PGI Global Founder Hit With Fraud Charges in Alleged $200M Crypto Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC) charged the founding father of now-defunct crypto and international alternate funding firm PGI Global, with violating federal securities legal guidelines, alleging he ran a “Ponzi-like scheme” that defrauded traders of practically $200 million — and spent $57 million of buyer cash on Lamborghinis, actual property and luxurious items.

Ramil Palafox, 59, of Las Vegas, Nevada, additionally faces parallel felony fees tied to his function at PGI Global. In March, a Virginia grand jury charged him in a sprawling 23-count indictment that included eight counts of wire fraud. Due to what prosecutors described as Palafox’s “substantial ties” to the Philippines, together with twin citizenship, the decide overseeing his felony case issued an order on Tuesday that he ought to stay in custody till additional discover.

According to court docket paperwork, PGI Global was a crypto funding scheme that ran from January 2020 to October 2021. Approximately 90,000 traders around the globe bought membership packages with both bitcoin or fiat foreign money that promised hefty returns on their investments — as much as 3% every day and a 200% whole return. But as a substitute of really investing his shoppers’ cash, prosecutors say Palafox spent over 1 / 4 of the funds unjustly enriching himself and his relations, and used the remainder to pay again earlier traders in the scheme till it collapsed.

“Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed,” mentioned Laura D’Allaird, chief of the SEC’s new Cyber and Emerging Technologies Unit, in a press assertion. “In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”

Since the start of U.S. President Donald Trump’s second time period in January, the SEC has overhauled its strategy to crypto regulation, dropping investigations and a few litigation in opposition to crypto corporations tied to purported securities violations. But regardless of its about-face on the so-called “regulation-by-enforcement” practiced throughout former Chair Gary Gensler’s tenure, the SEC has promised that it’s going to proceed to go after crypto-related securities fraud.

Similarly, the DOJ has narrowed its strategy to crypto-related prosecution, disbanding its crypto job drive and instructing workers to not criminally cost regulatory violations in circumstances involving crypto. In a memo to workers final month, Deputy Attorney General Todd Blanche instructed prosecutors to focus their efforts on going after “individuals who victimize digital asset investors.”

In Palafox’s case, the SEC is aiming to get traders’ a reimbursement, plus curiosity and civil penalties, in addition to get injunctive aid that might forestall him from comparable crimes in the longer term. The SEC can also be looking for to get a reimbursement from a number of of Palafox’s relations, together with his spouse, Marissa Mendoza Palafox, and his brother-in-law, Darvie Mendoza.

In a submission to the court docket, the DOJ has mentioned that Palafox — if discovered responsible — is dealing with “at least 108-135 months’ imprisonment,” or 9 to 11 years.

Palafox’s lawyer declined to remark.