After publicly denying the allegations, the Rev. Kirbyjon H. Caldwell, a Houston pastor who had the ear of presidents, admitted in a Louisiana federal courtroom on Wednesday to aiding in a multimillion-dollar investment scheme, duping members of his flock into buying phony bonds.

Caldwell, who served as a spiritual adviser to Presidents George W. Bush and Barack Obama, pleaded guilty to a massive wire fraud scheme that helped pay off his personal debt and maintain his lifestyle, according to court documents. The judge set his sentencing for July 22.

The 66-year-old senior pastor of Windsor Village United Methodist Church told Chief U.S. District Judge S. Maurice Hicks Jr. in Shreveport that he’d helped in a conspiracy to commit wire fraud, the same charge his Shreveport-based investment adviser, Gregory A. Smith, had pleaded guilty to on July 23, 2019.

“These defendants used their positions as religious leaders and investment advisers to defraud Louisiana residents - many of whom are elderly and retired,” said U.S. Attorney David C. Joseph. “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.”

Caldwell’s attorneys did not respond to requests for comment.

A representative of Windsor Village who gave her name as Asia declined to comment on the day’s events and quickly ended a phone call from a reporter.

Bishop Scott Jones, of the Texas Annual Conference, issued a statement that he’d learned “with great sadness that Kirbyjon Caldwell has changed his plea to guilty in response to charges of fraud brought against him in 2018.”

Jones noted that since the indictment, Caldwell — who has been free on unsecured bond — continued to serve as senior pastor of Windsor Village United Methodist Church “because the conference has treated him as innocent until proven guilty.”

“Congregational leaders were supportive of his continued ministry while the legal process continued,” Jones said. “I am deeply saddened by this admission of guilt,” he said, explaining the plea triggers a disciplinary process.

“We do not tolerate crimes being committed by our clergy and it is now clear that Kirbyjon Caldwell has violated our standards of conduct. The United Methodist Church’s disciplinary process aims at a just resolution of the complaints against him and will begin immediately.”

He said the church was compassionate toward victims and lamented the damage caused by Caldwell’s behavior. Caldwell’s role at Windsor Village UMC will be determined by a supervisory group among the denomination, in consultation with congregational leaders, Jones said.

With Caldwell at the helm, the congregation of Windsor Village grew from 25 in the early 1980s to more than 16,000 — one of the largest protestant churches in the country. Caldwell also had an investment business.

Federal investigators brought the case against Caldwell and Smith in 2018 for using their status and access to encourage 29 victims to invest about $3.5 million in historical Chinese bonds between April 2013 and August 2014. Caldwell, a Houston native with a degree from Wharton School of Business, and his financial adviser, Smith, told investors they could see returns as high as 15 times their initial investment, according to the indictment.

However, these bonds from the former Republic of China only existed prior to communist takeover in 1949. The Securities and Exchange Commission considers them “collectible memorabilia,” but they are no longer recognized by China’s government and have no investment value, according to court documents.

The evidence in the case revealed that Smith told investors he would eventually sell the bonds and they would get exponential returns on their investments. Following Smith’s fraudulent pitch, the investors were told to wire funds to Caldwell bank accounts. Caldwell, Smith and others divvied up the proceeds and Caldwell used approximately $900,000 to cover personal loans, mortgages and credit cards and pay other expenses. Smith spent his $1.08 million cut to pay off loans, buy two luxury sport utility vehicles and make a down payment on a vacation property.

Over time, investors began asking why they hadn’t received the promised returns. Caldwell and Smith gave excuses, but defended the scheme and made more promises.

Caldwell faces five to seven years in prison, a fine of up to $250,000, and up to three years of supervised release. He has made partial restitution to the victims, and agreed Wednesday to pay the remaining $1,951,478.00, before sentencing this summer.

Caldwell ardently denied the allegations in March 2018 and friends, leaders and congregants rallied behind him, calling him a “pillar” of the community and a man of upstanding character.

Caldwell befriended Bush when he was governor, and he provided the benediction for his 2001 inauguration in Washington, D.C. He became a strong ally to Obama.

gabrielle.banks@chron.com