Southside church duped by accused con man, sold in forced sale

Court documents show Assisted Care Services Inc. bought the church and property for $6.6 million, less than half the original listing price. (CBC)

A bad business deal between an evangelical pastor and an accused con man has cost the church’s congregation its church, school and daycare.

On Friday, a judge ordered the final sale of the Victory Christian Center at 11520 Ellerslie Road. The congregation will have to be out by the end of July.

The details of the sale, including the buyer, have been sealed pending closure of the deal — but court documents show the church and surrounding lands had an appraised value of between $6.6 million and $7.14 million.

Both the church and a second mortgage holder, Edmonton dentist Ram Singh, will receive nothing from the sale. The first mortgage holder, Romspen Investments, will receive the proceeds of the sale but will still lose about $8 million.

“This is a difficult case for everyone involved,” Court of Queen’s Bench Justice Julia Topolniski told the court. “It is difficult for the congregation, the children at the school, for the daycare, and for Dr. Singh.”

The Victory Church property had been originally listed for sale at $14 million. But Topolnitsky noted that the property had been on the market for 10 months, and a new appraisal had pegged its value at roughly half its original listed price.

“The market has spoken,” Topolnitsky said.

Court documents show Victory Church pastor Cal Switzer sold the Victory property to developer Kevyn Frederick in August 2008 for $18 million. Frederick transferred the land to a numbered company he controlled but did not register the mortgage, which would have guaranteed the property reverted back to the church if he did not make his payments.

The documents show Frederick made a down payment of $2.8 million but paid nothing more.

The property fell into foreclosure and eventually a judicial sale was ordered.

As part of the original deal, Frederick was supposed to provide the church with land in Leduc for a new church. But documents show he also reneged on that deal.

Court documents show Switzer inexplicably cut the deal with Frederick on behalf of the church without any independent legal advice.

Court records show Frederick has used numerous aliases including Kevin Sheldon Frederick, Kevin Ronald Frederick and Portia Frederick.

He is the subject of numerous legal proceedings related to real-estate deals in which he borrowed huge sums to finance purchases, only to have the deals collapse when he defaulted on mortgage payments.

One of those deals was for the Chateau Lacombe Hotel in downtown Edmonton. That deal collapsed after Frederick defaulted on the mortgage without making a single payment. Another deal, the Bellavera Green Condo development in Leduc, also collapsed.

The mortgage holder in the Chateau Lacombe deal — Romspen — slapped a $32 million mortgage on Frederick’s Victory church property in an attempt to recover some of its money.

Edmonton dentist Ram Singh also put a $10 million mortgage on the property in an attempt to recover the money he is owed on the Bellavera Condo deal. It was those creditors that forced the judicial sale of the Victory property.

Frederick is also being sued by resident owners of a Fort McMurray condo building after their reserve fund disappeared.

Court documents show Frederick borrowed nearly $1.7 million from an Edmonton bank to develop the Fort McMurray building, but defaulted on the loan leaving the condo in receivership. The lawsuit accuses Frederick of “embezzlement, unauthorized misappropriation and secret misdirection” of $268,000. The condo owners are now stuck with the future cost of maintenance and repairs.

The court heard today that no one has any idea where Frederick is and that he took interest in the sale of the Victory church property.