The Securities and Exchange Commission this week charged Ramil Palafox with orchestrating a fraudulent scheme that raised approximately $198 million from investors worldwide and also for misappropriating more than $57 million of investor funds.
According to the SEC’s complaint, Palafox’s company, known as PGI Global, claimed to be a crypto asset and foreign exchange trading company. From January 2020 through October 2021, Palafox offered and sold PGI Global “membership” packages, which he claimed guaranteed investors high returns from PGI Global’s supposed crypto asset and foreign exchange trading and offered members multi-level-marketing-like referral incentives to encourage them to recruit new investors.
However, as the complaint alleges, Palafox misappropriated more than $57 million in investor funds to buy Lamborghinis, items from luxury retailers, and for other personal expenses. He also used the majority of the remaining investor funds to pay other investors their purported returns and referral rewards in a Ponzi-like scheme until its collapse in late 2021.
“As alleged in our complaint, 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. “We will continue to investigate and take action against bad actors who take advantage of investors with promises of guaranteed passive income and other lies and deceit.”
The SEC said Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed. In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.
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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 complaint seeks permanent injunctive relief, conduct-based injunctions preventing Palafox from participating in multi-level-marketing programs involving the offer or sale of securities and offerings of crypto assets bought or sold as a security, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
The complaint also names BBMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura as relief defendants and seeks disgorgement of their ill-gotten gains and prejudgment interest.
In a parallel action, Palafox was arraigned in U.S. District Court on criminal charges brought by the U.S. Attorney’s Office for the Eastern District of Virginia.
