TLDR:
- PGI collected over $201M through Bitcoin and cash between 2019 and 2021 before collapsing.
- Victims are set to receive $62.7M in restitution, though most losses may never be recovered.
- Palafox spent millions on luxury cars, homes, and jewelry using investor funds.
- The DOJ secured a guilty plea that could lead to decades in prison for the PGI CEO.
Ramil Ventura Palafox has admitted to running one of the largest Bitcoin Ponzi schemes in recent years. Prosecutors said the CEO of Praetorian Group International took over $200 million from investors worldwide.
He promised guaranteed daily returns that never existed. Instead, funds went toward personal luxuries and recruitment payouts. His guilty plea marks the end of a case that left thousands of victims with heavy losses.
How the PGI Bitcoin Ponzi Scheme Worked
Prosecutors explained that PGI promoted itself as a crypto trading platform with “AI arbitrage” systems. Investors were told they could earn between 0.5% and 3% daily returns. Court documents showed there was no trading program behind the promise.
PGI’s website displayed fake account balances to keep investors convinced their funds were growing. Between December 2019 and October 2021, the company raised $30.3 million in cash and over 8,000 Bitcoin, worth $171.5 million at the time.
Recruitment was driven by a multi-level marketing setup. Members were encouraged to bring in others, which fueled the scheme’s growth. By late 2021, PGI collapsed and its website was seized after UK regulators shut its operations.
Lavish Spending and Court Orders
Investigators revealed Palafox used investor money to buy over 20 luxury cars including Lamborghinis, Ferraris, and McLarens. He also purchased four homes in Las Vegas and Los Angeles worth more than $6 million.
Records showed spending of $329,000 on penthouse stays and millions more on high-end watches and jewelry. Around $800,000 in cash and 100 Bitcoin were transferred to a family member.
The U.S. SEC charged Palafox earlier this year. The Justice Department’s case resulted in his guilty plea in Virginia. He agreed to repay $62.7 million in restitution.
Sentencing is scheduled for February 3 before Judge Leonie M. Brinkema. While the charges carry up to 40 years in prison, federal guidelines will likely result in a lower term.
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