Shortly
- SEC accuses PGI Global’s CEO of running $198M in crypto-Ponzi scheme.
- Unregistered securities were disguised as AI packages and sold to investors.
- The SEC has taken its first action against crypto under the new chairperson Paul Atkins.
The U.S. Securities and Exchange Commission charged PGI Global’s Ramil Palafox on Tuesday for running an alleged $198 million cryptocurrency-based Ponzi Scheme five years earlier. They accused him of misleading investors by falsely promising AI-driven trading and guarantees of returns.
Palafox misappropriated more than $57 million in fiat money and Bitcoin for personal gain and benefiting his closest associates. The SEC made this allegation in an SEC complaint. The following is a statement by the spokesperson.
This is the first enforcement action the SEC has taken under the new chair, Paul Atkins. Sworn-in Only a single day ago.
According to SEC, Palafox used PGI Global (short for Praetorian group International) as a cover for selling unregistered security under the guise of crypto-industry buzzwords. .
Palafox advertised “membership packages”, which allegedly promised returns up to 200% through a crypto- and forex trading platform supposedly powered by AI.
Formerly known as PGI Global UK Ltd., the crypto-trading firm was closed down in September 2022 by the U.K. High Court for running a fraud investment scheme.
Between July 2020 and February 2021, PGI Global collected approximately £612,425 (US$815,000) from investors.
When the returns promised failed to materialize investors could not withdraw their money.
Palafox in the U.S. did not take part in the investigation. The U.S. Department of Justice and the U.S. Department of the Treasury seized the company's website after a warrant was issued by the U.S. District Court for the Eastern District of Virginia.
“PGI Global never had an 'Auto Trading' platform and was conducting little to no trading of any kind on investors’ behalf,” the court filing reads.
The funds raised by investors were instead allegedly used for a Ponzi scheme of payments and financing Palafox’s luxurious lifestyle. These included multiple Lamborghinis and 1,18 million dollars worth of Cartier jewelery, as well as a $1.7-million home in Las Vegas.
Palafox was accused in the complaint of manipulating dashboards, faking returns to investors and fake crypto transactions.
Laura D’Allaird said, “His false claim of expertise in crypto and his supposed AI powered auto trading platform was just a mask for an international securities scam.”
Palafox is also accused by the SEC of having transferred assets to prepare for collapse.
The complaint names four relief defendants, including Palafox’s wife, mother, and brother-in-law, and seeks the return of assets and funds they received, such as a $320,000 mortgage payoff, a Range Rover, and luxury goods from Louis Vuitton and Hermès.
It is asking for a court order to ban Palafox from participating in any crypto- or MLM related securities offerings. The request also includes civil penalties, and the disgorgement in full of all funds. Federal prosecutors in Virginia have indicted Palafox in an unrelated criminal case.
Sebastian Sinclair is the editor
