One con man undermines an Edmonton church's prosperity gospel

A good name is rather to be chosen than great riches, and loving favour rather than silver and gold. Proverbs 22:1

Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven. Proverbs 23:5

But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition.
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. I Timothy 6:9-10

Cal Switzer, goatherd pastor of Victory Christian Center in Edmonton for the last 30 years, is a typical graduate of the notorious Rhema Bible Training Center in Tulsa, an institution founded by Word of Faith heretic Kenneth Hagin (which may explain why Pastor Cal spells "center" the American way). It seems that Pastor Cal's prosperity gospel message has run into a roadblock lately. As reported by Brent Wittmeier of the Edmonton Journal, July 22, 2012:

EDMONTON - Positive messages abound at the bright and clean Victory Christian Center.

On Sunday morning, the screen inside the spacious white sanctuary at 11520 Ellerslie Rd. lights up with the church’s vision, paraphrased from the Gospel of Mark: “Build a dream with love … produce a harvest beyond your wildest dreams.”

Following praise songs and announcements about backpack giveaways and a kids’ slide at Capital Ex, pastor Calvin Switzer paused during his sermon to discuss “some reports that came out this week” that there have been financial wrongdoings against the church. Lawyers are making “supernatural progress” in efforts to recover millions of dollars owed to the church, Switzer said, reading a lawyer’s statement deploring the “wrongful and unconscionable” actions of Kevyn Frederick, a developer who owes the church $2.8 million, court documents say. The allegations in those documents have not been proven in court.

Switzer deemed the problems a possible stepping stone for greater outreach in the city.

“When the enemy comes in with a flood, God comes in with a bigger flood,” Switzer said. “As a church, we should go after what’s ours because this is a family, a spiritual family, and it’s God’s house.”

He was interrupted by Wally Glimm, a former member of the church, who stood up and yelled.

“I’ve got something to say,” Glimm shouted at Switzer, before ushers came and ejected him from the building. “You’re trying to blame it all on Frederick. You are the one to blame for all of this.”

Earlier this month, the eight-hectare chunk of prime south Edmonton real estate was put on the block by Toronto-based creditors. The church building, school, Bible college, daycare, and the land are expected to fetch $14 million, according to CBRE Ltd., the court-appointed broker.

Glimm isn’t the first to point to Switzer, who also acts as president of Victory Christian Center Inc., for financial obstacles facing his church.

Four years ago, Victory Christian Center sold its Ellerslie Road property in an $18-million cash- and land- swap with Frederick, court documents show.

The 41-year-old developer would later be known for his involvement with the troubled Bellavera Green condos in Leduc, where fire code violations and other problems led to an emergency evacuation order for 85 completed suites in February. After the property was placed into receivership the next month, Frederick was the subject of numerous law suits.

But in exchange for the Victory swap, Frederick gave the church a $2.8-million down payment, transferred over a $2.6-million Leduc County property, and promised an additional $12.6 million to be paid later. Although Frederick took ownership of the church land, he didn’t register a $12.6 million “take back” mortgage, a safeguard to default the land back to the church if he couldn’t make payments.

The next year, the church took out a $2-million mortgage on its new Leduc property to help Frederick buy out Gary Korzan, his partner in the Bellavera Green condos. Frederick told the church he planned to pay his debts from sales of Bellavera Green condos.

At no point were lawyers involved during those deals, court documents say.

Switzer owns 98 per cent of the common shares in Victory Christian Center Inc., reports an affidavit signed by Korzan this past April. The affidavit notes the organization had an agreement with Frederick to build a church on the Leduc County land.

“Switzer signed the mortgage renewal agreement in front of independent legal counsel and swore an affidavit that he had authority to bind the (church),” Korzan’s affidavit reads. “The (church) knew that they were pledging their property for the purpose of business dealings that they had with (Frederick).”

After being escorted outside on Sunday, Glimm talked about attending Victory church for about five years in the 1990s. His daughter was a principal at the Victory school, Glimm said, and donating money was encouraged as an integral part of receiving God’s blessing.

“When I was here, it was nothing but money, money, money, money,” Glimm said.

By his own estimates, Glimm donated $300,000 to $500,000 to the church while running a successful auction and realty business. When his business went badly, the church wouldn’t help him, he said. Glimm still believes in God, but wants to see the church shut down.

“I just hope that real truth and honesty prevail in this,” Glimm said. “(Switzer) did it himself, so why put the blame on somebody else? If he had taken five or six people in there, maybe they would have said, ‘hey, we don’t like this, no.’”

Switzer couldn’t be reached for comment.

Victory Christian Center, Inc. is registered as a charitable organization with Canada Revenue Agency. The information provided by VCC to CRA for the years 2000-2010 can be found here by following the links.

For an earlier article on VCC's financial troubles, see Victory church in land-sale battle from the July 20, 2012 edition of the Edmonton Journal.

Just one question, Chief: What part of Mark is that "Build a dream..." passage cited above "paraphrased" from? It doesn't resemble anything I've seen in Mark, or any other part of the Bible.

August 29, 2012 update: On August 11, 2012, the Edmonton Journal published a lengthy feature article by Mr. Wittmeier titled The rise and fall of the 'Miracle Church'.

November 19, 2012 update: Today's Edmonton Journal contains another article by Mr. Wittmeier titled Future of Victory Christian Center linked to pending hotel deal:

EDMONTON - Like the game of Monopoly, the future of Victory Christian Center might just rest on hotels, mortgages, and bankruptcies.

Two months have passed since the initial deadline for offers on the eight-hectare site — listed in July for $14 million — where the financially troubled south Edmonton church sits. And while CBRE Limited — the court-appointed real estate company looking after the sale — is still shopping 11520 Ellerslie Road, other court documents show the fiscal fate of the church itself may rest several kilometres north, at the 307-room Crowne Plaza Hotel at 10111 Bellamy Hill Road, best known for its revolving rooftop restaurant.

The connection between the two properties and Kevyn Frederick — a troubled developer and convicted fraudster currently in a maelstrom of lawsuits — is detailed in a June 22 decision by Court of Queen’s Justice Donald Lee granting a sealing order on financial details of the hotel’s pending sale and bidding process.

In Aug. 2008, Victory Christian Center signed its Ellerslie Road property over to Frederick’s numbered company, 1410973 Alberta Ltd. In the $18-million cash and land swap, the church received a $12-million “take-back” mortgage promising to return the land if Frederick defaulted, and made a deal for Leduc County land for a new facility Frederick would build. The church also signed a five-year lease with Frederick for $334,668 per year to remain on the land until April 2013, other documents show.

Frederick used the church land to register a $6-million mortgage with Ram Singh, a retired dentist. In Oct. 2010, he used Singh’s money — and the collateral of the church property — in the $47.8-million purchase of the Crowne Plaza Hotel from Chateau Lacombe Limited Partnership. To complete the deal, Frederick borrowed $32 million from Toronto-based Romspen Investment Corporation, and more than $11 million from Allied Hospitality Services Inc...

...Lee’s decision notes that appraisals conducted on the hotel have placed its value “well below” what is owed to Romspen and Alliance. And while a deal on the Crowne Plaza still hasn’t been completed, other court documents show it’s close. After two rounds of offers, CBRE received an unsolicited offer on Aug. 17 — details of which are known to Romspen, Alliance, Singh, and the church — “for a significantly higher price” than all previous bids. Originally expected to close Oct. 1, the final deadline has been extended several times, most recently on Nov. 7, when Court of Queen’s Bench Justice Julianna Topolniski granted an additional 90 days to close the deal.

By then, it all may be moot for Victory Christian Center. Despite the $14-million price tag on the Ellerslie Road property, a valuation report completed in February estimated the property’s value at $7.5 million, or just $6.6 million if the sale is forced. And after Romspen and Singh receive their due, little might be left over.

When I try to read stories about complicated financial deals, I begin to suffer from what a former professor of mine referred to as the MEGO syndrome (My Eyes Glaze Over), so those who are interested in all the details of these complex deals may want to read the full article. I find it interesting and amusing that the Court of Queen's Bench Justice who made the ruling was Donald Lee. Two pages earlier in the November 19, 2012 edition of the paper, Justice Lee is the subject of another article. Justice Lee has had two of his decisions quashed by the Alberta Court of Appeal because his judgments in these cases consisted largely of plagiarizing--cutting and pasting--the arguments of the lawyers.

May 28, 2013 update: As reported by Brent Wittmeier of the Edmonton Journal, May 25, 2013:

Victory Christian Center — a church, daycare and K-12 school — will have to vacate its south Edmonton site by end of July, according to a deal approved Friday in the Court of Queen’s Bench.

Justice Juliana Topolniski approved a cash offer of between $6.6 million and $7.1 million for the eight-hectare site at 11520 Ellerslie Road. Details of the transaction are under a sealing order until the deal closes June 28.

The church, which has occupied the site since 1989, lost its title five years ago during an ill-fated $18-million deal with mortgage fraudster Kevyn Frederick. The church receives nothing from the sale, which came in at about half of the $14-million price tag from its July 2012 judicial listing. Barring an appeal, Ram Singh, one of Frederick’s partners, will also lose claim to a $6-million mortgage agreement signed with Frederick.

“The market has spoken,” Topolniski said. “This is a difficult case for many: the congregation, the students at the school, children at the play school, Dr. Singh.”

The land was auctioned on behalf of creditors owed tens of millions by Frederick, whose finances collapsed in late 2011. Proceeds of the sale will go to Romspen Investment Corporation, a Toronto-based mortgage company that loaned Frederick $32 million to buy the Chateau Lacombe hotel in downtown Edmonton in Aug. 2010. That hotel recently sold under court order for $27.5 million, leaving Romspen roughly $8 million short of recouping its losses.

A last-minute offer nearly saw the church become a mosque. Less than an hour before the hearing, Topolniski received word that the Southwest Muslim Community Centre had submitted a new and higher offer. The group placed a $1-million deposit on the land, offering to pay $500,000 by December and the rest of the money next year.

Despite two counter-offers tendered in the early afternoon, Romspen rejected that deal, opting for the earlier cash bid.

June 16, 2013 update:
As reported by Brent Wittmeier in the Edmonton Journal, June 8, 2013:

Land once owned by Victory Christian Center could soon be replaced by a private seniors' care facility, Alberta Justice confirmed this week.

An offer for the eight-hectare site at 11520 Ellerslie Rd. - currently occupied by the church, its K-12 school and daycare - was approved in Court of Queen's Bench on May 24 and is expected to close June 28.

The offer was submitted by Assisted Care Services Inc., Alberta Justice spokeswoman Michelle Davio said this week. The Edmonton-based company was formed in 2006 by Lorenzo Clonfero, president and owner of Rosedale Developments, which operates a 58-suite, six-storey seniors' facility at 10053 111th St.

Details are sealed until the deal closes on June 28, but the price fell to roughly half of the $14-million asking price. Clonfero's offer was between the land's appraised $7.5-million market value and its $6.6-price tag under "distressed" conditions, court heard.

Clonfero's lawyer argued the buyer should remain anonymous under the sealing order. Justice Juliana Topolniski disagreed...

...Several offers were tabled in the 10 months before Clonfero's unconditional cash offer on May 3, according to an affidavit filed last month by Bradley Gingerich, senior vice-president of court-appointed commercial real estate firm CBRE Limited.

Real estate companies submitted bids in July and October that failed to meet conditions. On Oct. 31, the Christian and Missionary Alliance denomination made an offer that didn't "meet the market value" of the land. In mid-December, a numbered company with the address of a south Edmonton law firm submitted a failed offer requiring interest-free financing for seven years.

More recent offers were submitted by a trio of Muslim organizations. The non-profit Muslim Association of Canada submitted a bid on Feb. 14 that didn't meet due diligence conditions. Later offers were jointly submitted by a pair of Mill Woods-based charities, the Southwest Muslim Community Centre and the Markaz Ul Islam Society, which were rejected for "uncertain" payment terms and a final closing date another 10 months away.

The group continued to submit last minute offers on May 24, the day courts were slated to approve Clonfero's offer.

Under the terms of the approved deal, programs affiliated with Victory Christian Center must vacate the site by the end of July.

Rosa Ritzmann, administrator of the private K-12 school operated out of modular classrooms on the land, wrote in an email that "plans are in place for the upcoming (school) year," though she wouldn't say where classes will be held. The school receives 70 per cent of its funding through the province - roughly $5,000 per student - and had 169 students last year.

Court action created disruptions for Victory Christian School officials. Eight teachers left last summer, six after the property went on the market, said Melanie Stevens, a former teacher at the school. Last August, Concordia High School spokeswoman Erin Stevenson said Victory representatives were shown a 15,000-sq.-foot facility at 830 Saddleback Road, then subject of a lease dispute that would cause the 90-yearold Lutheran school to permanently close its doors.

Victory Christian Center will receive nothing from the sale of its former land. Founding pastor and school president Cal Switzer signed away the title in August 2008 in an ill-fated $18-million cash-and-land swap.

Frederick still owed the church $12.3 million when he leveraged the land in 2010 to buy the Château Lacombe hotel in downtown Edmonton, securing a $32-million mortgage with Romspen Investment Corporation to buy the property for $48.7 million.

September 27, 2013 update:
As reported by Brent Wittmeier in the Edmonton Journal, July 31, 2013:

EDMONTON - Whenever Theresa Desjardins tells her toddler that it’s time for daycare, the 16-month-old races to find her shoes and coat.

For the past five months, Desjardins’ daughter has loved going to the attentive caregivers at the Victory Christian Center daycare. But while her daughter ate and slept well there, Desjardins worried.

Journal articles from a couple of months ago explained how tenants of the church at 11520 Ellerslie Road would be evicted by the end of July due to foreclosure of the property. But when Desjardins asked about it, the daycare director told her the stories weren’t true and that any moves were a long way off.

“She told me not to worry, it was business as usual, they’re not moving anywhere,” Desjardins said. “I was told that there’s always been a plan in place to move because they’re outgrowing their facility.”

Desjardins decided to keep her daughter where she was happy. Then on July 18, there were letters taped to children’s’ lockers informing parents care would end July 26. Officials hoped to be up and running soon at a new facility at an undisclosed location, the note said. When pressed for details, they wouldn’t tell parents when or where that would be.

“The director said to me that it was a complete shock, that this was coming out of nowhere, this was so unexpected,” Desjardins said. “I said, there’s a sold sign on your front lawn. How can this be unexpected?”

Victory Christian Center wouldn’t respond to questions or comment about whether it will vacate the site — home to church services, the daycare, and a private K-12 school — later this week. But court documents show the eight-hectare site sold for $6.6 million June 28 to Assisted Care Services Inc., a private seniors care facility developer. Private schools are required to inform Alberta Education of any changes to their location, but Victory hasn’t told the government about any changes, a government spokeswoman said in an email Tuesday. The school received approximately $800,000 from Alberta Education last year, roughly 60 per cent of the school’s budget. There were 150 students there last year, down from 169 the year before.

Nobody from Victory Christian School could be reached, but an administrator told the Journal in June that “plans are in place for the upcoming year,” but wouldn’t say where classes would be held...

...Other parents are just as upset about all the secrecy, Desjardins said. She feels especially bad for staff members, some of whom didn’t bother coming in during the final week of the daycare.

“A week’s notice is not enough time for families to make arrangements,” Desjardins said. “They’re a Christian facility. How could they do this to people? I’m not a religious person, but shouldn’t you be treating people better than this?”

As reported by Brent Wittmeier in the Edmonton Journal, September 5, 2013:

EDMONTON - A troubled south Edmonton church has moved services and its private K-12 school to a location on Saddleback Road.

Victory Christian School will open Monday at a new location at 810 Saddleback Road, an Alberta Education spokeswoman confirmed Wednesday. And while nobody at the church could be reached for comment, a receptionist confirmed church services have also been moved to the site.

The moves come just weeks after the closure of a $6.6-million deal that saw the eight-hectare Ellerslie Road site — home to the church, the school, a daycare and a Bible college — sold as part of foreclosure proceedings against convicted mortgage fraudster Kevyn Fredericks...

...Church services continued at 11520 Ellerslie Road into August. The daycare facility there closed temporarily on July 26, eight days after letters were taped to children’s’ lockers informing parents care would end. Parents say daycare services have yet to resume.

The church was at that site since 1989. The school was first incorporated in 1995 and became its own charity in June 2008, just two months before Switzer sold the property. Private schools are required to inform Alberta Education of any changes to their location, but Victory hadn’t told the government about any changes until last month.

The school received approximately $800,000 from Alberta Education last year, roughly 60 per cent of the school’s budget. There were 150 students there last year, down from 169 the year before.