Federal officials on Thursday charged a Texas pastor and Louisiana financial planner with defrauding investors out of close to $1 million by selling them defunct Chinese bonds.

The Securities and Exchange Commission (SEC) charged Kirbyjon Caldwell of Houston and Gregory Allen Smith of Shreveport, La., with multiple counts of fraud over a scheme affecting at least 27 mostly elderly investors from 2013 to 2014.

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Caldwell — pastor of Houston megachurch Windsor Village United Methodist — and Smith allegedly promised investors high returns on bonds issued by the Republic of China before 1949, when communist forces successfully revolted and took control of the government.

Those bonds have been in default since 1939, according to the SEC, and the obligations are not recognized by China’s current government.

"Our laws do not tolerate materially misleading statements to exploit vulnerable investors who, in this case, looked up to a prominent pastor," said Eric Bustillo, director of the SEC's Miami Regional Office.

"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."



Caldwell has ties to former President George W. Bush, a fellow Texan. Caldwell served as a spiritual adviser to Bush, introduced the GOP presidential nominee at the 2000 Republican National Convention, and delivered the opening prayer at his first inauguration.

Caldwell went on to endorse former President Obama in 2008. He defended Obama's Christian faith while he was subject to conspiracy theories about his true nationality and religion.

Caldwell and Smith allegedly promised investors that their money would be used to buy and sell historic Chinese bonds, which they claimed were worth tens of millions of dollars. They also allegedly claimed that the bonds were redeemable for gold or silver and that there was a high demand for such bonds in financial markets.

The SEC alleged that most of Caldwell and Smith’s investors were “unsophisticated retirees who liquidated their annuities to invest in this scheme pursuant to Smith’s advice.”

Caldwell and Smith then allegedly strung investors along with various excuses as to why they were unable to sell the bonds while they used the funds for their personal expenses. None of the victims have received returns on the money, according the SEC, and most have not received their principal investment back.

Both Caldwell and Smith could face decades in prison and up to $1 million in fines. Smith was banned from financial advising in 2010, while Caldwell has written two books on business: “The Gospel of Good Success” and “Entrepreneurial Faith: Launching Bold Initiatives to Expand God's Kingdom.”