Crypto Ponzi Scheme Mastermind Gets 20 Years in Prison

The CEO of a multi-level marketing bitcoin trading firm has been sentenced to 20 years in federal prison for orchestrating a massive Ponzi scheme. Ramil Ventura Palafox defrauded over 90,000 investors worldwide of more than $201 million through his company, Praetorian Group International.

The U.S. DOJ said Praetorian Group International CEO Ramil Ventura Palafox was sentenced to 20 years in prison for running a $200 million Bitcoin Ponzi scheme that defrauded over 90,000 investors. Authorities said victims lost at least $62.7 million, while Palafox used funds for…

— Wu Blockchain (@WuBlockchain) February 13, 2026

Palafox, 61, holds dual citizenship in the United States and the Philippines. He owned and operated PGI while serving as its Chairman, CEO, and chief promoter. The scheme ran from December 2019 through October 2021, devastating investors across the globe.

Court documents reveal Palafox promised investors daily returns between 0.5% and 3% from purported bitcoin trading activities. The company was never trading cryptocurrency at a scale capable of generating such returns. Instead, Palafox paid investors using their own money or funds from newer victims.

Investors poured at least $30.2 million in fiat currency and 8,198 bitcoin worth $171.5 million into the scheme. Total losses amounted to at least $62.7 million when the operation collapsed.

Ponzi Scheme Profits Fund Lavish Lifestyle

Palafox used investor funds to finance an extravagant lifestyle while promoting the fraudulent scheme. He purchased approximately 20 luxury vehicles worth $3 million from brands including Porsche, Lamborghini, McLaren, Ferrari, BMW, and Bentley.

The convicted fraudster spent roughly $329,000 on penthouse suites at luxury hotel chains. He also acquired four homes in Las Vegas and Los Angeles valued at more than $6 million combined.

Meanwhile, Palafox spent another $3 million on clothing, watches, jewelry, and home furnishings. His shopping sprees included purchases from Louboutin, Neiman Marcus, Gucci, Versace, Ferragamo, Valentino, Cartier, Rolex, and Hermes.

He transferred at least $800,000 in fiat currency to a family member. An additional 100 bitcoin, then valued at approximately $3.3 million, was also sent to the same relative.

SEC and Federal Prosecutors Join Forces

The U.S. Securities and Exchange Commission filed separate charges against Palafox in April 2025. Federal prosecutors coordinated their efforts with the regulatory agency to pursue the case.

According to the SEC, Palafox lured investors through false claims of crypto industry expertise. He also promoted a supposed AI-powered auto-trading platform that did not function as advertised.

The regulator alleged Palafox hosted lavish recruitment events in Dubai and Las Vegas. New members received referral bonuses for bringing in additional investors, fueling the scheme’s rapid expansion.

Palafox created a website where investors could monitor their purported investment performance. From 2020 through 2021, the online portal consistently displayed fraudulent gains, misleading victims into believing their investments were profitable.

Scott Thompson, associate director of the SEC’s Philadelphia office, commented on the case. He stated that Palafox attracted investors with promises of guaranteed profits from sophisticated crypto and forex trading.

Following the conviction, the SEC is seeking a permanent injunction against Palafox. The regulator wants to ban him from future sales of securities and crypto assets.

The agency also demands repayment of ill-gotten gains and civil penalties. These measures aim to provide some restitution to the thousands of defrauded investors.

Palafox was convicted on wire fraud and money laundering charges before receiving his 20-year sentence. The case stands as one of the largest crypto-related Ponzi scheme prosecutions in recent years.

The conviction sends a clear message to those operating fraudulent cryptocurrency schemes. Federal authorities and regulators continue to coordinate efforts against crypto-related fraud.