Denver Pastor Eligio Regalado has been charged with civil fraud after pocketing $1.3 M of donations in a cryptocurrency scheme.
Along with his wife Kaitlyn, Regalado was charged on Thursday, Jan. 17, in a civil complaint filed in Denver District Court by the Colorado Attorney General’s Office, the Colorado Division of Securities said in a statement.
The pastor and his wife marketed their “practically worthless” cryptocurrency, INDXcoin, to Christian communities in Denver, telling them that “God told him people would become wealthy” if they invested, the Colorado Division of Securities said.
INDXcoin was offered to Denver-area Christians through the Kingdom Wealth Exchange, according to the BBC. This was an online cryptocurrency exchange owned and operated by the Relgados, despite them having “no experience” in cryptocurrency the complaint said.
However, following the exposure of his scheme, the pastor insisted in a video statement that “the Lord told him to do it,” per NBC.
The pastor admitted claims that he and his wife pocketed $1.3 million “are true.”
“Out of the $1.3 [million], half a million dollars went to the IRS [Internal Revenue Services], and a few hundred thousand dollars went to a home remodel the Lord told us to do,” Regalado said in the video.
According to the complaint, as reported by the BBC, the couple also allegedly spent their nearly 300 investors’ funds on a Range Rover, luxury handbags, jewelry, an au pair, boat rentals and snowmobile adventures.
Per the New York Times, Regalado said that he did not want investors to be “mad” at the prosecutors.
“They have to do this,” he said. “I mean, if you think about this: We sold a cryptocurrency with no clear exit. We did. We took God at his word.”
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Per NYT, the pastor went on to admit that investors were unable to withdraw their money due to problems with the cryptocurrency exchange.
Regalado insisted in the video that he still hoped that investors could get their money back, and that he believed “God is going to work a miracle in the financial sector.”
Colorado Securities Commissioner Tung Chan said: “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.”
He continued, “New coins and new exchanges are easy to create with open source code. We want to remind consumers to be very skeptical.”
The pair are scheduled to appear in Denver District Court next week.