TLDR
- Praetorian Group CEO pleads guilty to wire fraud and money laundering in a $200M Ponzi scheme.
- Over 90,000 investors were defrauded, suffering losses of at least $62M.
- Palafox used funds for luxury cars, homes, and designer goods, totaling millions.
- He faces up to 40 years in prison and agreed to pay $62.7 million in restitution.
Ramil Ventura Palafox, the CEO of Praetorian Group International (PGI), pled guilty to wire fraud and money laundering charges related to a $200 million bitcoin Ponzi scheme. The scheme defrauded over 90,000 investors globally, who were promised returns of 0.5% to 3% daily from bitcoin trading activities that never occurred.
Palafox, a dual citizen of the United States and the Philippines, ran PGI as its chairman and CEO, falsely claiming the company was involved in high-volume bitcoin trading. In reality, PGI was not generating the returns it promised. Instead, Palafox was using funds from new investors to pay returns to earlier investors. This Ponzi structure eventually led to significant financial losses for many individuals.
Scale of the Fraud and Investor Losses
Between December 2019 and October 2021, PGI raised more than $201 million from investors, including over $30 million in fiat currency and more than 8,000 bitcoin, valued at over $171 million at the time.
Despite the significant influx of funds, Palafox’s actions resulted in losses totaling at least $62.7 million for investors.
Court documents revealed that the PGI website had falsely displayed the investments as profitable, misleading victims into believing their money was secure. In addition to the fraudulent investment platform, Palafox’s lavish lifestyle raised questions about his use of the funds. He spent millions on luxury cars, homes, and personal goods, reinforcing the deceptive nature of the operation.
Palafox’s Lavish Spending Using Investor Funds
The U.S. Attorney’s office detailed how Palafox spent large amounts of the invested funds on personal luxuries, further promoting the fraudulent scheme. He bought 20 high-end cars, including brands like Porsche, Ferrari, and Lamborghini, spending about $3 million on these vehicles alone.
Palafox also used investor funds to purchase multiple luxury homes in Las Vegas and Los Angeles, totaling over $6 million, and spent approximately $329,000 on hotel penthouses. Additionally, he splurged around $3 million on designer clothes, watches, jewelry, and other high-end goods from brands like Gucci, Rolex, and Hermes. He even transferred approximately $800,000 in fiat currency and 100 bitcoin, worth $3.3 million, to a family member.
Legal Consequences and Restitution Agreement
Palafox’s guilty plea has led to his facing up to 40 years in prison, with his sentencing scheduled for February 3, 2026. However, under the plea agreement, he has also agreed to pay restitution of approximately $62.7 million to the victims of his fraudulent scheme. While federal sentencing guidelines typically result in sentences lower than the maximum, the court will consider various factors before determining his final sentence.
The case serves as a reminder of the risks associated with unregulated cryptocurrency investments, especially those promising high returns without transparency. The authorities have made it clear that fraud involving digital currencies will be met with serious legal consequences. The U.S. Department of Justice continues to investigate fraudulent schemes in the cryptocurrency space, signaling their commitment to holding those responsible accountable.
