Famous Houston pastor pleads guilty to $3.5 million fraud

Kirbyjon Caldwell, a famous Houston pastor, has pleaded guilty to defrauding investors of approximately $3.5 million.



Mr Caldwell built up Windsor Village United Methodist Church in SW Houston into a 14,000 member mega church and was a spiritual advisor to President George W Bush. He offered the benediction at both his inaugurations and officiated at the wedding of President Bush’s daughter, Jenna.

Former Investment Banker

Caldwell is a former director at Continental Airlines (until 2011) and NRG Energy (he left the board one month after he was indicted in 2018).  He is also a minority owner in the Houston Texans. Prior to becoming a pastor he was an investment banker on Wall Street and worked for a bond firm in Houston.

The fraud scheme

Caldwell was charged along with Gregory Smith, a Shreveport-based investment advisor. Smith pleaded guilty in July 2019.

Between April 2013 and August 2014, Caldwell and Smith raised $3,488,500 from 29 investors through a fraudulent offer and sale of various pre-1949 Chinese bonds. Caldwell and Smith falsely represented to these investors that the bonds were safe, risk-free, worth tens, if not hundreds of millions of dollars and could be sold to third parties. In reality, the bonds have no investment value.

The Chinese government doesn’t recognize the validity of bonds issued prior to the communist takeover of 1949. It has never paid out on any of these bonds, except once in 1987. As part of the negotiations over Hong Kong, the Brits received 36 cents on the dollar. The US courts have generally said that the People’s Republic of China can assert sovereign immunity in not paying these debts.

Caldwell kept approximately $0.9 million and used it to pay down personal loans, mortgages and credit cards. Smith received $1.1 million of the total monies raised.

Sentencing

Caldwell could get seven years in prison. He also faces a fine up to $250,000 and up to three years of supervised release. Sentencing is set for July 22, 2020.

https://www.justice.gov/usao-wdla/pr/houston-texas-pastor-pleads-guilty-his-role-multimillion-dollar-investment-scheme

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