Spectrally efficient 16 quadrature amplitude modulation-orthogonal frequency division multiplexing (QAM-OFDM) system using specifications of commercially available high-power phosphorous coated LED (PLED) is proposed in this study. To address the challenges of signal attenuation and limited bandwidth, systems integrated with a band pass filter (BPF) after the photodetector and optical preamplifier. The effect of BPF bandwidth and preamplifier gain on the performance of 16 QAM-OFDM system have been investigated. Results demonstrated that 375 MHz bandwidth evaluated from 1.5 × symbol rate, offered an optimum performance achieving minimum bit-error-rate of 3.05 × 10⁻⁴. For preamplifier gain of 20 dB, we achieved a maximum distance of 3 m which is limited to 1.5 m for lower gain values. With BPF-optimized bandwidth and a preamplifier gain of 20 dB, we have achieved a data rate of 5 Gbps for maximum distance up to 2 m while considering the super-forward-error-correction limit of 1.863 × 10⁻². With data rate of 6 and 7 Gbps, the distance lower down to 1.8 and 1.5 m, respectively.