The
Securities and Exchange Commission (SEC) has filed charges
against Ramil Palafox for allegedly defrauding investors worldwide of
approximately $198 million through his company, PGI Global, while personally
misappropriating more than $57 million of those funds.
SEC Charges Founder of PGI
Global in $198 Million Forex and Crypto Fraud Case
The SEC’s
complaint, filed in the U.S. District Court for the Eastern District of
Virginia, alleges that from January 2020 through October 2021, Palafox marketed
PGI Global as a legitimate crypto asset and foreign exchange trading company
that offered guaranteed high returns to investors who purchased
“membership” packages.
According
to regulatory officials, Palafox’s operation collapsed in late 2021 after
functioning as a Ponzi-like scheme where new investor funds were used to pay
supposed returns to earlier investors.
“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,” said Scott Thompson, Associate Director of the
SEC’s Philadelphia Regional Office.
As the
agency emphasizes, consumer losses from investment frauds continue to rise in
the United States, with another increase of over 20% last year, reaching nearly
$4 billion.
Lamborghinis and Luxuries
The
complaint details how Palafox allegedly spent investor money on Lamborghinis,
luxury retail items, and other personal expenses rather than legitimate trading
activities. The SEC alleges he leveraged multi-level marketing tactics to
incentivize existing members to recruit new investors, expanding the scheme’s
reach.
Laura
D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit, noted that
Palafox “used the guise of innovation” while making false claims
about crypto expertise and an AI-powered auto-trading platform to mask what was
fundamentally “an international securities fraud.”
The SEC is
seeking permanent injunctions, conduct-based restrictions preventing Palafox
from participating in similar ventures, disgorgement of ill-gotten gains with
interest, and civil penalties. Additionally, BBMR Threshold LLC, Darvie
Mendoza, Marissa Mendoza Palafox, and Linda Ventura have been named as relief
defendants from whom the SEC seeks recovery of allegedly ill-gotten gains.
In a
parallel action, the U.S. Attorney’s Office for the Eastern District of
Virginia has brought criminal charges against Palafox, who has already been
arraigned in U.S. District Court.
Atkins, Uyeda, and Buyout
Program
There’s
been a lot happening internally at the SEC lately. The agency underwent a
sweeping transformation under interim Chairman Mark Uyeda, who used his brief
tenure to implement a number of pro-crypto changes.
Now, Paul
Atkins has been officially appointed as the SEC Chairman, nominated by Donald
Trump. For the cryptocurrency industry, Atkins is seen as another favorable
figure following several years under Gary Gensler, who was generally viewed as
skeptical of digital assets.
Meanwhile,
the background is marked by a budget-tightening initiative proposed by the new
presidential administration, aimed at reducing spending on federal agencies. As
part of the current buyout program, the SEC could lose around 10% of its
workforce, as approximately 500 employees have already accepted a $50,000 offer
to voluntarily resign.
This article was written by Damian Chmiel at www.financemagnates.com.
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