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Father Barney takes fees, leaves a host of developers behind

When the credit market locked up last year, Miami developer Paul Murphy stalked the netherworld of hard-money lenders in search of $150-million to build a luxury condo tower called Regalia. Enter the Very Rev. Father Barney Canada, who ran Providence Funding, a self-proclaimed faith-based commercial lender headquartered near the University of Notre Dame. In his black clerical garb and white collar, Canada claimed to be a priest from a shadowy 19th-century offshoot of the Roman Catholic Church. Murphy is a grizzled development veteran of 42 years, but he was taken in by the smooth-talking clergyman who assured Regalia principals he could quickly rustle up $150-million from his confidential investors.

But first Canada would need $300,000 in application fees. Murphy wired over the money and personally delivered boxes of supporting documents to Canada's office in downtown South Bend, Ind.

Within weeks he knew he'd never see the loan. Canada demanded obvious information that Murphy had already provided in his voluminous application. Then he stopped taking Murphy's calls. The $300,000 was never seen again.

"He comes across as legitimate and knowledgeable with the correct connections. We played the game,'' Murphy says. "I've been burned by four or five other people, too. But not anywhere near that amount.''

Canada used his priestly routine to take developers across Florida and beyond for upward of a million dollars in fees the past year, records show. Not a single loan has closed, and none of the applicants knew that Canada had been incarcerated twice in the 1990s for running "advance fee" lending scams that defrauded businessmen just like themselves.

Closest to home, Canada took $150,000 from the developers of Trump Tower Tampa developers before informing them last spring he wouldn't deliver a $200-million loan. SimDag LLC filed for bankruptcy a month later.

Clergymen weren't immune either. Washington, D.C., pastor Ishmeal Shaw said he lost $222,000 when Canada promised, and then reneged on, a $12.6-million loan that would have paid for a new church. At least a half dozen others, including a developer in Toronto, lost between $25,000 and $200,000.

California commercial loan broker Larry Hudson said Canada's sort thrives when money grows scarce and banks demand collateral most projects can't meet. But Hudson had never seen the religious angle used so blatantly to gain the trust of borrowers.

"This guy has an unbelievable presence about him. The only thing missing is the pulpit," said Hudson, who crossed paths with Canada. "There are lots of lenders who ask for big front money. I won't deal with them. It's a scam that goes on across the network.''

Canada would not comment for this article. His Tampa lawyer John Anthony, defending him against accusations from Trump Tower developers, maintains his client paid his debt to society and has become a "target based on anti-clerical sentiments."

"Father Barney feels like a predictable but unjustified scapegoat for a project no lender was able to finance," Anthony said.

•••

Fort Lauderdale's Mike Lally was another Florida developer attracted to Canada's pious pitch.

Lally spent years trying to launch multimillion-dollar marina and warehouse projects in Dania Beach. Turned down by conventional lenders for $11-million, Lally hooked up with Canada, who promised to "get you closed in a month."

To confirm Canada's bona fides, Lally flew up to South Bend. Canada gave him a grand tour of the chapel at Notre Dame, the famed Catholic university. In his Roman collar, Canada blended in with other clergymen milling around campus.

Lally's confidence swelled when Canada took him to lunch at the Morris Inn, the wood-trimmed hotel on the university campus. Waiters greeted Canada as if they knew him.

"We felt pretty warm and fuzzy,'' Lally said.

The only twinge of doubt came when Canada introduced his wife back at the office on South Bend's Main Street. Pierced, tattooed and several decades Father Barney's junior, Amanda Canada didn't look like the stereotypical spouse of a devout 60-something priest.

Still, Lally and his partners handed over $100,000 in fees to Providence Funding. Soon the excuses began to fly and Canada "kept slow-walking us," Lally said. He pleaded for a partial refund of the $100,000 and got the deaf ear. The two projects fell into foreclosure.

"He buried us, literally," Lally said.

•••

Canada, whose real name is Byron Levon Canada, spent three years in federal prison in the early 1990s for duping developers out of application fees for loans he never intended to make. As part of his deal with prosecutors, he agreed to pay $1.8-million in restitution to his victims.

"This is a massive fraud perpetrated on a large number of individuals over a long period of time," a court document from the early 1990s read. "This is one of the largest, if not the largest, advance fee scheme with which the Office of the United States Attorney has been involved."

When he got out of prison, he continued his crooked ways, earning himself years of house arrest and supervised release. Sometime in the past decade he started calling himself a priest in the Orthodox-Catholic Church of America. A published list of that sect's clergy includes no Barney Canada.

Developers who refuse to let go of projects they've sunk their wealth and hearts into become easy targets for the likes of Canada, Hudson said.

One sign of trouble was Canada's use of a 20-page application riddled with "more outs than Jimmy Carter has peanuts," Hudson said. Several Providence borrowers said Canada confirmed closing dates only to surprise them with a bogus checklist of unfulfilled loan terms at the last minute. Then came the tart letter from Canada's lawyer informing them the fee was nonrefundable.

"I call them Martin Luther King projects — 'I have a dream' projects," Hudson said. "Then Father Barney comes in and throws everybody for a loop. It's the last thing you'd expect."

Several developers, including Trump Tower's SimDag, are pursuing lawsuits to recover their money. Others have complained to the FBI and the U.S. Attorney's Office.

After approaching close to 100 lenders, Murphy said he's close to financing his 40-story condo tower. Then he'll make it his mission to expose Canada.

"There will be a day of reckoning," Murphy said. "I'm going to go after this guy with a vengeance."

James Thorner can be reached at jthorner@sptimes.com.

Who is the Very Rev. Barney Canada of Providence Funding?

The thrice-married 61-year-old spent most of the period from 1986 to 2000 either running, or serving time for, advanced fee schemes whereby he collected millions of dollars from developers in exchange for loans that never materialized. Canada's supporters claim he underwent a religious conversion and founded a faith-based commercial lending company called Providence Funding in 2005. Yet his office in South Bend, Ind., can offer no evidence that Canada has ever closed a large commercial loan. In the past year alone, he's collected more than a million dollars in fees without a single loan to show for it. At least one insider from Canada's office said he spends most days dodging angry calls from erstwhile customers, conferencing with his attorney and relaxing in a haze of incense smoke.



What it cost developers

Here's how much some developers paid the Rev. Barney Canada in 2008 for commercial loans that never materialized.


$300,000

Regalia condo tower, Sunny Isles Beach

Developer: Paul Murphy, partners

Loan requested: $150-million


$150,000

Trump Tower Tampa, Tampa

Developer: SimDag LLC

Loan requested: $200-million


$100,000

Dania Beach Boat Club, Dania Beach

Developer: Mike Lally, partners

Loan requested: $11-million


$222,000

Paramount Baptist Church, Washington, D.C.

Developer: The Rev. Ishmael Shaw

Loan requested: $12.6-million


$25,000

Atlantic Village Hotel & Marina, Dania Beach

Developer: Bayard Spector

Loan requested: Unknown



What they're saying

"He comes across as legitimate and knowledgeable with the correct connections. I've been burned by four or five other people, too. But not anywhere near that amount.''

Paul Murphy, developer


"This guy has an unbelievable presence about him. The only thing missing is the pulpit. There are lots of lenders who ask for big front money. I won't deal with them. It's a scam that goes on across the network.''

Larry Hudson, California commercial loan broker


"He sucks you in to get the commitment fees and then stops taking your calls, stops all e-mails."

Mike Lally, Dania Beach developer

Father Barney takes fees, leaves a host of developers behind 01/17/09 [Last modified: Monday, January 19, 2009 11:09pm]
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