A Colorado-based pastor for an online church is accused of pocketing $1.3 million through a cryptocurrency fraud scheme told followers in a video statement that the Lord told him to do it.
Eli Regalado and his wife marketed their cryptocurrency, INDXcoin, to Christian communities in Denver, saying God told him people would become wealthy if they invested, the Colorado Division of Securities said in a statement Thursday.
Regalado Spent the Funds on a Home Remodel, a Range Over, Luxury Handbags and Jewelry
INDXcoin raised nearly $3.2 million, the Securities Division said. At least $1.3 million of that went directly to the Regalados or was "used for their own personal benefit," said a complaint filed Tuesday in Denver County District Court.
The Regalados could not be reached for comment. In a video statement to his followers last week, Eli Regalado said the charges that they pocketed $1.3 million "are true."
"Out of the $1.3 [million], half a million dollars went to the IRS, and a few hundred thousand dollars went to a home remodel the Lord told us to do," he said in the video.
The couple also allegedly spent their investors' funds on a Range Rover, luxury handbags, jewelry, an au pair, boat rentals and snowmobile adventures, according to the complaint. The couple were charged with violating anti-fraud provisions under the Colorado Securities Act.
Regalado was Charged After Investors Filed a Complaint Against His 'Low-Risk, High-Profit' Scheme
Colorado Securities Commissioner Tung Chan said she filed the civil fraud charges after she was approached by people who invested and lost money through INDXcoin.
"We allege that Mr. Regalado took advantage of the trust and faith of his own Christian community and that he peddled outlandish promises of wealth to them when he sold them essentially worthless cryptocurrencies," Chan said in a statement.
Regalado advertised INDXcoin through presentations at his church and at others he found through other pastors, according to the legal complaint. From June 2022 to April 2023, the cryptocurrency raised nearly $3.2 million by selling unregistered securities, it said.
Regalado claimed that God told him investors would become wealthy if they put money into INDXcoin, promoting it as a low-risk, high-profit investment pegged to the average value of the top 100 cryptocurrencies, the Securities Division said.
In reality, INDXcoin was "illiquid and practically worthless," the Securities Division said in its release. The cryptocurrency was available only in Kingdom Wealth Exchange, which the Regalados shut down. It can no longer be sold anywhere.
'God is Going to Work a Miracle'
"We took God at his word and sold a cryptocurrency with no clear exit," Regalado in his video address Friday. "What we're believing for still is that God is going to do a miracle. God is going to work a miracle in the financial sector."
In the comments on Regalado's video, dozens of people continue to reassure him that God will "turn the situation around."
Regalado was 22 and serving a prison sentence for "boosting cars" when his faith called him to become a pastor 20 years ago, he said in a YouTube live podcast. He began preaching for the online-only Victorious Grace Church, where he and his wife are listed as the only two employees.
"They specifically went out to the Christian community, and there's a lot of references to scripture and faith. He cloaks himself in that to get people to give their money to him," said Chan, the securities commissioner. "That's really heartbreaking for the people who trusted him."
Eli Regalado, his wife and his three companies are charged with securities fraud, unlicensed broker-dealer activity, selling unregistered securities and imposition of constructive trust. They are scheduled to appear in Denver District Court next week, according to the court docket.