Key Takeaways
- The scheme, which operated under the company PGI Global, is alleged to have raised approximately $200 million from tens of thousands of investors before collapsing.
- The scheme was structured around a referral-based model, encouraging users to bring in new investors in exchange for bonuses.
U.S. authorities have filed civil charges against Ramil Palafox, accusing him of masterminding a massive investment scam that promised consistent profits through digital currency and foreign exchange trading. The scheme, which operated under the company PGI Global, is alleged to have raised approximately $200 million from tens of thousands of investors before collapsing.
The Securities and Exchange Commission (SEC), in its complaint filed in the Eastern District of Virginia, claims that Palafox misled more than 90,000 individuals between January 2020 and October 2021.
He reportedly lured investors with promises of daily earnings generated by an artificial intelligence-based trading system. However, the SEC contends that no such technology existed, and the operation bore the hallmarks of a traditional Ponzi scheme.
Instead of trading, the funds collected were allegedly funneled into personal expenses. Authorities say Palafox diverted over $57 million for personal use, purchasing luxury cars, real estate, and other high-end items.
His promotional materials described PGI Global as a technologically advanced platform with AI-driven tools capable of high-yield returns. These claims, according to regulators, were fabricated to attract unwitting participants.
The scheme was structured around a referral-based model, encouraging users to bring in new investors in exchange for bonuses. This multi-level marketing component, combined with false assurances of guaranteed profits, created what the SEC describes as a deceptive and unsustainable financial setup.
Laura D’Allaird, who leads the SEC’s Cyber and Emerging Technologies Unit, commented on the nature of the scam: “Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed.” She added that the representations of advanced crypto trading strategies were nothing more than a front.
Supporting the SEC’s position, Scott Thompson, Associate Director at the agency’s Philadelphia office, stated, “Palafox attracted investors with the allure of guaranteed profits… but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds.”
Beyond the civil charges, Palafox also faces a separate criminal case brought by federal prosecutors in Virginia. If convicted, he could face severe penalties, including restitution and imprisonment. The SEC is seeking permanent injunctions, monetary penalties, and repayment of funds. No trial date has been set at the time of publication.
