Derek Hawkins, Washington Post, March 30, 2018
A Houston megachurch pastor and longtime spiritual adviser to President George W. Bush was indicted in federal court Thursday on claims that he sold more than $1 million in worthless Chinese bonds to vulnerable and elderly investors, some of whom lost their life savings to the alleged scheme.
A federal grand jury in Shreveport, La., returned a 13-count indictment accusing the Rev. Kirbyjon H. Caldwell and financial planner Gregory Alan Smith of wire fraud, money laundering and conspiracy, prosecutors said in a news release.
The two men were also sued by the Securities and Exchange Commission in the same federal court on allegations that they violated financial laws.
According to prosecutors, Caldwell used his influence as the pastor of the 16,000-member Village United Methodist Church to dupe investors into buying historical Chinese bonds issued decades ago.
Caldwell and Smith, a 55-year-old who operates a Shreveport-based financial management firm, allegedly promised investors sky-high returns — sometimes 15 times what they invested — assuring them all along that they could be later sold for tens of millions of dollars.
In reality, prosecutors said, the bonds were collector’s items. “These bonds were issued by the former Republic of China prior to losing power to the communist government in 1949,” U.S. Attorney Alexander C. Van Hook said in a statement. “They are not recognized by China’s current government and have no investment value.”
The indictment and SEC lawsuit could mark a humiliating fall from grace for Caldwell, a prominent religious leader who long held the 43rd president’s ear as his closest spiritual adviser. After developing a friendship with Bush when he was the Texas governor, the 64-year-old pastor led the benediction at both of Bush’s inaugurations and officiated his daughter Jenna’s wedding in 2008. The same year, he endorsed President Barack Obama in his bid for the White House.