A Colorado pastor who is charged with stealing more than $1m from his Christian community in a cryptocurrency scheme has admitted to the fraud but argued that God instructed him to carry it out.
Eli Regalado and his wife, Kaitlyn, are charged with creating and selling their cryptocurrency, known as “INDXcoin”, to Christians based in their home town of Denver, Colorado, allegedly telling would-be investors that the Lord had told him people would become rich if they invested, the state’s division of securities announced in a press release on Thursday.
But INDXcoin was “practically worthless” in reality, prosecutors said in the statement. Investors lost millions of dollars while the Regalados used their investments for lavish living.
In a video statement about the charges, Eli admitted that the couple had squandered $1.3m that was raised through cryptocurrency.
“The charges are that me and Kaitlyn pocketed $1.3m,” Regalado said in the video published to INDXcoin’s website on Friday. “I just wanted to come out and say those charges are true.”
Regalado added: “A few hundred thousand dollars went to a home remodel the Lord told us to do.
“We took God at his word and sold a cryptocurrency with no clear exit.”
Regalado added that the couple still believes that God will “work a miracle in the financial sector”.
In total, INDXcoin raised about $3.2m from more than 300 people between June 2022 and April 2023. The Regalados took at least $1.3m of that – more than half – for personal, luxury purchases, including jewelry, an au pair and a pricey home renovation project.
The Regalados also pocketed at least $290,000 for their online-only church, Victorious Grace church, despite there being no physical location for it, BusinessDen reported.
The Regalados additionally had no experience with cryptocurrency. A third-party auditor also said the INDXcoin code had significant technical problems, but the Regalados continued to market the cryptocurrency as a low-risk, high-reward option.
Eli had claimed to investors that an amount of the raised money would be used to help widows and orphans. But those purported payments were also personally spent by the Regalados, the Denver Post reported.
“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,” the Colorado securities commissioner, Tung Chan, said in Thursday’s statement, adding that consumers should remain “very skeptical”.
Civil fraud charges have been filed against the Regalados as prosecutors allege the couple violated several tenets of the Colorado Securities Act.
The couple is scheduled to appear in Denver state court in the coming days, NBC News reported.
The Regalados did not respond to the Guardian’s request for comment.
Both INDXcoin and the Kingdom Wealth Exchange – where INDXcoin was exclusively available – were shut down on 1 November, BusinessDen reported.