By PAUL O’DONOGHUE, Senior Correspondent
THE U.S. Securities and Exchange Commission (SEC) has charged Ramil Palafox, founder of PGI Global, with orchestrating a $198 million fraud scheme.
According to the SEC, Palafox misappropriated over $57 million of those funds for personal use.
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Virginia, alleges that between January 2020 and October 2021, Palafox promoted PGI Global as a crypto and foreign exchange trading company offering high, guaranteed returns through paid “membership” packages.
But regulators say the operation was a Ponzi-like scheme, using money from new investors to pay earlier ones. The scheme collapsed in late 2021.
“Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading,” said Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office. “But instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds.”
PGI Global accusations
The SEC said Palafox spent investor money on Lamborghinis, luxury retail goods, and other personal expenses. He also used multi-level marketing strategies to encourage members to recruit new investors, helping expand the scheme.
“Palafox used the guise of innovation,” said Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit. She said he made false claims about crypto trading expertise and an AI-powered auto-trading platform to conceal “an international securities fraud.”
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Virginia, charges Palafox with violating the anti-fraud and registration provisions of the federal securities laws.
The SEC is seeking permanent injunctions to prevent Palafox from launching similar ventures. It is also pursuing the return of allegedly misappropriated money, interest, and civil penalties.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Virginia has filed criminal charges. Palafox has been arraigned in U.S. District Court.
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