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Lutheran Church–Canada has settled allegations that it misled investors about an investment program that collapsed into insolvency in 2015.

On Thursday, the Alberta Securities Commission (ASC) announced it had reached a settlement agreement with the two of the church’s related companies, the Alberta-British Columbia District (the District) and Alberta-British Columbia District Investments Ltd. (DIL), as well as five of the companies’ key officers and directors.

According to the agreement, the District and DIL accepted investments into two funds — the Church Extension Fund and the District Investment Fund — without telling investors pertinent details about how their money was being used.

Investors did not know that the majority of their money was going into a land development project for a seniors’ housing complex east of Calgary — a project that had defaulted on loan payments for three straight years, did not produce financial statements and had insufficient assets to secure their loans, the ASC said.

Collectively, the two investment funds raised more than $130 million by the time the District and DIL were placed into bankruptcy protection in 2015.

As part of the settlement, five individual respondents — Donald Robert Schiemann, Kurtis Francis Robinson, James Theodore Kentel, Mark David Ruf and Harold Carl Schmidt — admitted they breached Alberta securities laws by withholding pertinent information from investors. Schiemann and Ruf are ordained Lutheran ministers, according to the settlement agreement.

The five individuals have agreed to pay $500,000 collectively to a Company Creditors Arrangement Act (CCAA) Monitor, which will distribute proceeds of the District’s and DIL’s insolvency to investors, pursuant to directions of the Court of Queen’s Bench of Alberta. They will also pay $100,000 in costs to the ASC, and are permanently barred from securities trading.

None of the respondents have previously been sanctioned by the ASC, and the ASC noted that respondents cooperated with staff during the investigation.

The regulator also explained that the corporate respondents did not pay any settlement funds in this case to ensure that any eligible corporate assets can be recovered by investors through CCAA proceedings.

“The ASC is very pleased to facilitate recovery for investors through this settlement agreement,” David Linder, the ASC’s executive director, said in a statement.

“With a system for distribution in place through the CCAA Monitor, and with the Court’s supervision, this settlement provides an opportunity to increase the amount available for distribution to harmed investors — many of whom are elderly — in a timely manner.”