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The Ghermezians: No Strangers to Courtroom Fights Over Their Real Estate Projects

Reporters in Canada -- who universally declined to use their names for fear of losing all access to the family and their businesses -- point out that the Ghermezians are respected for their political acumen. Some charge that the family goes over the legal line, but no accusations have been proven in court.

Said one Edmonton reporter, "They're like Teflon. Nothing sticks."

The family is currently embroiled in a legal battle with the government-owned Alberta Treasury Branches, a public finance company, over refinancing of the family's West Edmonton Mall.

Since it opened in the late 1980s, the mall has been plagued with reports of financial problems.

Among the charges that have surfaced in the Canadian trial are allegations of bribery of public officials to receive the necessary zoning -- the land the mall sits on was residential prior to the Ghermezians' investment -- and get the public financial backing to build and hold on to the shopping center.

In October 1994, Alberta Treasury Branches increased its loans to the troubled mall by five fold, from 75 million to 440 million Canadian dollars. Allegations of improper dealings with a former executive of the finance agency form the core of a government lawsuit to gain control of the mall and of countersuits by the Ghermezians.

One charge leveled by attorneys for the provincial government of Alberta is that the family used rabbis to illegally shuttle money around the globe and into the bank account of the former Alberta Treasury Branches executive who granted the $440 million cash infusion.

Government attorneys charge that the former executive accepted bribes from the Ghermezians in return for approving the refinancing package.

In a Canadian national newspaper, the Globe and Mail, the family called the charges "misleading and reckless."

In countersuits by the family, the Ghermezians have charged that the Alberta Treasury Branches suit has hurt their ability to do business in the United States.

The suit is only the latest affecting the giant Canadian mall. The family has lost several civil suits involving various business deals at the mall, but according to Canadian newspapers, the Ghermezians have so far avoided paying the judgments in those cases, which total $2 million.

Like many of their other projects from London to Edmonton, the Peccole Ranch investment -- an early foray by the Ghermezians' into residential development in the Las Vegas Valley -- landed their representatives in court.

According to the Calgary Herald, the family made a pitch to develop the 1,700 acres owned by the late William Peccole.

Peccole agreed to work with the Ghermezians to develop 600 acres of what is now Peccole Ranch, but within a few years Peccole was suing the family while the Ghermezians charged Peccole with reneging on the deal.

Peccole accused the Ghermezians of racketeering, shoddy workmanship and misappropriation of funds.

The local developer -- himself long considered a shrewd political and financial operator -- reached an out-of-court settlement to end the legal battle in December 1995.

Despite the legal battles, the Ghermezians have allies worldwide. The death of the family patriarch in January brought many of those allies together in Edmonton.

One of those attending was Jim Edwards, president of Economic Development Edmonton, a nonprofit organization that seeks to promote business interests in the Alberta capital.

Edwards echoed other business leaders from Edmonton: The Ghermezians have been good to Edmonton and to Alberta, they insist. The criticism that they receive is because they are involved in very large business deals, which tend to attract critics.

"They have a remarkable business vision, particularly in the retail field, though they are no slouch as developers either," Edwards said.

"Of course, they're controversial," he said. "People who are mysterious are always controversial. But their mystery is that they are private people and very much family oriented."

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