Beware of bond-bearing pastors.
Kirbyjon Caldwell, a Houston pastor said to be the spiritual adviser to Presidents George W. Bush and Barack Obama, defrauded 29 elderly investors by selling them worthless pre-Revolutionary Chinese bonds, federal regulators claim.
Caldwell raised as much as $3.4 million from his victims, the Securities and Exchange Commission alleges.
The pastor, who ran the alleged scam in 2013-14 with Gregory Alan Smith — who paraded as a financial planner despite being barred by the Financial Industry Regulatory Authority in 2010 — told the “vulnerable and elderly” investors the bonds were worth millions, it is alleged.
In fact, the SEC said, the bonds were nothing more than “collectible memorabilia with no meaningful investment value.”
“Caldwell took advantage of his victims, encouraging them to remain faithful even as he and Smith broke that faith, stealing from elderly investors in an outright fraud,” Eric Bustillo, director of the SEC’s Miami’s office, said in a statement.
Caldwell, even after the SEC filed its civil complaint, remained unrepentant, pooh-poohing the SEC charges and maintaining the bonds are “absolutely legitimate.”
“I am absolutely innocent, I think the charges are baseless,” Caldwell said in an interview with the local ABC TV affiliate.
“[Caldwell’s] dealings in these transactions were always in good faith and in an absolute belief that the investors would positively benefit,” Dan Cogdell, a lawyer for Caldwell, said in a statement.
“Simply put, he is innocent of all the charges and will be absolved,” Cogdell said.
The bonds, in default since 1939, are not recognized by the Chinese government, the SEC said.
The victims were so sure of the bonds’ legitimacy that some liquidated their annuities to invest, the SEC claimed.
“Caldwell and Smith used these accounts in part to pay for personal expenses, including mortgage payments in the case of Caldwell and luxury automobiles in the case of Smith,” the SEC said in the complaint.
A third accomplice, New Jersey-based lawyer Shae Yatta Harper, was charged by the SEC with aiding and abetting the alleged scheme but settled with the Wall Street watchdog without admitting or denying wrongdoing.
The Justice Department lodged criminal charges against Caldwell and Smith on Thursday. They face up to 20 years in prison.
Despite the charges against him, Caldwell still plans to preach on Easter Sunday.
“Oh yes,” Caldwell said when asked by the Houston ABC affiliate.
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