TLDR
- SEC and federal prosecutors charged Ramil Palafox with operating a $198 million crypto scheme
- Palafox allegedly misappropriated over $57 million for luxury purchases
- PGI Global promised guaranteed returns from Bitcoin and forex trading
- The scheme used multi-level marketing tactics to recruit approximately 90,000 investors
- This is the first crypto case under new SEC Chair Paul Atkins, who took office April 22, 2025
The Securities and Exchange Commission (SEC) and federal prosecutors have charged Ramil Palafox with orchestrating a fraudulent crypto scheme that allegedly defrauded approximately 90,000 investors out of $198 million between January 2020 and October 2021.
Palafox, a dual citizen of the United States and the Philippines, operated PGI Global, which claimed to be a legitimate cryptocurrency and foreign exchange trading company. The SEC alleges that Palafox misappropriated more than $57 million of investor funds for personal use.
According to the complaint filed in the U.S. District Court for the Eastern District of Virginia, Palafox marketed “membership packages” to investors with promises of guaranteed high returns from Bitcoin and forex trading. Investors were told they could earn daily returns ranging from 0.5% to 3%.
The SEC claims Palafox used false promises to attract investors, including claims about crypto industry expertise and a supposed AI-powered auto-trading platform. In reality, prosecutors allege most of the investors’ money was never used to buy or trade Bitcoin.
Luxury Lifestyle Funded by Investor Money
Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office, stated that “Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading, but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds.”
The indictment details an extensive list of assets that would be subject to forfeiture if Palafox is convicted. These include over $1 million in cash and 17 vehicles, including two Teslas, a Ferrari 458, two Lamborghinis, and two Porsches.
Luxury retail items, designer bags, wallets, shoes, jewelry, and watches were also allegedly purchased with investor funds. The complaint characterizes the operation as a “Ponzi-like” scheme where new investor funds were used to pay supposed returns to earlier investors until its collapse in late 2021.
Multi-Level Marketing Tactics
The SEC alleges that Palafox used multi-level marketing tactics to expand his scheme. Investors were offered referral bonuses to recruit others, effectively turning them into promoters of the fraudulent operation.
The complaint states that Palafox hosted lavish events in Dubai and Las Vegas to recruit new members. These events, combined with the referral system, helped PGI Global attract approximately 90,000 investors worldwide.
Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit, noted that Palafox “used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed.”
The Justice Department alleges that Palafox told investors that his traders could make money regardless of whether Bitcoin prices were rising or falling. He also allegedly misled investors about PGI’s profitability, licenses, and business activities.
The SEC’s complaint charges Palafox with violating anti-fraud and registration provisions of federal securities laws. The regulator is seeking permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties.
The SEC has also named BBMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura as relief defendants, seeking disgorgement of their alleged ill-gotten gains plus interest.
In parallel with the SEC action, the U.S. Attorney’s Office for the Eastern District of Virginia has brought criminal charges against Palafox. These include wire fraud, money laundering, and unlawful monetary transactions.
This case marks the first crypto-related enforcement action under new SEC Chair Paul Atkins, who was sworn in on April 22, 2025. Atkins is viewed by many in the cryptocurrency industry as more favorable toward digital assets than his predecessor.
The SEC had previously brought a case against Nova Labs in January 2025, accusing it of selling unregistered securities by offering devices that mined Helium tokens. That case was settled in April with a $200,000 civil penalty and the lawsuit being dismissed.
Various companies linked to PGI Global were included in the investigation, including Praetorian Group International Trading Inc. The website for this company was seized by the Department of Justice in 2021, leading to the shutdown of its UK-based operations by the UK’s High Court.
The SEC’s Office of Investor Education and Advocacy directs investors to resources on detecting and avoiding pyramid schemes posing as multi-level marketing programs. More information is available at Investor.gov.
