By Brian Maass, Colin McIntyre
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COLORADO (KCNC) — A man who called himself a “Crypto Pastor” and is accused of diverting $1.3 million from investors in his crypto scheme had spent time in a Colorado prison for stealing cars, had been previously found guilty of theft and is described by one of his ex-wives as “a scammer … a fraud” and a “con man,” according to a CBS Investigation. Eli Regalado said his scheme was inspired by God.
Regalado and his current wife, Kaitlyn, are facing 40 counts of racketeering, theft and securities fraud after being indicted by a Denver grand jury.
Contacted by CBS News Colorado, Regalado said “Our God whom we serve will deliver us.” He declined further comment. His wife’s, attorney, Scott Reisch, said he had no comment on the case against Kaitlyn Regalado. But in an interview, one of Eli Regalado’s ex-wives, Nicole Brown, had plenty to say about the man she was married to for three years, from 2017 through 2020. She said he was initially “charming, charismatic,” but that changed after she said Regalado coerced her into eloping and getting married.
“He told me ‘If you don’t marry me, you don’t love me.’ So I felt manipulated,” said the 32-year-old Denver native. She was 23 when she first met Regalado, who was 37.
She said after they got married “the mask slipped,” and Regalado became a different person.
“He would get angry and start throwing things … manipulative and abusive and tell me I was a b–h,” she recounted.
Brown said Regalado was not religious when they got married, did not go to church or read the Bible. While he had a background in marketing startups, Brown said, “He just thought, I’m going to pivot and now I’m going to believe in God and I’ll find a new audience to preach to and get their money from.”
“He was all about get rich quick — he wanted to take people’s money and sell them lies and then he would profit off it,” she said.
She said he began “speaking in tongues” and said “God was talking to him.”
“It was just like he went mad,” she said.
Before she left him and got a divorce, Brown said Regalado told her about his criminal past.
“He told me he had been to prison twice, once for stealing cars. He told me he would dress up as a valet and steal cars that way. And racketeering, also making fake licenses for people.”
State criminal records show the following about Regalado:
– He was charged with theft in Jefferson County in 2000 and pleaded guilty. – He pleaded guilty to 3rd degree assault in Jefferson County in connection with a 2001 incident in which he smashed a bottle on another man’s head during a scuffle. He was initially charged with assault with a deadly weapon but pleaded guilty to a lesser charge. Regalado said the 2001 incident in the Colorado county consisted of him smashing “a bottle over a guy’s face … almost killed him.” – He was arrested in 2004 in Jefferson County for driving under the influence but pleaded guilty to driving while impaired. – He was arrested 1999 in Jefferson County for aggravated motor vehicle theft. He pleaded guilty in 2000, was sentenced to eight years in prison and served time in jail and in a Colorado prison.
In a podcast interview, Regalado said he was sent to “big boy prison” after he was caught “stealing cars and making false birth certificates.”
“I found it astonishing that people would give him tens of thousands of dollars for this (crypto) thing, but knowing who he is and how he could spin things, it almost made sense in the worst way,” said Nicole Brown.
State securities regulators and Denver prosecutors say in 2022 and 2023, Eli and Kaitlyn Regalado solicited $3.4 million from some 300 investors who were members of their online church — Victorious Grace Church — or part of the larger Christian community. In online videos, Eli Regalado promised investors in their crypto currency plan “exorbitant” returns. He said God told him to press ahead with the cryptocurrency plan telling investors they would “have more money than you’ve ever had in your life.”
Regalado said God told him to set up the crypto currency because “I knew you would take it all the way.”
But the crypto investment plan quickly fell apart and Regalado later admitted in an online video for his followers that he and his wife had diverted more than $1.3 million of investors’ money to pay their taxes, pay for dental work and purses and designer shoes along with luxury vacations, a Range Rover and the remodeling of a home that Regalado said “that the Lord told us to do.”
In a widely circulated video, Regalado addressed the accusations saying, “the charges are that me and Kaitlyn pocketed $1.3 million… I just wanted to come out and say those charges are true.”
CBS Colorado spoke to three of those investors, who all asked they not be identified.
“He has done too much damage to me and so many other really good people,” said a Colorado Springs man who was a close friend of Regalado’s. “I would have nothing positive to say at this point.”
Another investor said he gave Regalado about $10,000 “and do not expect any of it to be recovered.”
He said he learned of Regalado’s business plan through his Christian community.
In hindsight, I should have done deeper due diligence. I was also uncomfortable with some of the religious messaging used to build trust,” he said.
A third investor, a woman living out of state who knew Regalado since the two were children, said she made a “family investment” but declined to cite the amount.
“No one was forced” to invest, she said. “I just feel the peace of God. God is the only one that knows the intention. Eli has a good heart.”
She told CBS the faith-based scheme falling apart “makes people not believe in God anymore and that’s sad.”
Merkle Science, a company that does blockchain analytics and forensics in an attempt to detect illegal crypto usage, analyzed evidence from Colorado security regulators regarding Regalado’s crypto business plan.
“Religion played a very important role in this scheme,” said Merkle’s CEO, Mriganka Pattnaik.
Pattnaik said analytics indicate the crypto investment wasn’t a cryptocurrency that failed, but an attempt to exploit people for their money.
“It’s highly likely they were using this as a mechanism to deceive people,” said Pattnaik. “They didn’t have the technical acumen or bandwidth to build out a blockchain and actually execute transactions.”
The Merkle CEO said cases like this give cryptocurrency a bad name.
While Eli Regalado is free on $100,000 bond in the Denver criminal case and is next expected in court for an arraignment Dec. 11, a Denver judge ruled in September Eli and Kaitlyn Regalado committed securities fraud in a civil action filed by the Colorado Securities Commission.
“The Regalados are 21st century false prophets who leveraged the new and promising technology of cryptocurrencies to run an old-fashioned scam, victimizing their own congregants and others,” said the state regulatory agency.
The judge entered a $3.3 million judgment against the Regalados and other defendants.
“He’s a snake oil salesman,” said Nicole Brown, “but it’s all for his own gain. Eli is a con man and I feel for anyone who has been conned of their money in this crypto scheme,” said Brown. “I hope he goes to prison for a very long time.”
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