SHREVEPORT, La. - Kirbyjon Caldwell, the senior pastor of Windsor Village United Methodist Church and one of former President George W. Bush’s spiritual advisors, entered a guilty plea to conspiracy to commit wire fraud in connection to his role in a multimillion-dollar investment scheme.
His codefendant, Gregory Smith, a Shreveport investment advisor, pled guilty on July 23, 2019, to the same charge.
“These defendants used their positions as religious leaders and investment advisors to defraud Louisiana residents – many of whom are elderly and retired,” stated U.S. Attorney Joseph. “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.”
According to information presented in court, Caldwell and Smith conspired to use their influence and status to persuade multiple victims to “invest” approximately $3.5 million with them.
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. These bonds are not recognized by China’s current government and, accordingly, have no investment value.
Smith began approaching existing clients and acquaintances in the spring of 2013 about what he described as an opportunity to invest in historical Chinese bonds.
His usual sales pitch to investors was that Caldwell was putting the bond deal together on behalf of investors, had the bonds in his possession or was obtaining them, and was brokering a deal to sell the bonds. Smith promised that by investing money with him and Caldwell, the victims would obtain partial ownership of the bonds and would quickly receive exponential returns on their investments.
The victims were not told of the true nature of the bonds, nor were they informed that no previous investor had ever obtained the promised return on investment. The victims were encouraged to cash out any other investments they might have if they could not otherwise afford to participate.
After Smith made the fraudulent pitch, the victims were instructed to wire funds to various bank accounts under Caldwell’s control.
In 2013 and 2014, approximately $3.5 million was “invested.” The funds were divided between Caldwell, Smith, and others. Caldwell used the approximately $900,000 that he received to pay down personal loans, mortgages, and credit cards, and maintain his lifestyle.
Smith received over $1 million. He used this money to pay down loans, purchase two luxury sport utility vehicles, place a down payment on a vacation property, and maintain his lifestyle. After time passed and investors began to question why they had not received the promised returns, Caldwell and Smith offered excuses and defended the legitimacy of the deals.
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. Caldwell, who has already made partial restitution to the victims, has agreed to pay the remaining balance, $1,951,478, before sentencing.
Caldwell’s sentencing has been set for July 22, 2020. Smith’s sentencing is scheduled for May 4, 2020.
The recently launched National Elder Fraud Hotline provides services to seniors who may be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers. Case managers will assist callers with reporting the suspected fraud to relevant agencies and will provide resources and referrals to other appropriate services as needed.
When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll-free number is 833-FRAUD-11 (833-372-8311).
For more information about DOJ’s efforts to prevent and combat elder abuse, please visit the Elder Justice Website. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime.