The U.S. Securities and Exchange Commission (SEC) announced on April 22 that it has charged Ramil Palafox, founder of PGI Global, for executing an extensive fraudulent operation that raised roughly $198 million from investors worldwide. According to the SEC’s complaint, PGI Global “claimed to be a crypto asset and foreign exchange trading company.”

The agency alleges that rather than utilizing investor funds for legitimate trading activity, Palafox redirected more than $57 million toward luxury personal purchases, including high-end vehicles and expensive merchandise. The rest of the investor capital was allegedly used to pay out false returns and referral rewards in a Ponzi-style arrangement that unraveled in 2021. Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office, emphasized the deceptive nature of the scheme:

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.

Between January 2020 and October 2021, PGI Global offered “membership” packages and referral incentives that the SEC described as multi-level-marketing tactics aimed at recruiting additional victims under the illusion of consistent returns.

The Commission described Palafox’s use of tech jargon and digital asset hype as a cover for deeper misconduct. The SEC detailed:

In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.

The regulator’s complaint seeks comprehensive penalties, including “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.” Criminal proceedings have also been initiated by the U.S. Attorney’s Office for the Eastern District of Virginia. The SEC’s investigation remains ongoing.

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