Trusting members of the Houston church were scammed out of millions. Instead of real financial investments, they were sold memorabilia.
The pastor of one of the largest Protestant churches in the country, a barred broker and an attorney have been charged by the SEC (Securities and Exchange Commission) with defrauding elderly members out of $3.4 million. They were sold interests in what turned out to be worthless pre-Revolutionary Chinese bonds.
Think Advisor’s article, “Megachurch Pastor, Banned Broker Nabbed for Defrauding Elderly Churchgoers,” explains that the SEC’s complaint alleges that, in 2013 and 2014, Kirbyjon Caldwell, senior pastor at Windsor Village United Methodist Church in Houston, and Gregory Alan Smith, a self-described financial planner, who the Financial Industry Regulatory Authority (FINRA) barred from the broker-dealer business after his firing in 2010, targeted vulnerable and elderly investors with false claims that the bonds—collectible memorabilia with no meaningful investment value—were worth millions of dollars.
The SEC also brought actions against their attorney, Shae Yatta Harper. She’s charged with aiding and abetting their fraud.
According to the complaint against Harper, at the pastor’s instruction, “Harper drafted participation agreements in the bonds that were sent to investors,” and she also “controlled the bank account to which most investors sent their funds to invest in this investment opportunity, and distributed investor funds to Caldwell and Smith at their direction.”
Between April 2013 and August 2014, the complaint says the defendants raised at least $3.4 million through a scheme to defraud nearly 30 investors through the fraudulent offer and sale of the bonds. Some of the elderly participants liquidated their annuities and savings to participate in the scheme.
Caldwell has been a board member of various public companies. He currently serves on the board of NRG Energy, which is traded on the New York Stock Exchange. The pastor also acted as a director to a mutual fund complex during the time of the scheme. Caldwell and his wife are the co-owners of LDT LLC, a Wyoming limited liability company that received and held money from investors.
Smith, who is from Shreveport, Louisiana, was associated with a registered broker-dealer from December 1999 to July 2010, according to prosecutors. He was permanently barred from association with any FINRA member in any capacity in July 2010 for commingling investor funds in his business account and for misappropriating investor funds.
Caldwell took advantage of the trust placed in him by elderly churchgoers, exploiting their trust in an example of outright fraud and greed.
Reference: Think Advisor (March 30, 2018) “Megachurch Pastor, Banned Broker Nabbed for Defrauding Elderly Churchgoers”