Shreveport investment adviser swindles clients out of $3.5 million

He used it to pay down loans, purchase two luxury sport utility vehicles and place a down payment on a vacation property.

Shreveport investment adviser swindles clients out of $3.5 million
(Source: Picasa)

SHREVEPORT, La. (KSLA) - A Shreveport businessman has left multiple victims in the lurch. On Tuesday, July 23, Gregory Alan Smith, 55, pleaded guilty before Chief U.S. District Judge S. Maurice Hicks Jr. to conspiracy to commit wire fraud.

According to information presented in court, he persuaded clients to invest funds with him and Kirbyjon H. Caldwell, totaling $3.5 million. The money was allegedly used to invest in historical Chinese bonds. The bonds were initially issued by the former Republic of China, prior to losing power to the communist government in 1949.

However, they are not recognized by China’s current government and have no investment value.

Smith began approaching clients for funding in 2013. His usual sales pitch to investor that Caldwell, the senior pastor at Windsor Village United Methodist Church in Houston, Texas, was putting the bond deal together, had the bonds or was working to get them and was working to sell them.

Smith allegedly added that by investing money with him and Caldwell, the victims would have a partial ownership of the bonds and would quickly receive returns on their investments.

Victims were not told of the true nature of the bonds, nor were they informed that no investor in historical Chinese Bonds had ever had ever obtained the promised return on investment.

Unfortunately, victims were told to cash out any other investments they may have had to participate if they couldn't.

Victims were instructed to wire funds to bank accounts under Caldwell’s control. Then those fund were divided between Smith, Caldwell and others.

In total, Smith received $1.08 million of the total $3.5 million. He used it to pay down loans, purchase two luxury sport utility vehicles and place a down payment on a vacation property. Victims were given excuses when funds never showed up.

Under the terms of his plea agreement, Smith faces five to seven years in prison.

He also faces a $1 million fine, restitution, forfeiture and five years of supervised release.

Smith’s sentencing is scheduled for December 11, 2019. Caldwell’s trial is scheduled for Dec. 2, 2019.

This case was one of the U.S. Attorney’s Office largest-ever nationwide elder fraud sweep, which includes hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.

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