In a high-profile crackdown coinciding with the appointment of Paul Atkins as Chairman of the U.S. Securities and Exchange Commission (SEC), the agency has charged Ramil Palafox, founder of PGI Global, with orchestrating a $198 million international crypto fraud. The charges detail a sophisticated scheme involving false promises, multi-level marketing tactics, and extravagant misuse of investor funds.
A Scheme Wrapped in Innovation
From January 2020 to October 2021, PGI Global positioned itself as a cutting-edge crypto and foreign exchange trading company. However, according to the SEC, the company was merely a front. Palafox is accused of deceiving global investors with promises of high returns from non-existent crypto trades, while using referral-based recruitment to keep the illusion alive.
Investors were lured with the illusion of an AI-powered trading platform, but instead of any real trading activity, Palafox allegedly funnelled new investor funds to pay old ones, mimicking a classic Ponzi structure.
Lavish Lifestyle Funded by Fraud
Rather than channelling investments into crypto markets, Palafox is said to have spent over $57 million on a luxurious personal lifestyle. SEC filings describe purchases of Lamborghinis, designer goods, watches, and real estate, all funded by defrauded investors.
PGI Global’s collapse in late 2021 exposed the extent of the deception, leaving a trail of financial devastation for its global investor base.
Legal Firestorm and Asset Recovery
Filed in the Eastern District of Virginia, the SEC’s complaint accuses Palafox of violating multiple federal securities laws, including fraud and the unlawful sale of unregistered securities. The agency is seeking permanent injunctions, banning Palafox from selling crypto assets or engaging in any multi-level marketing ventures.
The SEC is also demanding the return of misappropriated funds, civil penalties, and prejudgment interest. Relief defendant claims have been filed to reclaim funds allegedly transferred to BBMR Threshold LLC and its executives, including Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura.
Regulators Speak Out
Scott Thompson, Associate Director of the SEC’s Philadelphia office, criticised Palafox’s exploitation of crypto hype:
“He bought himself and his family luxury goods using millions of dollars of investor funds instead of trading.”
Laura D’Allaird, head of the Commission’s Cyber and Emerging Technologies Unit, echoed the sentiment:
“Palafox masked international fraud behind claims of crypto expertise and AI innovation.”
Investigators from the Philadelphia Regional Office, Market Abuse Unit, and legal teams from the SEC Headquarters are coordinating efforts with the FBI, IRS, and U.S. Attorney’s Office to ensure accountability.
