto. That's my advice.

John Dehlin [02:48:10] Oh, really?

Mark Pugsley [02:48:10] Yeah.

John Dehlin [02:48:11] Okay. All right. Okay. Yeah. So I just shared a link to Mark's law firm.

Mark Pugsley [02:48:20] Oh, thanks.

John Dehlin [02:48:20] We are happy to support. We are happy to support people who are doing good in the world. It's Pugsley P G S L E y Wood. Pugsley wood.com. and, you know, please reach out to Mark if you need help with MLM that you've been sucked into.

Mark Pugsley [02:48:39] Yeah, MLMs are hard because they're legal. That's the problem. But.

John Dehlin [02:48:43] But, you know, anyway, Ponzi schemes.

Mark Pugsley [02:48:45] Ponzi schemes. Things where the returns that you're getting are ridiculous and there's no. No apparent business underneath. That's what a Ponzi scheme is. That's all. That's our other podcast we did a while ago.

John Dehlin [02:48:56] Okay. All right. And I just want to thank everyone who commented today, everyone who shared their comments, and of course, everyone who donated through super chats. Please, everyone. Oh, what about Jon Huntsman's. So I. I texted John Huntsman. Sorry, James. James Huntsman. I texted James just a day or two ago. It sounds like the appeal is going to have a ruling within the next month or two.

Mark Pugsley [02:49:22] Yeah, I've heard any. Every. Any day now. So, yeah, that's. That could be interesting. I don't.

John Dehlin [02:49:27] That's another fraud case against the church.

Mark Pugsley [02:49:31] Essentially, he's asking for the church to give him his tithing money back. I think. I don't know much about it. I've read it. I think it's a. I think it would be fantastic if he won. I'll just say that.

John Dehlin [02:49:44] Yeah. And then there's the Boy Scouts.

Mark Pugsley [02:49:46] You know, the sexual abuse stuff is. The scandal that hasn't happened in the. The church. I mean, it's royal. The Catholic Church, you know, parish after or whatever their. The districts. I forget what they're called. I mean, parishes there. I mean, it's just like one after another after another. And they. My personal view is that the amount of sexual abuse that occurs in the LDS Church is as significant as any other church. We have a tremendous amount of sexual dysfunction in the church because, as you know, as a therapist, sexual repression inevitably leads to sexual dysfunction. And it's going on all over the place. And what the church does is when they hear about them, they Settle.

Mark Pugsley [02:50:23] They shut them down before they even get filed. And then they have them sign a. Pay them a bunch of money right out of those same funds, tithing funds, and they put them under confidentiality agreements. So that. That is just. It's under the. Under the. It's all under the table right now. And I think eventually that's all going to come out.

John Dehlin [02:50:42] Okay.

Mark Pugsley [02:50:43] Yeah, I hope so.

John Dehlin [02:50:44] So much scandal.

Mark Pugsley [02:50:45] Yeah. Why don't we do background checks on people? How about that?

John Dehlin [02:50:48] Yeah.

Mark Pugsley [02:50:49] How hard would that be?

John Dehlin [02:50:50] Yeah, it's. It's a miracle that religions survive these days. But they still do. They're. They're resilient.

Mark Pugsley [02:50:55] Well, I don't know. I mean, they're on the ropes and totally the number of people that didn't go back to church after Covid is massive.

John Dehlin [02:51:03] But the thing is, is the church doesn't need them anymore. Like, just like Scientology, the church is richer than Heavenly Father at this point, and it's. And it's going to be doubling its money every. What?

Mark Pugsley [02:51:14] Well, all the. I don't know the number, but. But you know, they're saving it for some rainy day. And I just am waiting to see what. What exactly.

John Dehlin [02:51:22] We'll be talking about this in the widow's might.

Mark Pugsley [02:51:24] Yeah.

John Dehlin [02:51:24] Report. But like within 40 to 50 years, the church will be a trillion dollar organization.

Mark Pugsley [02:51:29] Oh, yeah.

John Dehlin [02:51:30] Easy without. Without any members.

Mark Pugsley [02:51:32] No, no.

John Dehlin [02:51:33] Without anyone donating one more dollar. Donating one more dollar. Tithing.

Mark Pugsley [02:51:36] Not a penny.

John Dehlin [02:51:37] Yeah.

Mark Pugsley [02:51:37] They don't need it.

John Dehlin [02:51:38] Yeah. So the church doesn't need members. Not only does the church not need tithing, it doesn't need members except to clean the toilets. Apparently they need members for that and to be missionaries. Service senior missionaries and young missionaries.

Mark Pugsley [02:51:52] John, missions are not for converting other people. They're for converting the missionary.

John Dehlin [02:51:56] Oh, yeah. Yeah. Okay. So. Yeah. So that's a weird. Like there's a. There's someone. You know, somebody says this is just too much money for anyone to have. Like, like, I mean, just sort of taking out our criticism and are like, I. Okay, I know we're wrapping up, but you're. You're. You're. Russell and Nelson. You're down a. Jokes. You're sitting on. I mean, we'll talk about this in the Widows might report. But you're sitting on a couple hundred billion dollars.

Mark Pugsley [02:52:29] The largest portfolios on earth.

John Dehlin [02:52:31] Yeah. And we'll cover that in the Widows might report. What do you do with the money? Like, you don't just hand it out on the street. It's hard. It turns out it's really hard to do good. You know, there's this, you know, of like dropping, you know, food supplies with parachutes into Africa. Warlords will take it and sell it and then buy guns.

Mark Pugsley [02:52:52] Like it is hard.

John Dehlin [02:52:53] It's not easy.

Mark Pugsley [02:52:54] You know who does a good job is the Gates Foundation. There are other, there are other foundations out there that are very good at doing that. The un, the Red Cross, the Red Crescent. There are organizations that can take this money and would do anything. There's LDS organizations. There's one. What's the one that helps kids in, in South America. You know, they're run by good church members who could, who could really use the money. I'm on the board of a, of a non profit called Globus Relief. They send medical supplies throughout the. The world. They could use the money. You know, the church could be much more generous in donating. But again, what would Jesus do with a hundred billion dollars, John?

John Dehlin [02:53:35] Yeah.

Mark Pugsley [02:53:36] You know, what would he do?

John Dehlin [02:53:37] Or two.

Mark Pugsley [02:53:37] He wouldn't sit on it. Yeah, I can tell you that.

John Dehlin [02:53:39] Yeah. Yeah. Okay. This has been amazing. Mark, really quickly, are there any episodes you and I still need to do? Like the Nicola story is fascinating. Do you want to tell that or.

Mark Pugsley [02:53:51] I can tell it if you want. I mean, I. It's a fun story, but the.

John Dehlin [02:53:55] And it's a Mormon story.

Mark Pugsley [02:53:56] It's a Mormon story. And the thing that I think that I didn't really get into in our last podcast because I've. My thinking has evolved a lot on it is the question I get asked the most is why is fraud so much more prevalent within the Mormon context? Everyone asks me that constantly. Why? And I, I have developed some new theories about it because based on my interviews with people who are victims of these frauds and what they tell me, and I think we could talk a little bit about that is because I think there's a really perverse psychology in the church about trust. It's not naivete.

Fraud Patterns Targeting Church Members

Mark Pugsley [02:54:31] People in the church are well educated, they have MBAs. It's not about being stupid. It's that they somehow let down their guard when it's another church member and when they think that the money's going to be used for good in some way and it's extremely dangerous. And, and your parents, and my parents and everyone listening, their parents are all going to be vulnerable to that guy in their ward who seems like the best guy but has this thing that is they really need to know about. And wouldn't this be great if you could earn all this money to support your children on missions. That pitch happens all the time. And then the money's gone.

John Dehlin [02:55:10] So that means more. Mark Pugsley on more My Story.

Mark Pugsley [02:55:13] I don't know, John. I'm happy to talk. I. If people Google my name, they'll see that I talk a lot. So I've done lots of interviews. I've done lots of things. But it's fun and it's. I'm very lucky. Let me just say this. I'm. As a lawyer, I spent a lot of years defending bad guys and it drove me nuts. I couldn't do it. And so I switched and I began representing plaintiffs in certain types of broker dealer cases and then doing whistleblower work. And I have to say, I feel like I'm doing God's work. You know, I really do.

John Dehlin [02:55:41] I feel that I really.

Mark Pugsley [02:55:43] It's kind of fun.

John Dehlin [02:55:44] I relate. Mark Pugs.

Mark Pugsley [02:55:45] Yeah. Yeah, you do. Yeah, exactly.

John Dehlin [02:55:47] That's beautiful. Okay. And if we're going to leave people with what they can do, call. Call those Senate numbers that are in the description.

Mark Pugsley [02:55:55] Yeah. And encourage them to do something and get on. Tell the IRS to get on it.

John Dehlin [02:55:59] So call your senators. Call the Senate, Senate Finance, Finance Committee. Write your senator.

Mark Pugsley [02:56:05] Yeah.

John Dehlin [02:56:06] That's something immediate you can do. Share this episode with as many people as possible and. Yeah.

Mark Pugsley [02:56:14] And if you have family members that think that the church didn't do anything wrong, you know, send them that SEC order. Let them read it for themselves, because that's an order. The church agreed to and admitted that the First Presidency did it all. I mean, that's so. That is so important and it really has been missed by all the press.

John Dehlin [02:56:31] So there needs to be a letter. A letter. Letter from an SEC settlement.

Mark Pugsley [02:56:36] Yeah. I just think if you just read it, it's pretty obvious in there that this was all directed by the First Presidency. I mean, that's kind of. That's got to be destabilizing to people's testimony. Hopefully, I think.

John Dehlin [02:56:45] I mean, not hopefully, but like, like,

Mark Pugsley [02:56:47] huh, Wait, you had a choice and you chose what?

John Dehlin [02:56:50] It's certainly something people should care about. All right, Mark, you're awesome. You're a treasure. Thanks, John. Thanks for coming on Mormon Stories.

Mark Pugsley [02:56:56] Thanks for having me. It's fun to do.

John Dehlin [02:56:57] Yeah.

Mark Pugsley [02:56:58] All right.

John Dehlin [02:56:59] And just thanks to everyone who's joined us today. Thanks for the super chats. Thanks for following us on YouTube. We're at 120 plus thousand subscribers on YouTube after only being at 100 like a month ago. Somehow our growth rate has increased. The larger we've gotten, which is really crazy. But we're grateful. Please continue that by subscribing.

John Dehlin [02:57:19] The core of what we do at the Open Storage foundation relies on your monthly donations. So if you value this content, if you want to see it continue, please go to MormonStories.org, click on the donate button. Become a monthly donor. It's tax deductible in the US we're transparent in our finances. We do file an annual 990, unlike the church and Peak Advisors. And literally we try and spend every possible dollar we can on the mission of the Open Storage foundation, which is informed consent for Mormons and the rest of the world helping people through faith transitions and help people build beautiful big lives if they need to, outside the LDS Church.

John Dehlin [02:57:56] So please support us if you can. We lose donations every month because of haters, because people get bored or lose interest or fall on financial hard times. So if we don't have you step up, stepping up to replace the the monthly donors we lose, then we have to start cutting services or eventually shut down. So please support us if you can. Love to David Nielsen and his family, all to the other two secret whistleblowers out there. Love to you as well. Love to the securities and Exchange Commission,

Mark Pugsley [02:58:26] Paul Feint, who who investigated this bravely? A Utah guy.

John Dehlin [02:58:29] Yeah. Oh, really?

Mark Pugsley [02:58:30] Yeah.

John Dehlin [02:58:30] Oh, did we talk about that?

Mark Pugsley [02:58:32] I don't know if he's lds, but he is in Utah. Salt Lake City. Paul Feint is the SEC lawyer who did this case.

John Dehlin [02:58:38] He's a Utah guy.

Mark Pugsley [02:58:39] Brave guy.

John Dehlin [02:58:39] Shout out to that guy. Yeah.

Mark Pugsley [02:58:40] Yeah.

John Dehlin [02:58:41] All right.

Mark Pugsley [02:58:41] If he's listening, shout out to to Paul. He's a good guy.

John Dehlin [02:58:44] Yeah. And yeah. And let's just all be good to each other. Let's be kind to each other. And we'll see you all again soon on another episode of Mormon Stories podcast. Take care, everybody.

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