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*Houston megachurch pastor Rev. Kirbyjon H. Caldwell was indicted in federal court Thursday on claims that he sold more than $1 million in worthless Chinese bonds to elderly investors, the Washington Post reports.
A federal grand jury in Shreveport, La., returned a 13-count indictment accusing Caldwell and financial planner Gregory Alan Smith of wire fraud, money laundering and conspiracy. Many of their victims lost their life savings to the alleged scheme, prosecutors said in a news release.
Smith and Caldwell, a longtime spiritual adviser to George W. Bush, were also sued by the Securities and Exchange Commission in the same federal court on allegations that they violated financial laws.
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According to the charges, Caldwell used his influence as pastor of the 16,000-member Windsor Village United Methodist Church in Houston, and Smith used his status as operator of Smith Financial Group in Shreveport, Louisiana, to lure elderly and vulnerable investors o pay more than a million dollars for historical Chinese bonds, per Newsweek.
The bonds were reportedly issued by the former Republic of China before it lost power to the Communist government in 1949, and are not recognized by the current Chinese government and have no investment value.
“Smith and Caldwell promised high rates of return, sometimes three to 15 times the value of the investments,” according to the statement. “Instead of investing the funds, the defendants used them to pay personal loans, credit card balances, mortgages, vehicle purchases and other personal expenses.”
If found guilty, both men face up to 20 years in prison for the wire-fraud-related charges. They face an additional 10 years for the money laundering counts, as well as up to $1 million in fines.
