A year ago, the IRM Corporation sent letters to more than 1,500 investors, including Jim and Bertha VanderKodde of Grand Rapids, Michigan. The letter announced that IRM—Investment Research Management—could make no further payments.

"When we received that letter," Jim VanderKodde told CT, "we said, 'the Lord gave it to us, and the Lord took it away.' We never lost a wink of sleep over it."

For the VanderKoddes, the investment totaled $10,000, a relatively small part of their savings after he finished a 28-year career as a police officer. But for many other investors in IRM's $400 million real estate operation, sleep did not come so easily. Many are retirees who had placed most or all of their life savings in the private company.

IRM founder John O. Van Hofwegen and most of its investors are members of the Grand Rapids-based Christian Reformed Church (CRC). The CRC is one of the principal heirs of the Dutch Calvinist tradition in North America. The company's star salesperson, Jay Merron, formerly taught at the CRC-related South Christian High School in Grand Rapids. Besides the hundreds of individual investors, some of the largest CRC-related agencies, Home Missions Board, Calvin College, and the Back to God Hour radio ministry, invested a total of $11.4 million in IRM. The Barnabas Foundation, another major investor, while independent of the denomination, has many CRC clients. Potential losses for all parties could top $130 million.

CALIFORNIA CONNECTION: IRM began in the late 1960s as a limited partnership real estate management venture and eventually acquired 59 properties, mostly apartment complexes in northern and central California. For more than 20 years, IRM paid investors dividends of 9 to 11 percent.

In the ...

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