On July 31, 2012 Schaap was fired "due to a sin that has caused him to forfeit his right to be our pastor". Schaap reportedly admitted to deacons of the church that he had an adulterous affair with the young woman, who was 16 years old at the time. Since 16 is the age of consent in Indiana, sex with the girl would not have constituted statutory rape. The case was turned over to the Lake County Sheriff's Department (Indiana) for investigation.

In September 2012, Schaap was charged in a U.S. District Court for taking a minor across state lines to have sex with her and has signed a plea agreement. In January 2013, Schaap asked the court for the minimum 10-year sentence, claiming he was under great stress, exhausted and depressed at the time of the relationship. In a sentencing memorandum, prosecutors revealed that Schaap "groomed" the girl, including kissing the victim during counseling and had sex with her in his office.

In March 2013, Schaap was sentenced to 12 years in federal prison for having sex with an underage girl. After the affair was revealed, First Baptist Church expelled the girl, an honor student, from the church-operated school and asked her family to leave the congregation.

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