For two years, Houston megachurch pastor Kirbyjon Caldwell has been dealing with allegations that he defrauded people of millions of dollars using phony bonds. He had maintained his innocence.
On Wednesday, he pled guilty.
His codefendant Gregory A. Smith, a Shreveport investment advisor, pled guilty to the same charge in July 2019.
“These defendants used their positions as religious leaders and investment advisors to defraud Louisiana residents – many of whom are elderly and retired,” said U.S. Attorney David Joseph in a news release on Wednesday.
“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.
“My office will continue to vigorously prosecute those who use confidence schemes to prey upon the elderly and people of faith.”
Caldwell faces between five to seven years in prison, a fine of up to $250,000, and up to three years of supervised release. He has made partial restitution to the victims, and agreed Wednesday to pay the remaining $1,951,478.00, before sentencing this summer.
Caldwell’s sentencing is scheduled for July 22. Smith will be sentenced on May 4.
The two conspired to use their influence and status to persuade multiple victims to invest approximately $3.5 million with them, per information presented in court.
“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,” read the news release from the U.S. Attorney’s Office.
“These bonds are not recognized by China’s current government and, accordingly, have no investment value.”
Smith began approaching the victims in Spring 2013. In 2013 and 2014, the funds were “invested” and divided between Caldwell, Smith and others.
Caldwell, Smith and others divvied up the proceeds and Caldwell used approximately $900,000 to cover personal loans, mortgages and credit cards and pay other expenses. Smith spent his $1.08 million cut to pay off loans, buy two luxury sport utility vehicles and make a down payment on a vacation property.