SEC Charges Prominent Pastor, Financial Planner in Scheme to Defraud Elderly Investors
Pastor Kirbyjon Caldwell and barred financial planner Gregory Alan Smith defrauded 29 elderly investors of at least $3.4 million by selling worthless pre-Revolutionary Chinese bonds as high-value investments, diverting $1.8 million for personal expenses like mortgages and luxury cars, leading to SEC charges for securities fraud and antifraud violations.
The SEC charged Kirbyjon Caldwell, senior pastor of Windsor Village United Methodist Church, and Gregory Alan Smith, a barred financial planner, with defrauding 29 mostly elderly investors of at least $3.4 million by selling them worthless pre-Revolutionary Chinese bonds as lucrative investments. Caldwell and Smith allegedly misappropriated $1.8 million for personal use—including Caldwell’s mortgage payments and Smith’s luxury automobiles—while offshore entities received the remainder of the funds. The SEC accused them of violating federal securities registration and antifraud laws, sought civil penalties and disgorgement, and separately charged attorney Shae Yatta Harper, who settled by paying a $60,000 penalty and accepting a five-year suspension from practicing before the Commission.
The SEC charged Kirbyjon Caldwell, senior pastor of one of the largest Protestant churches in the U.S., and Gregory Alan Smith, a financial planner barred by FINRA since 2010, with orchestrating a fraud targeting vulnerable elderly investors through the sale of worthless pre-Revolutionary Chinese bonds falsely marketed as high-value assets. Between 2013 and 2014, they raised at least $3.4 million from 29 investors, some of whom liquidated annuities to participate, exploiting Caldwell’s religious authority and perceived credibility to gain trust. Of the funds raised, approximately $1.8 million was diverted for personal expenses, including Caldwell’s mortgage payments and Smith’s luxury automobiles, while the rest was sent to offshore accounts. The SEC alleged violations of federal securities registration and antifraud provisions, seeking civil penalties, disgorgement, and other relief. Attorney Shae Yatta Harper was separately charged with aiding and abetting the fraud and settled without admitting or denying guilt by paying a $60,000 civil penalty and accepting a five-year suspension from practicing before the SEC. The investigation was conducted by the SEC’s Miami Regional Office, led by Jacqueline M. O’Reilly and Andre J. Zamorano, with litigation overseen by Wilfredo Fernandez. The SEC emphasized the exploitation of trusting, elderly victims and urged investors to verify credentials via investor.gov to avoid similar scams.
Exhibits & Attached Documents (2)
Extracted insights
- $3.40M $3.4 million $1M–$10M
- $1.80M $1.8 million $1M–$10M
- $60K $60,000 $10K–$100K
- agency director of sec's miami regional office
- person eric i. bustillo
- person gregory alan smith
- person kirbyjon caldwell
- person luxury automobiles
- person mortgage payments
- agency Securities and Exchange Commission
- person shae yatta harper
- SEC charged Kirbyjon Caldwell and Gregory Alan Smith with scheme to defraud elderly investors
- Kirbyjon Caldwell is Senior Pastor at Windsor Village United Methodist Church in Houston
- Gregory Alan Smith is self-described financial planner barred from broker-dealer business since 2010
- Caldwell and Smith raised $3.4 million from 29 mostly elderly investors in 2013 and 2014
- Caldwell and Smith took approximately $1.8 million of investor funds for personal expenses
- Caldwell used funds for mortgage payments
- Smith used funds for luxury automobiles
- SEC charged Shae Yatta Harper with aiding and abetting antifraud violations
- Shae Yatta Harper is from Monmouth Junction, New Jersey
- Harper agreed to pay $60,000 civil penalty
- Harper agreed to suspension from appearing or practicing as attorney before SEC with right to request reinstatement after five years
- Caldwell and Smith violated registration and antifraud provisions of federal securities laws
- Eric I. Bustillo is Director of SEC's Miami Regional Office
The Securities and Exchange Commission yesterday charged the pastor of one of the largest Protestant churches in the country and a self-described financial planner in a scheme to defraud elderly investors by selling them interests in defunct, pre-Revolutionary Chinese bonds. 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 has barred from the broker-dealer business since 2010, targeted vulnerable and elderly investors with false assurances that the bonds—collectible memorabilia with no meaningful investment value—were worth millions of dollars. Caldwell and Smith raised at least $3.4 million from 29 mostly elderly investors, some of whom liquidated their annuities to invest in this scheme. Caldwell and Smith are alleged to have taken approximately $1.8 million of investor funds to pay for personal expenses, including mortgage payments in the case of Caldwell and luxury automobiles in the case of Smith. Offshore individuals received most of the remaining funds. "Our laws do not tolerate materially misleading statements to exploit vulnerable investors who, in this case, looked up to a prominent pastor," said Eric I. 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." The SEC encourages investors to check the backgrounds of people selling investments by using the SEC's investor.gov website to quickly identify whether they are registered professionals and confirm their identity. The SEC's complaint alleges that Caldwell and Smith violated the registration and antifraud provisions of the federal securities laws, and seeks civil penalties, disgorgement, and other forms of relief. In a separate complaint, the SEC charged attorney Shae Yatta Harper of Monmouth Junction, New Jersey, with, among other things, aiding and abetting Caldwell's and Smith's antifraud violations. Harper agreed to settle the SEC's action against her without admitting or denying the SEC's allegations. Among other things, Harper agreed to pay a $60,000 civil penalty and to the issuance of an administrative order suspending her from appearing or practicing as an attorney before the Commission with the right to request reinstatement after five years. The SEC's investigation was conducted by Jacqueline M. O’Reilly and Andre J. Zamorano, with assistance from Allen J. Genaldi, and supervised by Thierry Olivier Desmet in the SEC's Miami Regional Office. The litigation will be led by Wilfredo Fernandez.
The Securities and Exchange Commission yesterday charged the pastor of one of the largest Protestant churches in the country and a self-described financial planner in a scheme to defraud elderly investors by selling them interests in defunct, pre-Revolutionary Chinese bonds. 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 has barred from the broker-dealer business since 2010, targeted vulnerable and elderly investors with false assurances that the bonds—collectible memorabilia with no meaningful investment value—were worth millions of dollars. Caldwell and Smith raised at least $3.4 million from 29 mostly elderly investors, some of whom liquidated their annuities to invest in this scheme. Caldwell and Smith are alleged to have taken approximately $1.8 million of investor funds to pay for personal expenses, including mortgage payments in the case of Caldwell and luxury automobiles in the case of Smith. Offshore individuals received most of the remaining funds. "Our laws do not tolerate materially misleading statements to exploit vulnerable investors who, in this case, looked up to a prominent pastor," said Eric I. 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." The SEC encourages investors to check the backgrounds of people selling investments by using the SEC's investor.gov website to quickly identify whether they are registered professionals and confirm their identity. The SEC's complaint alleges that Caldwell and Smith violated the registration and antifraud provisions of the federal securities laws, and seeks civil penalties, disgorgement, and other forms of relief. In a separate complaint, the SEC charged attorney Shae Yatta Harper of Monmouth Junction, New Jersey, with, among other things, aiding and abetting Caldwell's and Smith's antifraud violations. Harper agreed to settle the SEC's action against her without admitting or denying the SEC's allegations. Among other things, Harper agreed to pay a $60,000 civil penalty and to the issuance of an administrative order suspending her from appearing or practicing as an attorney before the Commission with the right to request reinstatement after five years. The SEC's investigation was conducted by Jacqueline M. O’Reilly and Andre J. Zamorano, with assistance from Allen J. Genaldi, and supervised by Thierry Olivier Desmet in the SEC's Miami Regional Office. The litigation will be led by Wilfredo Fernandez.