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Rather than investing in bitcoin and foreign exchange trading as he had promised, Palafox utilized funds from new investors to pay earlier ones and diverted millions for his personal expenses.
(Tingey Injury Law Firm/Unsplash/Modified by CoinDesk)
Key points:
- Ramil Ventura Palafox, the founder of Praetorian Group International, conducted a Ponzi scheme that deceived over 90,000 investors and extracted more than $62.7 million.
- Rather than investing in bitcoin and forex trading as he had claimed, Palafox misappropriated funds from new investors to reimburse earlier ones and diverted millions for his own benefit.
- Palafox expended millions on luxury vehicles, residences, and designer goods, while creating fictitious investment returns on an online platform.
The chief executive of Praetorian Group International (PGI) received a 20-year prison sentence in the U.S. for orchestrating a worldwide Ponzi scheme that falsely asserted investments in bitcoin and foreign exchange trading.
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Ramil Ventura Palafox, 61, promised daily returns of as much as 3%, misleading over 90,000 investors and depleting more than $62.7 million in funds, according to a statement released on Thursday by the U.S. Attorney’s Office for the Eastern District of Virginia.
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PGI amassed over $201 million from investors between late 2019 and 2021, including more than 8,000 bitcoin , as noted in court documents. Instead of investing the capital, prosecutors stated that Palafox utilized funds from new investors to settle payments to older ones while misappropriating millions for himself.
To maintain the facade, Palafox created an online portal where investors could monitor their alleged earnings, featuring figures that were entirely fictitious.
In truth, Palafox was purchasing Lamborghinis, opulent properties in Las Vegas and Los Angeles, and penthouse suites at luxury hotels. Prosecutors assert he spent $3 million on high-end vehicles and another $3 million on designer apparel, watches, and jewelry.
The FBI and IRS conducted the investigation. Victims might qualify for restitution. The SEC is seeking civil penalties, and Palafox is currently prohibited from managing securities.
