Pastor Kirbyjon Caldwell, adviser to Obama and Bush, pleads guilty to fraud
After denying any wrongdoing on his part for nearly two years, prominent Houston pastor Kirbyjon Caldwell, who served as a spiritual adviser to former Presidents Barack Obama and George W. Bush, has admitted to conspiracy to commit wire fraud in connection to his role in a multimillion investment scheme that preyed on the elderly.
Last summer, Caldwell, who was indicted in 2018 for defrauding investors — including elderly members of his Windsor Village United Methodist Church — of more than $1 million, maintained his innocence as his co-defendant, Gregory Alan Smith, pleaded guilty to wire fraud.
“These defendants used their positions as religious leaders and investment advisors to defraud Louisiana residents — many of whom are elderly and retired,” U.S. Attorney David C. Joseph said in a release 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.”
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Caldwell and Smith, who is an investment adviser based in Shreveport, Louisiana, were both charged with 13 counts, including conspiracy to commit money laundering when they raised around $3.5 million in Historical Chinese bonds from 29 investors between 2013 to 2014.
Caldwell and Smith reportedly tricked investors into believing that they were buying the Historical Chinese bonds through a Shreveport-based company called Smith Financial Group LLC. The Department of Justice noted that the bonds were issued by the former Republic of China prior to losing power to the communist government in 1949.
“They are not recognized by China's current government and have no investment value. Smith and Caldwell promised high rates of return, sometimes three to 15 times the value of the investments. Instead of investing the funds, the defendants used them to pay personal loans, credit card balances, mortgages, vehicle purchases and other personal expenses," the DOJ said.
Caldwell received $760,000, which he used for personal expenses, including mortgage payments. His limited liability company also received $1 million, of which $175,000 was transferred to the pastor. Smith received $1 million of the funds invested which he splurged on luxury vehicles, the DOJ said.
According to a KTBS report, a woman who was a victim of the pastor’s scheme lost her entire life savings of $200,000 and is now living as a "hovel." She is so destitute she struggles to pay her utilities.
In court on Wednesday, Caldwell entered his guilty plea before U.S. District Judge Maurice Hicks who allowed him to remain free on bond until sentencing on July 22.
He reportedly showed no outward emotion as he admitted he was guilty.
The megachurch pastor had attempted to get a continuance for his case but it was denied and his trial was set for April 6.
Caldwell, pastor of the 16,000-member Windsor Village United Methodist Church in Houston, had previously pleaded not guilty. Earlier this month, his request for a third continuance in his case was denied. His trial was set for April 6.
“And some of these victims have been without hundreds of thousands of dollars since 2013. For many of them, it represents their life savings, and the dragging out of this prosecution compounds their loss,” the government argued in opposing the continuance request.
Under the terms of his plea agreement, Caldwell faces between five and seven years in prison, a fine of up to $250,000, and up to three years of supervised release, the DOJ said. The pastor, who has already made partial restitution to the victims, has agreed to pay the remaining balance, $1,951,478.00, before sentencing.
The DOJ further noted that Caldwell’s case was included in their largest-ever nationwide elder fraud sweep in 2019, which included hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.
A recently launched National Elder Fraud Hotline provides services to seniors who might be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers.
When applicable, case managers will also complete a complaint form with the FBI's Internet Crime Complaint Center (IC3) for internet-facilitated crimes and submit a consumer complaint to the FTC on behalf of the caller. The Hotline’s toll-free number is 833-FRAUD-11 (833-372-8311).
