Federal prosecutors and the U.S. Securities and Exchange Commission have taken action against a man accused of running a crypto scam that tricked around 90,000 people out of a staggering $200 million in the hopes of big returns through Bitcoin and forex trading. The SEC announced on Apr. 22 that it had filed charges against Ramil Palafox, a U.S. and Philippine citizen, accusing him of misusing more than $57 million in investor money.
The funds were reportedly raised through his company, PGI Global, between Jan. 2020 and Oct. 2021. The SEC claims that Palafox ran a “Ponzi-like” scheme using a multilevel marketing setup until the company fell apart in 2021. According to the regulator, he attracted investors by making misleading promises and claiming to be an expert in crypto and promoting what he said was an AI-driven auto-trading platform.
SEC cracks down on Palafox’s Bitcoin Ponzi
The SEC claims Palafox hosted lavish parties in Dubai and Las Vegas to recruit new members. He promised them referral bonuses for bringing in more people and used money from investors to pay off earlier ones, all while pocketing a chunk for himself. Associate director of the SEC’s Philadelphia office, Scott Thompson, said:
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.
In addition, the exchange is charging Palafox with breaking federal securities laws by committing fraud and failing to register properly. They’re seeking a permanent ban on him selling securities and crypto assets in the future, repayment of unethical profits from the illegal activities, and civil penalties.
The SEC’s complaint is running alongside a case from the US Attorney’s Office for the Eastern District of Virginia, which has brought criminal charges against Ramil Palafox. On Mar.13, an indictment was filed in secret, accusing Palafox of wire fraud, money laundering, and illegal financial transactions.
Prosecutors claimed that Palafox deceived investors with fake promises of daily returns between 0.5% and 3% from Bitcoin trading while also hiding crucial details about PGI’s profitability, licenses, and overall business operations.
