SEC Charges Crypto Promoter in $198 Million Fraud Scheme
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (“SEC”) has charged Ramil Palafox for orchestrating a massive securities fraud scheme through his now-defunct company, PGI Global (Praetorian Group International Corporation). According to the SEC’s complaint, Palafox raised approximately $198 million from investors around the world and misappropriated over $57 million for personal use.
AltsWire reports that, between January 2020 and October 2021, Palafox marketed and sold “membership” packages in PGI Global, which he claimed would generate high returns through crypto asset and foreign exchange trading. Investors were promised referral incentives in a multilevel-marketing-style operation designed to draw in new participants.
The SEC alleges Palafox and his promoters made numerous material misrepresentations. They falsely claimed Palafox held crypto industry expertise, maintained a team of traders, and operated an artificial intelligence-driven auto-trading platform.
Instead of trading, Palafox allegedly used investor funds to purchase luxury vehicles, designer goods, and personal items. The bulk of the remaining funds were used to pay earlier investors in a Ponzi-like arrangement, which unraveled by late 2021.
AltsWire reports that PGI Global never filed a registration statement for its membership package offerings, violating the registration provisions of federal securities laws. The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Virginia, charges Palafox with violating anti-fraud and registration provisions and seeks permanent injunctive relief, conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties.
The SEC also named BBMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura as relief defendants, seeking disgorgement of ill-gotten gains transferred to them by Palafox.
In a parallel criminal action, the U.S. Attorney’s Office for the Eastern District of Virginia arraigned Palafox on related charges.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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