PGI crypto Ponzi scheme CEO pleads guilty to fraud amounting to $200 million

Key points:

• 60-year-old Ramil Palafox admitted to creating the PGI Ponzi scheme, which promised returns of up to 3% per day.
• From December 2019 to October 2021, $201 million and more than 8100 BTC were invested in the project, with damages amounting to $62,7 million.
• Palafox spent millions on houses, luxury cars, and brands, and now faces up to 40 years in prison.

Praetorian Group International (PGI) CEO Ramil Ventura Palafox has pleaded guilty to wire fraud and money laundering. The trial is taking place in the Eastern District of Virginia.

According to the prosecution, from December 2019 to October 2021, more than 90 000 investors worldwide invested over $201 million in PGI, including $30,3 million in fiat and more than 8100 BTC worth approximately $171 million. The scheme promised daily returns of 0,5% to 3%, but was in fact a classic Ponzi scheme.

Instead of trading bitcoins, Palafox paid returns from the funds of new investors. To maintain confidence, he displayed fictitious profits and fake balances on the PGI online portal.

Millions on cars and houses

Cktlcndbt found that Palafox spent millions on personal stuff. He bought about 20 luxury cars for $3 million, including Ferraris, Lamborghinis, and Bentleys. He spent more than $6 million on four homes in Las Vegas and Los Angeles, and hundreds of thousands more on penthouses in expensive hotels.

His expenses include Rolex, Cartier, Gucci, Hermes, and other brands. He transferred some of the funds to relatives, including 100 BTC worth $3,3 million.

The total damage from the scheme amounted to at least $62,7 million. Palafox agreed to reimburse this amount to the victims.

“Classic Ponzi scheme”

PGI was a typical pyramid scheme disguised as crypto trading with elements of multi-level marketing. Investors were promised unrealistic returns through so-called “bitcoin arbitrage” and a system of attracting new participants.

Experts compare this model to other well-known crypto Ponzi schemes, such as BitConnect, PlusToken, and OneCoin. The scale of the case is smaller than that of FTX or Mt. Gox, but the scheme itself follows a familiar pattern: new funds were used to pay old investors until the system collapsed.

Palafox’s sentencing is scheduled for February 3, 2026. He faces up to 40 years in prison, but the actual sentence is usually less than the maximum.