In a significant development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Ramil Ventura Palafox, the CEO and founder of PGI Global, for allegedly masterminding a massive Ponzi scheme that defrauded investors of $198 million. The legal action, filed on April 22, 2025, in the U.S. District Court for the Eastern District of Virginia, accuses Palafox of operating a fraudulent investment operation that falsely promised high returns in cryptocurrency and forex markets, ultimately causing substantial financial losses for participants.

The Ponzi Scheme

From January 2020 to October 2021, PGI Global marketed “membership packages” to investors, claiming that its AI-driven trading platform could generate returns of up to 200% in crypto and forex markets. The company also used a multi-level marketing (MLM) strategy to recruit new investors, further inflating the scope of the fraud.

However, the SEC’s investigation revealed that PGI Global never executed any real trades. Instead, Palafox allegedly used new investors’ money to pay returns and commissions to earlier investors, creating the illusion of profitability. This classic Ponzi scheme continued until late 2021 when it collapsed, leaving investors with severe financial losses.

Fraudulent Use of Investor Funds

The SEC claims that Palafox siphoned off more than $57 million from PGI Global’s investment pool for personal use. Among his expenditures were the purchase of a $1.7 million property in Las Vegas, expensive cars, luxury jewelry, and designer items. Additionally, the SEC alleges that Palafox transferred assets to his family members through the company BBMR Threshold LLC, including:

• Paying a $320,000 mortgage for his brother-in-law.

• Spending $169,000 to settle debts and gifting a Range Rover to his mother.

• Purchasing $1.18 million worth of jewelry and luxury goods for his wife.

These funds were allegedly diverted from the investors who trusted PGI Global with their money.

Legal Consequences and SEC’s Demands

In response to these fraudulent actions, the SEC has called for a permanent ban on Palafox from participating in any activities related to securities or cryptocurrencies. The commission is also seeking full restitution of the stolen funds and civil penalties. Furthermore, the U.S. Department of Justice has filed criminal charges against Palafox for wire fraud, money laundering, and illegal money transmission. If convicted, Palafox faces significant jail time and the possible seizure of his assets.

Broader Legal and Industry Implications

The case against Palafox and PGI Global is part of a broader effort to clean up the cryptocurrency market and protect investors from fraudulent schemes. In September 2022, PGI Global UK Ltd was dissolved by the UK’s High Court for similar fraudulent activities, further cementing the company’s role in the global crypto scam. In addition, the U.S. Department of Justice and the IRS had already seized PGI Global’s website in October 2021, signaling the government’s ongoing effort to shut down operations that defraud investors.

This lawsuit marks a key milestone in the SEC’s ongoing work under the leadership of Chairman Paul Atkins. It is the first major crypto-related enforcement action under his tenure, signaling the SEC’s commitment to addressing fraudulent practices in the rapidly expanding cryptocurrency market.