The Securities and Exchange Commission (SEC) has filed charges against Ramil Palafox for allegedly defrauding investors worldwide of approximately $198 million through his company PGI Global, while personally misappropriating more than $57 million of those funds.

SEC Charges Founder of PGI Global in $198 Million Forex and Crypto Fraud Case

The SEC's complaint, filed in the U.S. District Court for the Eastern District of Virginia, alleges that from January 2020 through October 2021, Palafox marketed PGI Global as a legitimate crypto asset and foreign exchange trading company that offered guaranteed high returns to investors who purchased "membership" packages.

According to regulatory officials, Palafox's operation collapsed in late 2021 after functioning as a Ponzi-like scheme where new investor funds were used to pay supposed returns to earlier investors.

"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," said Scott Thompson, Associate Director of the SEC's Philadelphia Regional Office.

As the agency emphasizes, consumer losses from investment frauds continue to rise in the United States, with another increase of over 20% last year, reaching nearly $4 billion.

Lamborghinis and Luxuries

The complaint details how Palafox allegedly spent investor money on Lamborghinis, luxury retail items, and other personal expenses rather than legitimate trading activities. The SEC alleges he leveraged multi-level marketing tactics to incentivize existing members to recruit new investors, expanding the scheme's reach.

Laura D'Allaird, Chief of the SEC's Cyber and Emerging Technologies Unit, noted that Palafox "used the guise of innovation" while making false claims about crypto expertise and an AI-powered auto-trading platform to mask what was fundamentally "an international securities fraud."

The SEC is seeking permanent injunctions, conduct-based restrictions preventing Palafox from participating in similar ventures, disgorgement of ill-gotten gains with interest, and civil penalties. Additionally, BBMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura have been named as relief defendants from whom the SEC seeks recovery of allegedly ill-gotten gains.

In a parallel action, the U.S. Attorney's Office for the Eastern District of Virginia has brought criminal charges against Palafox, who has already been arraigned in U.S. District Court.

Atkins, Uyeda and Buyout Program

There’s been a lot happening internally at the SEC lately. The agency underwent a sweeping transformation under interim Chairman Mark Uyeda, who used his brief tenure to implement a number of pro-crypto changes.

Now, Paul Atkins has been officially appointed as SEC Chairman, nominated by Donald Trump. For the cryptocurrency industry, Atkins is seen as another favorable figure following several years under Gary Gensler, who was generally viewed as skeptical of digital assets.

Meanwhile, the background is marked by a budget-tightening initiative proposed by the new presidential administration, aimed at reducing spending on federal agencies. As part of the current buyout program, the SEC could lose around 10% of its workforce, as approximately 500 employees have already accepted a $50,000 offer to voluntarily resign.