SEC and DOJ Charge Ramil Palafox in $200M Crypto Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC), together with federal authorities, has brought charges against Ramil Palafox, a citizen of both the U.S. and the Philippines, alleging he masterminded a sprawling cryptocurrency deception. This scheme reportedly stripped more than 90,000 people of $200 million. On April 22, the SEC laid out its case, asserting that Palafox diverted over $57 million from his venture, PGI Global, between early 2020 and late 2021.

The SEC contends that Palafox leaned on a multilevel marketing setup to perpetuate what they describe as a “Ponzi-like” fraud. He enticed people with assurances of earnings from Bitcoin and forex markets, boasting about his deep knowledge of cryptocurrencies and a cutting-edge AI trading system. Yet, the SEC insists this was mere trickery. Rather than investing, Palafox allegedly redirected the money to reward earlier participants and enrich himself, a ruse that held until PGI Global fell apart in 2021.

Palafox is said to have hosted grand gatherings in places like Dubai and Las Vegas to draw in fresh faces. He dangled incentives for those who brought others into the fold, amplifying the scam‘s reach. The SEC highlights how he splurged on extravagant items—think luxury vehicles, timepieces, and residences—all funded by the cash he took from investors. “Palafox lured people with tales of surefire gains from advanced crypto and forex trading, but instead of putting money to work, he treated himself and his loved ones to cars, watches, and properties,” remarked Scott Thompson, a senior official at the SEC’s Philadelphia branch.

The accusations from the SEC pin Palafox with breaking key securities laws related to fraud and registration. Theyre pushing for a court order to stop him from dealing in securities or crypto moving forward, alongside demands for him to repay what he gained and face financial penalties.

Federal Criminal Charges and Asset Seizure

Meanwhile, the U.S. Attorney‘s Office in Virginia’s Eastern District has stepped in with its own legal salvo. A confidential indictment from March 13 levels charges of wire fraud, money laundering, and shady financial dealings against Palafox. The prosecution alleges he fed investors a line about earning steady daily profits—anywhere from 0.5% to 3%—through Bitcoin trades, all while hiding the truth about PGIs finances, credentials, and activities.

Court documents paint a picture of Palafox claiming his team could profit no matter which way Bitcoins value swung. In reality, prosecutors say, the bulk of the money never touched cryptocurrency markets, leaving many who trusted him out of pocket.

If found guilty, Palafox stands to lose a hefty haul: over $1 million in cash, a fleet of 17 cars—including two Teslas, a Ferrari 458 Special, twin Lamborghinis, and a pair of Porsches—plus a trove of designer gear like bags, shoes, and jewelry.

The Collapse of PGI Global and Related Companies

The web of deceit wasn‘t limited to PGI Global alone. Another outfit, Praetorian Group International Trading Inc., tied to Palafox, got caught up in the mess. Back in 2021, the Justice Department took over its website, a move that led to its UK arm being dismantled by a High Court ruling, all part of the broader probe into Palafox’s dealings.

This marks a notable crypto crackdown under Paul Atkins, the SECs new chair, who took office on April 22. Earlier this year, the agency had gone after Nova Labs for peddling unregistered securities linked to Helium mining gear, a matter settled in April with a $200,000 fine.

As these cases unfold, those misled by Palafoxs hollow crypto and forex pledges may never see their money again, a harsh lesson in the perils of diving into unchecked crypto ventures.