SHREVEPORT, La. – The senior pastor of a Houston megachurch pleaded guilty Wednesday to charges he bilked investors out of millions of dollars.
Kirbyjon H. Caldwell was indicted two years ago in federal court on wire fraud and money laundering charges. He pleaded guilty to conspiracy to commit wire fraud in connection with the fraud that also involved Shreveport investment adviser Gregory Alan Smith, 55, who pleaded guilty last year.
“These defendants used their positions as religious leaders and investment advisers to defraud Louisiana residents – many of whom are elderly and retired,” U.S. Attorney David Joseph said in a statement. “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.”
No supporters accompanied Caldwell to the hearing, other than his four attorneys. U.S. District Judge Maurice Hicks allowed Caldwell to remain free on bond until sentencing on July 22.
Caldwell showed no outward emotion as he calmly and matter-of-factly answered Hicks' questions that he was admitting he was guilty and that the plea was free and voluntary.
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.
The government argued that Caldwell’s trial didn’t need to be delayed because one of the victims is now unavailable due to her advanced dementia and another has been diagnosed with terminal cancer.
“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,” according to the government.
According to the government, Caldwell and Smith persuaded multiple victims -- all of whom were investment clients of Smith's in Shreveport - to invest about $3.5 million in their scheme. Smith's sales pitch to clients and acquaintances offered an opportunity to invest in Chinese historical bonds. The victims were not told of the true nature of the bonds and they were encouraged to cash out any other investments they might have if they could not afford to participate.
One of the victims, a woman, lost her entire life savings of $200,000. She is living in what is described as a "hovel" and has been left so destitute she even has trouble paying her utilities.
After Smith made the fraudulent pitch, the victims were instructed to wire funds to various accounts under Caldwell’s control. The funds were divided between Smith, Caldwell and others, the government said.
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 $1.08 million and used the 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, defended the legitimacy of the deals, and assured victim-investors that they would receive the promised returns.
Under the terms of his plea agreement, Caldwell faces between 5 to 7 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, $1,951,478.00, before sentencing.
Smith will be sentenced May 4 and faces the same prison sentence range.