A Denver grand jury has indicted a local pastor and his wife on 40 counts of theft, racketeering and securities fraud over an alleged multi-million dollar cryptocurrency scam.
According to the indictment, Eligio “Eli” Regalado and his wife, Kaitlyn, allegedly used their “faith-based connection” to solicit nearly $3.4 million from investors between January 2022 and July 2023, The Independent reports.
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They promised their followers “exorbitant returns” on their investment, but most of that money reportedly ended up funding a lavish lifestyle for the Regalados.
This appears to be a prime example of what’s referred to as “affinity fraud,” a type of investment scam where swindlers are part of a group (or pretend to be part of a group), which they then defraud.
This can be a religious group, ethnic group or even a type of workforce, such as the military — any identifiable group where scammers think they can get members to trust them with their money. Affinity fraud typically involves either a fake investment or one where the scammers lie about the details, such as the riskiness or track record of the investment.
In the case of the Regalados, the couple allegedly took advantage of Eli’s position as a pastor for the online-only Victorious Grace Church to convince members of the Christian community to invest in INDXcoin — a cryptocurrency that Regalado created.
How this pastor’s flock paid the price
Investigators with the Colorado Division of Securities discovered that more than 300 people had invested in the “illiquid” and “essentially worthless” cryptocurrency after Regalado convinced his followers that God will make them wealthy if they were to invest, according to The Associated Press.
In an August 2022 video update, Regalado reportedly told his followers that “the Lord brought this cryptocurrency to me. He said ‘Take this to my people for a wealth transfer.’ It has been confirmed a hundred times since then.” Regalado also claimed investors would be helping widows and orphans.
However, the couple used at least $1.3 million of the money raised to fund their lavish lifestyle, which reportedly included luxury handbags, jewelry, vacations, home renovations, cosmetic dentistry and clothes, according to AP.
“As alleged, INDXcoin maintained zero value and all of the investors lost all of their money,” said the Denver DA in the indictment.
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Americans lost billions to investment fraud last year
Each year, many Americans — as a result of misplaced trust — fall for fraudulent schemes like this one. In 2024, consumers reported losing more than $12.5 billion to fraud, according to the Federal Trade Commission. Those who fell for these schemes reportedly lost more to investment scams ($5.7 billion) than any other category.
The FBI’s Internet Crime Complaint Center received 47,919 complaints of internet-related investment fraud in 2024, leading to aggregate losses of about $6.6 billion, according to the FBI’s Internet Crime Report 2024. Frauds that involved cryptocurrency — across all internet fraud categories — resulted in 149,686 complaints, leading to about $9.3 billion in losses.
So, how can you avoid affinity fraud? The Securities and Exchange Commission (SEC) has some tips that can help you discern a good investment from a bad one.
“Check out everything — no matter how trustworthy the person seems who brings the investment opportunity to your attention,” says the SEC. That means verifying the truth of everything you’re told about the investment before forking over your hard-earned cash.
Secondly, be wary of investments that promise “spectacular profits” or “guaranteed returns,” says the SEC. “If an investment seems too good to be true, then it probably is. Similarly, be extremely leery of any investment that is said to have no risks; very few investments are risk-free.”
And if a pastor is telling you that God appeared to him in a dream and gave him advice on running a cryptocurrency exchange (like Regalado told his ‘investors’), you may want to steer clear.
When it comes to investing, it’s best to be cautious unless you’re dealing with a licensed investment professional with verifiable credentials.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
