Update-January 2022

Canadian equivalent to the LCEF suspended operations, froze accounts in 2015

Two investment funds run by the Alberta British Columbia district of the Lutheran Church of Canada collapsed in 2015 before receiving a court-appointed monitor and eventually reaching a settlement with the Alberta Securities Commission (ASC) in 2019.

District President Donald Schiemann and four other administrators agreed to pay $500,000 and no longer personally trade in securities and derivatives after withholding crucial financial information from investors about the Church Extension Fund and District Investment Fund.

Investors lost millions of dollars in the funds, which were established decades ago to help build churches, schools, and retirement communities, but ran into trouble after over-investing in a real estate development that became insolvent in 2014. 

According to the ASC settlement, the funds sank investors’ money into a separate corporation established by the district in 2005 to oversee the Prince of Peace development, located east of Calgary. By 2012, almost 97% of the funds’ loan portfolio was tied up in mortgages taken out by Encharis Community Housing and Services (ECHS), even though ECHS started defaulting on its principal payments in 2007, didn’t produce any financial statements, and didn’t have enough assets to secure the loans. 

The funds received a court-appointed monitor in 2015, restructured, and began liquidating assets. As of 2019, the settlement said, “a significant portion” of the investors’ claims had been returned, but it did not offer specifics.

The Canadian Broadcasting Corporation broke this story in early 2015.