Houston megachurch pastor Kirbyjon Caldwell, a spiritual adviser to former President George W. Bush, entered a guilty plea earlier this week after being accused of defrauding people of millions of dollars using phony bonds.
The pastor was indicted two years ago in federal court on wire fraud and money laundering charges.
According to court papers, the pastor and investment advisor Gregory Smith sold nearly $3.5 million in worthless pre-revolutionary Chinese bonds to the elderly and vulnerable investors, ABC 13 reported.
The defendants used their positions as religious leaders and investment advisors to defraud Louisiana residents, U.S. Attorney David Joseph said in a news release. “In doing so, the defendants abused the trust and respect of their victims for the sole purpose of stealing their money. This type of deceit can be devastating for victims, especially when life savings are lost.”
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Some of these victims were defrauded of hundreds of thousands of dollars since 2013. “For many, it represents their life savings, and the dragging out of this prosecution compounds their loss,” according to the government.
“The victims’ investments were purportedly in historical Chinese bonds, which are bonds issued by the former Republic of China prior to losing power to the Communist government in 1949,” according to a news release from the U.S. Attorney’s Office.
The bonds are not recognized by China’s current government and have no investment value.
The scam began in the spring of 2013 when Smith began approaching victims. In 2013 and 2014, the funds were “invested” and divided between Caldwell, Smith, and others.
“Caldwell used about $900,000 of the funds to pay down personal loans, mortgages, credit cards and to maintain his lifestyle,” The Shreveport Times reported.
Caldwell, a senior pastor of Windsor Village United Methodist Church, has a congregation of more than 16,000 people.
Smith is scheduled to be sentenced on May 4 and Caldwell will be sentenced on July 22. They face years in federal prison and could be forced to pay back millions.
Caldwell is looking at five-to-seven years in prison, a fine up to $2050,000 and up to three years of supervised release. He has already made partial restitution to the victims and has agreed to pay the remaining balance of $1,951,478 before sentencing, The Shreveport Times reported.
