According to a lawsuit filed by the Colorado Attorney General’s Office last week, the founders of INDXCoin are the latest American religious leaders to fraudulently peddle sham investments to their congregations.
Responding to the lawsuit in a video on Saturday, January 20, INDXCoin CEO Eli Regalado acknowledged that he and his wife Kaitlin used investors’ money to remodel their house, but claimed they only did so because God asked them to.
The Attorney General’s lawsuit alleges that Regalado, a pastor, “targeted Christian communities in Denver and claimed that God told him directly that investors would become wealthy if they put money into INDXcoin.”
However, noting that the Regalados “had no experience in cryptocurrency,” the complaint observed that those promises never materialized. On the contrary, “INDXcoin was illiquid and practically worthless,” Colorado Securities Commissioner Tung Chan claimed, accusing the defendants of using investor’s funds “to support their lavish lifestyle.”
In a recent message , Regalado acknowledged the lawsuit’s claim that he and his wife diverted $1.3 million that had been invested in INDXCoin. “Those charges are true,” he stated. Expanding on how the funds were spent, he said that “half a million dollars went to the IRS and a few hundred thousand dollars went to a home remodel that the lord told us to do.”
Nevertheless, the INDXCoin founder said he intends to fight the fraud charges in court.
Regalado’s decision to fight the charges in court is apparently rooted in his faith that “a miracle in the financial sector,” will somehow make investors whole. After all, he claims God promised him that “every seed you sow is going to bring in a harvest.”
In the eyes of the law, however, divine instruction doesn’t negate individual responsibility. Nor does it protect religious leaders who use their influence to sell sham investments from consequences.
For example, Pastor Terry Wayne Millender received an 8-year prison sentence for his role in a fraud scheme that solicited $2 million to fund fake Nigerian oil deals. In a similar case, Pastor Kirbyjon H. Caldwell was sentenced to 6 years in jail for selling worthless bonds issued by the pre-Communist Chinese government as if they were valuable investment instruments.
In the end, if Regalado is found guilty, the INDXCoin case will be remembered as an updated version of an old scam, reinvented for the world of digital assets, but ultimately the same old fraudulent investment scheme.