State regulators can proceed freezing the financial institution accounts of an internet pastor from Denver and his spouse who’ve admitted promoting tens of millions of {dollars} in nugatory cryptocurrency.
Denver District Court docket Choose David Goldberg dominated Monday that Eli and Kaitlyn Regalado, together with their corporations and church, can’t entry their allegedly ill-gotten good points. He additionally barred the native couple from promoting their cryptocurrency or different investments in Colorado.
“This case is a tragic case for me. It’s one of many extra egregious circumstances I’ve seen the place somebody within the identify of religion, the identify of God, preyed upon his congregants and he did so within the identify of the lord,” the choose stated. He known as it “a case of simply unmitigated greed.”
His determination adopted a two-hour listening to and the testimony of state securities investigators.
“The crimson flags have been their expenses for personal purposes,” Ioana Dobra, a fraud investigator with the Colorado Division of Securities, stated of an audit of the Regalados’ financial institution accounts. “Jewellery purchases, holidays, airline tickets, clothes, and residential transforming.”
The Regalados didn’t attend the afternoon listening to. They stated final week that they’d be out of city and requested for it to be rescheduled. Goldberg declined to reschedule it.
The Regalados are being sued by the Colorado Division of Securities for securities fraud. Their expenses are civil, not prison, and punishable by fines relatively than incarceration.
As BusinessDen first reported, Eli Regalado instructed on-line followers in 2022 that God had instructed him to create INDXcoin, a cryptocurrency, and the Kingdom Wealth Alternate, an internet market. Inside one yr, individuals purchased $3 million to $4 million value of the cash.
Not less than $1.3 million of that went on to the Regalados, who spent it on a Range Rover, jewelry, luxury handbags, cosmetic dentistry, home renovations and an au pair, based on a lawsuit the Division of Securities filed Jan. 16. In the meantime, the Kingdom Wealth Alternate closed down in November, leaving INDXcoin consumers unable to commerce or promote.
“The Regalados looted investor funds,” Assistant Legal professional Common Sarah Donahue instructed Goldberg. She known as them “seasoned entrepreneurs” who “cruelly manipulated individuals.”
Goldberg agreed Jan. 17 to freeze dozens of financial institution accounts, crypto wallets and Venmo accounts belonging to the Regalados, their corporations and Victorious Grace Church for 2 weeks. Monday’s listening to was about whether or not that freeze ought to proceed.
On Jan. 19, Eli Regalado posted a seven-minute video responding to BusinessDen’s article. The video has since been deleted from INDXcoin’s web site and social media.
“So, the costs are that Kaitlyn and I pocketed $1.3 million and I simply wish to come out and say that these expenses are true,” he stated within the video. “There was $1.3 million that has been taken out of a complete of $3.4 million. Out of that, half of one million {dollars} went to the IRS and some hundred thousand {dollars} went to a house transform that the Lord instructed us to do.”
Regalado described how, earlier than INDXcoin, God instructed him to create a cryptocurrency, “that cryptocurrency turned out to be a rip-off,” and God then instructed him to create INDXcoin to make issues proper. Regalado recalled his deep skepticism at God’s instructions.
“I stated, ‘Lord, I don’t wish to do that, I don’t know the way to do that, I don’t have expertise on this trade, I don’t know what I’m doing, I don’t wish to be caught up in one thing,’” he stated.
“One in every of two issues have occurred: Both I misunderstood God and each considered one of you who prayed and got here in (did) as properly, or God continues to be not accomplished with this challenge.”
Within the video, which was performed in Goldberg’s courtroom Monday afternoon, Regalado urged his followers to not blame the Colorado Division of Securities for suing him.
“If you concentrate on it, we offered a cryptocurrency with no clear exit. We did. We took God at his phrase and offered a cryptocurrency with no clear exit,” he stated. “So, the prosecutors must take that and say, ‘These individuals willingly offered a cryptocurrency with no clear exit.’ Now, we’re going to go to courtroom, we’re going to argue our case, we’re going to say, ‘Right here’s why we did it.’”
“God will not be accomplished with this challenge. God will not be accomplished with INDXcoin,” the pastor instructed parishioners. “Be part of us, imagine, and obtain every thing that God has stated about this challenge.”
