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SEC Charges PGI Global CEO in $198M Crypto Ponzi Scheme
It is a high-profile crypto case as the U.S. Securities and Exchange Commission (SEC) charges a crypto executive with allegedly operating a $198 million Ponzi scheme.
On Tuesday, the SEC officially charged Ramil Palafox, CEO of PGI Global (Praetorian Group International), with operating a fraudulent investment scheme disguised as a crypto and AI-driven trading platform. The case, which the SEC submitted in the U.S. District Court for the Eastern District of Virginia, represents the SEC’s first crypto enforcement under newly installed Chair Paul Atkins.
The Alleged Scheme
According to the SEC, between January 2020 and October 2021, Palafox and his company lured investors with promises of guaranteed high returns—up to 200%—through so-called “membership packages.” These packages were marketed as access to a cutting-edge AI crypto and forex trading platform. However, the SEC alleges that no such trading system ever existed.
Instead, investor funds were reportedly funneled into a Ponzi-style operation, where money from new investors was used to pay earlier participants, creating the illusion of profitability and success.
Misuse of Funds
The SEC’s complaint paints a picture of personal enrichment and deception. More than $57 million in both fiat and Bitcoin was allegedly misappropriated by Palafox for personal luxuries and to enrich close associates. Among the notable purchases:
- A $1.7 million mansion in Las Vegas
- Multiple Lamborghinis
- Over $1.18 million in Cartier jewelry
Palafox is also accused of using circular transactions to fabricate trading activity, manipulating dashboards to show fake returns, and misleading investors into believing the platform was actively and successfully trading.
Family and Luxury Involved
The SEC’s complaint extends beyond Palafox himself. Four additional individuals, including his wife, mother, and brother-in-law, were named as “relief defendants.” These individuals are accused of benefiting from the scheme, receiving lavish gifts and financial transfers such as:
- A $320,000 mortgage payoff
- A Range Rover
- High-end items from Louis Vuitton and Hermès
Regulatory Fallout
The SEC is seeking a permanent ban on Palafox’s involvement in any crypto or multi-level marketing (MLM)-related securities offerings. The agency is also pushing for full disgorgement of illicit gains, civil penalties, and a permanent injunction to prevent future violations.
Federal prosecutors have additionally indicted Palafox in a related criminal case, intensifying the legal consequences he now faces.
A Warning for Investors
Laura D’Allaird, chief of the SEC’s Cyber Unit, emphasized the deceptive nature of the operation:
“His false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”
This case serves as yet another stark reminder to investors: if it sounds too good to be true, especially in the volatile world of crypto, it probably is. Always research thoroughly, and be cautious of schemes that promise guaranteed returns, particularly those involving unregistered securities or unverifiable technologies.
