A $198 million Crypto fraud operation, masked as AI trading, has been uncovered, revealing a Ponzi scheme fueled by luxury spending and stretched across the globe.
AI Autotrader or Illusion? SEC Uncovers the Truth Behind PGI
On April 22, the U.S. Securities and Exchange Commission (SEC) announced that it had charged Ramil Palafox, founder of PGI Global, for orchestrating a massive fraudulent scheme that collected approximately $198 million from investors worldwide. According to the SEC’s complaint, PGI Global promoted itself as a “crypto asset and foreign exchange trading company.”
The agency alleged that Palafox did not use investor funds for legitimate trading activities but instead diverted more than $57 million for luxury personal purchases, including high-end vehicles and expensive merchandise. It also reported that he used the remaining investor capital to pay false returns and referral rewards under a Ponzi-style scheme that collapsed in 2021. Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office, emphasized the deceptive nature of the operation.
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, which the SEC characterized as multi-level marketing tactics designed to lure additional victims under the pretense of providing consistent returns.
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 SEC detailed:
In its complaint, the regulator sought comprehensive penalties, including permanent injunctive relief, conduct-based injunctions to bar Palafox from engaging in multi-level marketing activities related to securities or crypto asset offerings, disgorgement of illicit gains with prejudgment interest, and the imposition of civil penalties. The U.S. also filed criminal charges.
Attorney’s Office for the Eastern District of Virginia. The SEC has stated that its investigation is still ongoing.
