- Investors were allegedly lured with promises of AI trading and guaranteed returns up to 200%, while $57 million was misappropriated.
- This case represents the first crypto enforcement action under newly appointed SEC Chair Paul Atkins.
The U.S. Securities and Exchange Commission filed charges Tuesday against Ramil Palafox, CEO of PGI Global, alleging he orchestrated a $198 million cryptocurrency Ponzi scheme. According to the SEC, Palafox deceived investors with false promises of Artificial Intelligence-powered trading and guaranteed profits. The complaint, filed in the U.S. District Court for the Eastern District of Virginia, states that over $57 million in both fiat currency and Bitcoin was diverted for personal expenses.
This enforcement action marks the first cryptocurrency-related case under newly appointed SEC Chair Paul Atkins, who was sworn in just one day prior to the charges being announced. In its statement, the SEC outlined how Palafox allegedly sold unregistered securities disguised as investment packages during a period spanning from January 2020 to October 2021.
FRAUDULENT INVESTMENT STRUCTURE
According to the SEC’s complaint, PGI Global (officially registered as PGI Global UK Ltd) marketed “membership packages” with guaranteed returns as high as 200% through what was claimed to be an AI-powered cryptocurrency and Forex trading platform. The United Kingdom High Court shut down the company in September 2022, determining it was operating as a fraudulent investment scheme after collecting approximately £612,425 ($815,000) from investors between July 2020 and February 2021.
“PGI Global never had an ‘Auto Trading’ platform and was conducting little to no trading of any kind on investors’ behalf,” the court filing states. Instead, the SEC alleges that investor funds maintained a Ponzi-like payment system while financing Palafox’s lavish lifestyle, including a $1.7 million Las Vegas residence, multiple Lamborghini vehicles, and $1.18 million in Cartier jewelry.
ONGOING LEGAL ACTIONS
“His false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud,” said Laura D’Allaird, chief of the SEC’s Cyber Unit, in the official statement.
The complaint identifies four additional relief defendants, including Palafox’s wife, mother, and brother-in-law, seeking recovery of assets they received, such as a $320,000 mortgage payoff, a Range Rover, and luxury items from high-end brands. The SEC is pursuing permanent restrictions against Palafox’s involvement in cryptocurrency or multi-level marketing securities offerings, along with civil penalties and complete disgorgement of misappropriated funds.
U.S. federal prosecutors have filed related criminal charges against Palafox in Virginia. The case investigation revealed that Palafox had allegedly created fake crypto transactions and manipulated dashboard displays to falsely demonstrate returns and maintain investor participation. When the promised returns failed to materialize, investors were unable to withdraw their funds.
After failing to cooperate with investigators, Palafox’s company website was seized by the U.S. Department of Justice and the U.S. Department of the Treasury following a warrant issued by the Eastern District of Virginia.
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