Downtown Calgary with River skyline`
jewhyte/123RF

The Alberta Securities Commission (ASC) has accused the Lutheran Church of Canada, its Alberta-British Columbia district, a related company and five individuals of misleading investors who put more than $130 million into funds that backed a failed residential development near Calgary.

The ASC states in a notice of hearing published on Thursday that operators of the long-running investment program designed to provide a return to investors while raising money to build churches and schools failed to tell investors — many of whom were church members — how the money was being used or at what risk.

The ASC notice points out that the majority of the invested funds were loaned in support of a development called Encharis that included a school, church and seniors’ housing east of Calgary. It sought court insolvency protection in 2015.

It says investors were never told about the high concentration of funding going into one project, persistent loan defaults or cash flow problems.

The ASC is to meet with the parties on Aug. 13 to set a date for a hearing regarding the allegations of securities law violations. The charges have not been proven.

The list of respondents includes the national and district church, Alberta-British Columbia District Investments Ltd., as well as company officers or directors Donald Robert Schiemann, Kurtis Francis Robinson, James Theodore Kentel, Mark David Ruf and Harold Carl Schmidt.