Separation of Church and State Doesn't Give Religious Organizations a License to Criminal Activities
The Bible teaches the separation of church and state in the New Testament. However, it doesn't mean that the Church has no right to criticize the state for its shortcomings (such as John the Baptist criticizing Herod Antipas' adultery and Paul talking to King Herod Agrippa II in the Book of Acts) and it doesn't exempt any religious institution from submitting to authorities either (Romans 13:1-7).
What is the separation of church and state mean? this is what "All About History" says about it:
The constitution states, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." Both the free exercise clause and the establishment clause place restrictions on the government concerning laws they pass or interfering with religion. No restrictions are placed on religions except perhaps that a religious denomination cannot become the state religion.
What does Romans 13:1-7 have to say about the principle? Here's what it says and this doesn't exempt the Church from following it:
1 Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained of God. 2 Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation. 3 For rulers are not a terror to good works, but to the evil. Wilt thou then not be afraid of the power? do that which is good, and thou shalt have praise of the same: 4 For he is the minister of God to thee for good. But if thou do that which is evil, be afraid; for he beareth not the sword in vain: for he is the minister of God, a revenger to execute wrath upon him that doeth evil. 5 Wherefore ye must needs be subject, not only for wrath, but also for conscience sake. 6 For for this cause pay ye tribute also: for they are God's ministers, attending continually upon this very thing. 7 Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.
That means that the government will not only have the right but the duty to crack down on religious institutions that fail to comply with laws and morals. It wasn't a violation of church and state when the late Jack Hyles' and the late Tony Alamo's pulpits were raided for sexual immorality. It's not a violation of church and state when prosperity gospel preachers like Jim Bakker got arrested. It's not even a violation of church and state to investigate and move against KAPA Ministry in the Philippines or cult leader Apollo C. Quiboloy for their financial issues. Don't criticize the Vatican for its history with dirty money if you support pastors or churches that run investment scams. The prosperity gospel is nothing more than a sham that makes pastors rich. Pastors should be living simple lives and not living in the lives of wealth. Don't criticize the Pope for having a papal plane or papal helicopter if you support a pastor who has a helicopter or private jet!
Christians are required to comply with duty as law-abiding citizens unless the state orders them to defy God's laws. Acts 5:29 says that we ought to obey God than men while it doesn't dismiss human authority. It doesn't mean that the state has no rule over religious organizations. A religious organization that runs a financial scam den fails to comply with Romans 13:1-7. The government is given the duty to enforce the law. Christians are given the duty to submit. Remember that the Apostle Paul wrote it during the time of Emperor Nero who was a known hater of Christians. He never encouraged Christians to rebel and neither did Christians plan to overthrow the said tyrant.
The relationship itself is pretty much simple. The church though there's no state religion will have the duty to criticize the state for its shortcomings. The state itself will have the duty to apprehend any religious organization that becomes an endangerment to the public and its members. A pastor has the duty to criticize a government that legalizes immorality. The government has the right to arrest a pastor and his flock who are guilty of immoral activities. It's all about having a two-way street submission for both church and state.