State regulators can proceed freezing the bank accounts of an internet pastor from Denver and his spouse who’ve admitted promoting hundreds of thousands of {dollars} in nugatory cryptocurrency.
Denver District Court docket Judge David Goldberg dominated Monday that Eli and Kaitlyn Regalado, together with their firms and church, can not entry their allegedly ill-gotten positive aspects. 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 instances I’ve seen the place somebody within the title of religion, the title of God, preyed upon his congregants and he did so within the title of the lord,” the decide mentioned. He referred to as it “a case of simply unmitigated greed.”
His choice 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, mentioned of an audit of the Regalados’ bank accounts. “Jewellery purchases, holidays, airline tickets, clothes, and residential transforming.”
The Regalados didn’t attend the afternoon listening to. They mentioned final week that they might 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 moderately than incarceration.
As BusinessDen first reported, Eli Regalado informed on-line followers in 2022 that God had informed him to create INDXcoin, a cryptocurrency, and the Kingdom Wealth Trade, an internet market. Inside one 12 months, folks 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, in line with a lawsuit the Division of Securities filed Jan. 16. In the meantime, the Kingdom Wealth Trade closed down in November, leaving INDXcoin consumers unable to commerce or promote.
“The Regalados looted investor funds,” Assistant Lawyer Normal Sarah Donahue informed Goldberg. She referred to as them “seasoned entrepreneurs” who “cruelly manipulated folks.”
Goldberg agreed Jan. 17 to freeze dozens of bank accounts, crypto wallets and Venmo accounts belonging to the Regalados, their firms 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 mentioned 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 1,000,000 {dollars} went to the IRS and some hundred thousand {dollars} went to a house rework that the Lord informed us to do.”
Regalado described how, earlier than INDXcoin, God informed him to create a cryptocurrency, “that cryptocurrency turned out to be a rip-off,” and God then informed him to create INDXcoin to make issues proper. Regalado recalled his deep skepticism at God’s instructions.
“I mentioned, ‘Lord, I don’t wish to do that, I don’t know the way to do that, I don’t have expertise on this business, I don’t know what I’m doing, I don’t wish to be caught up in one thing,’” he mentioned.
“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 nicely, or God remains to be not executed 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 mentioned. “So, the prosecutors need to take that and say, ‘These folks 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 just isn’t executed with this challenge. God just isn’t executed with INDXcoin,” the pastor informed parishioners. “Be a part of us, imagine, and obtain every little thing that God has mentioned about this challenge.”