Denver Pastor Found Guilty of Defrauding Investors in $3M Crypto Scheme

Jimmy Aki
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A Colorado court has ruled that Denver pastor Eli Regalado and his wife, Kaitlyn, must repay $3.39 million after defrauding hundreds of investors through their church-backed cryptocurrency, INDXcoin. The court also imposed a 20-year ban preventing the couple from selling crypto or any other investment product.

Court Ruling and Ban on Investment Sales

On September 16, the Colorado Division of Securities issued a statement confirming the ruling. Days earlier, the Denver District Court found that the couple violated state securities laws.

The decision follows a bench trial that found the Regalados violated state securities laws. Between January 2022 and July 2023, they raised funds from at least 509 investors for their cryptocurrency, INDXcoin.

https://twitter.com/Sumtoshi/status/1966674610780529054

Judge Heidi Kutcher determined that INDXcoin qualified as a security under the Colorado Securities Act and that the couple misled buyers about its value and safety.

Evidence revealed that Regalado and his wife claimed the token was safer than other cryptocurrencies and promised profits, despite INDXcoin not being tradable on recognized exchanges.

Judge Kutcher noted the pair showed little understanding of the harm they caused. Their expressed intent to continue the project, she said, made a long-term ban necessary.

The court also banned Nathanael Enos, a Colorado Springs associate who promoted INDXcoin. He must repay $19,600 and faces the same 20-year prohibition.

The Genesis of INDXcoin and the Spread of Investment Scams Globally

The scheme was rooted in Victorious Grace Church, an online-only ministry led by the Denver pastor and his wife.

They told followers that investing in INDXcoin was a God-inspired way to grow wealth and sow into the Kingdom. The pitch convinced nearly 300 investors, most of them fellow Christians.

Court records showed that at least $1.3 million went to personal spending, including home renovations, a luxury Range Rover, and more than $90,000 in travel and entertainment.

Testimony revealed the couple claimed these expenses were guided by divine instruction.

At present, the Regalados face 40 criminal counts of theft, fraud, and racketeering, following a grand jury indictment over the $3.4 million crypto scheme.

Colorado Securities Commissioner Tung Chan condemned the couple, calling them false prophets who used faith and new technology to carry out an old-fashioned investment scam.

Globally, regulators are battling the same schemes. In Seattle, the U.S. Attorney’s Office recently moved to seize $7.1 million in cryptocurrency tied to an oil and gas investment scam. Fraudsters there used shell companies and fake escrow accounts to trick investors.

Meanwhile, international courts have dealt with cases of laundering nearly $37 million from American victims through staged crypto opportunities.

These scams, though dressed in modern language, often follow the same playbook: trust is built, money is collected, and investors are left with losses.

The Denver pastor’s case stands as one example of how fraudsters merge faith with promises of technology. The verdict not only holds the couple accountable but also highlights how regulators are responding to evolving forms of financial deception.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.