Pastor and wife charged with $1m fraud after ‘God told him' to sell crypto to his flock and spent it on vacations

Yahoo

14 hours ago

A Denver pastor and his wife have been accused of running a cryptocurrency scam and using the proceeds to pay for a home renovation and vacations.
Eligio 'Eli' Regalado and Kaitlyn Regalado were indicted on 40 counts of theft, securities fraud and racketeering, the Denver District Attorney's Office said last week. Prosecutors say the Regalados solicited $3.4 million from investors looking to buy their cryptocurrency, INDXCoin, but only a 'small amount of the proceeds went to the business venture.'
Instead, the Regalados are accused of spending at least $1.3 million of those proceeds on personal expenses, including a home renovation that they said 'the Lord' told them to do, prosecutors said. The couple is also accused of spending it on airline tickets, motel rooms and high-end retail merchandise, among other personal expenses.
The cryptocurrency has 'zero value' and 'all of the investors lost all of their money,' prosecutors said.
The couple maintains INDXcoin is not a security — which is a tradable or sellable financial asset — and therefore it did not require licensing or registration, The Denver Gazette reports. Instead, they say it's a 'utility coin' — which is tradable for products or services — to give people access to online faith-based communities.
The couple was arrested earlier this month, but both are now out on a $100,000 property bond, according to the Gazette. The judge ordered that they will have 'intensive pretrial supervision' and must turn over their travel documents. The Regalados did not have attorneys and told the court they don't qualify for public defenders, according to the Gazette.
Their next court hearing is set for September 11.
The Independent has contacted the couple for comment through the INDXcoin website.
Eli Regalado said 'the Lord' brought him the idea for INDXcoin in October 2021, according to the indictment. He went on to tell his followers 'God' told him and his wife to start the cryptocurrency, prosecutors said.
The couple encouraged investors 'to have faith that their investment in INDXcoin would lead to 'abundance' and 'blessings,'' according to the indictment.
Between January 2022 and July 2023, the couple is accused of taking funds from about 300 investors who thought their funds would help pay for INDXcoin and the Kingdom Wealth Exchange, the cryptocurrency exchange where people could sell and trade the coin.
Colorado Securities Commissioner Tung Chan brought civil charges against the couple in January 2024. Chan alleged the couple violated the anti-fraud, licensing and registration provisions of the Colorado Securities Act. The Denver District Court granted a preliminary injunction and asset freeze shortly afterward.
'The complaint alleges that Regalado targeted Christian communities in Denver and claimed that God told him directly that investors would become wealthy if they put money into INDXcoin,' the Colorado Department of Regulatory Agencies said in a statement.
Chan's office is seeking a freeze on the couple's assets, a permanent injunction and $3.4 million in restitution, according to The Denver Gazette. The couple said they 'did not intend to defraud investors,' and argued they 'acted based on their religious mission and sincere belief in the project's potential,' according to court documents reviewed by the Gazette.
The couple also argued the coin was not a security. Last summer, Eli Regalado posted a video denying the allegations, similarly arguing that INDXcoin was not a security.
'My plan was to let this thing play out in court, not say anything until the case was done, but the Lord told me, he goes, 'Son, you need to speak out, you need to speak out against this evil assignment on your life and be transparent with the community,'' he said.
A bench trial was held in May and the couple is awaiting a ruling from the judge, according to the Gazette.
Solve the daily Crossword