As Paul Atkins took to the office as Chairman of the US Securities Exchange Commission on Tuesday, the very first target of the agency turned out to be Ramil Palafox, founder of PGI Global.
Palafox is accused of orchestrating a fraudulent investment scheme which victimized worldwide investors for $198 million while misappropriating $57 million of their capital, according to the Securities and Exchange Commission.
The SEC complaint states that Palafox established PGI Global as an organization which pretended to operate as a crypto asset and foreign exchange trading company.
Palafox operated PGI Global as a fraud scheme from January 2020 until October 2021 through which he promised investors substantial earnings from his nonexistent crypto exchange trading and obtained new investors by offering them commission-based referral bonuses.
The complaint shows Palafox spent more than $57 million of investor money on luxury items including Lamborghinis and retail goods for personal use together with miscellaneous personal expenditures.
PGI Global spent most of its investor capital on payments to different investors through false return schemes along with referral bonus rewards before its downfall at the end of 2021.
Reports filed by the SEC at District Court for the Eastern District of Virginia state that Palafox violated sections under federal securities laws regarding fraud and registered securities.
The court action requests multiple permanent injunctions on Palafox which would prohibit him from taking part in multilevel marketing schemes and from selling securities and crypto assets as well as demands for ill-gained funds including prejudgment interest and civil fines.
The complaint demands the return of stolen funds together with judicial interest payments to BBMR Threshold LLC and its executives Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura through relief defendant claims.
Associate Director of the SEC’s Philadelphia Regional Office Scott Thompson stated, “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,”.
While Laura D’Allaird, Chief of the Commission’s new Cyber and Emerging Technologies Unit stated, “Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed,” said “In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”
Mike Cuff and Polly Hayes from the Philadelphia Regional Office together with Assunta Vivolo from the SEC’s Market Abuse Unit lead the continuing SEC probe. Mr. Hompson together with Ms. D’Allaird serves as supervising personnel of this investigation.
The Philadelphia Regional Office along with Headquarters and the Eastern District of Virginia will handle the litigation under Spencer Willig, Gregory Bockin and Eugene Hansen. The Commission expresses gratitude to the U.S. Attorney’s Office together with the FBI and IRS.
This kind of incident emphasizes the increasing need for the attention to detail in the cryptocurrency arena, where unethical founders continue to defraud unwary digital asset investors.
Also Read: What to Expect from Paul Atkins as the New SEC Chair?
