The United States Securities and Exchange Commission (SEC) charged Ramil Palafox and his company PGI Global on Tuesday for allegedly running a massive fraud scheme that saw investors defrauded of $198 million.
PGI Global, Ramil Palafox Face SEC
According to an April 22 press release from the federal regulator, PGI Global sold “membership” packages that promised “guaranteed high returns” from crypto and foreign exchange trading.
The company even offered “multi-level-marketing-like referral incentives” to customers in a bid to “encourage them to recruit new investors.”
In reality, Palafox allegedly misappropriated $57 million worth of investor funds to make high-end personal purchases, including a Lamborghini and other luxury goods.
Palafox then used the remaining investor funds to “pay other investors on their purported returns and referral rewards in a Ponzi-like scheme” until PGI Global ultimately collapsed in late 2021.
“Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed,” said Laura D’Allaird, Chief of the Commission’s new Cyber and Emerging Technologies Unit.
“In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud,” she added.
The SEC’s Investigation Continues
The SEC filed its complaint in the U.S. District Court for the Eastern District of Virginia, accusing Palafox for allegedly violating anti-fraud and registration provisions of federal securities laws.
The SEC’s complaint, which lists BMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura as relief defendants, is seeking injunctions against Palafox which would prevent him from participating in multi-level marketing operations with regard to cryptocurrencies sold as securities.
The SEC is continuing its investigation into the crypto scheme and is receiving support from the U.S. Attorney’s Office, the FBI, and the IRS.
“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,” he continued.
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