Prominent Texas megachurch Pastor Kirbyjon Caldwell, who was indicted last year for defrauding a number of investors — including members of his 15,000-member church — of more than $1 million, maintained his innocence Tuesday as his co-defendant pleaded guilty to wire fraud.
Caldwell and Gregory Alan Smith, an investment adviser based in Shreveport, Louisiana, were both charged with 13 counts, among them being conspiracy to commit money laundering when they raised around $3.5 million in Historical Chinese bonds from 29 investors between 2013 to 2014.
Caldwell’s attorney Dan Cogdell quickly released a statement after Smith’s guilty plea insisting that it would not affect his client’s “belief that he committed no crime.”
"We are aware that Greg Smith entered a plea of guilty today. That said, Smith’s plea of guilty has no effect on Pastor Caldwell’s belief that he committed no crime. At all times, Pastor Caldwell believed in the legitimacy of the transactions he was involved with. Simply put, at no time did Kirbyjon Caldwell ever intend on defrauding anyone. We look forward to our day in court for the full truth to come out,” he said.
Caldwell and Smith reportedly tricked investors into believing that they were buying the Historical Chinese bonds through a Shreveport-based company called Smith Financial Group LLC.
A release from the Department of Justice noted that the bonds were issued by the former Republic of China prior to losing power to the communist government in 1949.
“They are not recognized by China's current government and have no investment value. Smith and Caldwell promised high rates of return, sometimes three to 15 times the value of the investments. Instead of investing the funds, the defendants used them to pay personal loans, credit card balances, mortgages, vehicle purchases and other personal expenses," the DOJ said.
Caldwell, according to Click 2 Houston, received $760,000, which he used for personal expenses, including mortgage payments. His limited liability company also received $1 million, of which $175,000 was transferred to the pastor. Smith received $1 million of the funds invested which he splurged on luxury vehicles, the indictment said.
None of the investors have gotten back their money, according to court documents.
Smith now faces five to seven years in prison, a $1 million fine, restitution, forfeiture and five years of supervised release. He is expected to know his fate at his sentencing scheduled for Dec. 11.
Caldwell’s trial is expected to start on Dec. 2.
The pastor announced earlier this month that he was diagnosed with stage 1 prostate cancer.
“I want to share with you that earlier this week, I received a call from MD Anderson informing me that I’ve been diagnosed with stage 1 prostate cancer. And thank God that my prognosis does not look like my diagnosis. God was very clear that I’ll die from something as we all will one day but it won’t be from prostate cancer,” he said in a Facebook video.