Pastor Accused of Fraud in $900,000 Lawsuit

One month before she was to undergo brain surgery, Sara Battenschlag testified Thursday, her minister persuaded her to give him $100,000 in cash and the key to the bank box in which she placed the promissory notes he signed.

The Rev. Marion McCandless promised to return the money within one year, but she never received “one cent” back, Battenschlag testified.

An Orange County Superior Court jury was hearing testimony this week in Battenschlag’s $900,000 suit against McCandless, pastor of the Westminster Community Church of the Nazarene for 28 years. Battenschlag is alleging fraud, misrepresentation and breach of contract.

McCandless has denied any wrongdoing, according to court papers. McCandless declined to comment on the advice of his attorney, Michael F. Smith.

Battenschlag’s attorney, Steven A. Silverstein, has portrayed McCandless as a fraud, a clergyman who preached religion while accumulating an earthly fortune.

Silverstein said he will show in court today that McCandless’ net worth exceeds $3.5 million.

McCandless testified earlier this week that his salary has never exceeded $60,000 a year.

Battenschlag, 49, was seriously injured Feb. 3, 1983, when a car in which she was a passenger was in an accident on MacArthur Boulevard in Irvine. She subsequently received a substantial settlement from the driver of the car, which includes an annuity of $3,000 a month for life.

She suffered head injuries, for which she has had four brain operations and several facial reconstruction surgeries, court records show.

It was in January of 1986, one month before she was scheduled for her first brain operation, that she talked with McCandless. Each has testified that the other initiated the conversation, which quickly turned to money.

“He asked me how much money I got from the automobile accident,” Battenschlag testified Thursday. “He asked me how much I had saved.

“He asked me how much I paid for my home and how much I owed on it. He asked how much I paid for my car and how much I owed on it. He asked me how much I paid for my furniture and how much I owed on it.”

McCandless then told her he knew of several investments that would produce a greater return than the 7% she was getting on $100,000 she had in a savings account, she said.

McCandless suggested that he could invest the money. She agreed.

Following his instructions, she handed over three cashier’s checks totaling $100,000. Battenschlag testified that she did not ask for a receipt and that McCandless told her to buy three standard promissory notes at a stationery store.

He filled them out and signed them, creating a debt of $100,000 at no interest, she said.

McCandless told her to place the notes in a safe-deposit box at a bank and to give him the key, she said, and she complied.

Battenschlag, a third-generation Nazarene, testified that she knew nothing about finance or investments. She said she had learned to trust the Nazarene church and its preachers--”loving, caring, consoling pastors”--and assumed that she could trust McCandless.

“They represented that they were my extended family and they would always be there to help me,” she testified. “When I realized I had been royally ripped off by my pastor, I was just in shock. I was very saddened, extremely saddened by all this.”

Account Supported

Battenschlag testified that McCandless, aided by an associate pastor at the church, tried to get a signature card that would have allowed him access to the safe-deposit box.

On the day of her operation--Feb. 28, 1986--McCandless met her at the hospital. He asked Battenschlag’s daughter, Karen McColloch, to leave while the two of them prayed, she said, but McCandless immediately asked her for the card.

The account of McCandless’ bid to get access to the box--which contained only the notes--was supported by another parishioner and friend of Battenschlag.

Elsie Gay Dykstra of Westminster testified that she sat next to McCandless in the waiting room while Battenschlag was in surgery. McColloch was sitting across the room.

McCandless raised a newspaper, obscuring McColloch’s view, Dykstra said and, without turning to her, McCandless asked her to get the card out of Battenschlag’s purse.

“He said, ‘I want you to go get the card out of her purse and get it for me,’ ” Dykstra said.

Dykstra said she was flabbergasted and did not answer McCandless and never returned to his church.

Lawyer Fined

Smith, McCandless’ lawyer, was fined $1,000 by Judge Richard J. Beacom late Thursday for failing to honor a subpoena calling on him to produce income records for McCandless.

Silverstein said that late in the day, Smith agreed to stipulate to McCandless’ net worth at $3.5 million.

“He confirmed to me that McCandless is going to provide a financial statement that his net worth is $3.54 million--his personal net worth,” Silverstein said.

In an interview, Battenschlag said she is proud that her grandparents were “charter founding members” when the Nazarene church was founded early in this century in Pilot Point, Tex.

The church has 4,902 congregations in North America and claims more than 700,000 members worldwide. It has eight colleges and a theological seminary.

‘Only Savings’

The Westminster Nazarene church, one of 17 in Orange County, is at 8500 Bolsa Ave.

Battenschlag said she prays for McCandless.

“We believe that you must be a born-again Christian and that you must have a one-on-one relationship with the Almighty,” Battenschlag said. “The Bible teaches that you have to forgive your brother or sister, and if you don’t forgive, the Lord cannot forgive you your sins.”

Battenschlag said the money makes a big difference to her, describing the $100,000 as the only savings she had for an emergency.

“But it would not have hurt me so badly had it not been my pastor,” Battenschlag said. “It’s the most devastating thing that has ever happened to me in the world.”