What to Know
- Praetorian Group CEO Ramil Ventura Palafox was sentenced to 20 years in prison for running a $200M Bitcoin fraud scheme.
- Over 90,000 investors were affected, with confirmed losses of at least $62.7 million.
- Authorities said investor funds were spent on luxury cars, homes, hotels, and designer goods instead of real trading.
The CEO of Praetorian Group International (PGI), Ramil Ventura Palafox, has been sentenced to 20 years in prison for running a large Bitcoin fraud scheme that affected tens of thousands of investors around the world. The U.S. Department of Justice announced that the case involved more than $200 million in investor funds and caused losses of at least $62.7 million. The sentencing took place in federal court in Virginia. Prosecutors said the punishment reflects the scale of the fraud and the damage caused to victims.
How the Scheme Worked
According to court documents, Palafox ran PGI as a Bitcoin trading and multi-level marketing company between December 2019 and October 2021. He told people that the company was making money through large-scale Bitcoin trading and promised daily returns between 0.5% and 3%. Authorities said those promises were false.
Investigators found that PGI was not doing enough real trading to generate the kind of profits it claimed. Instead, money coming in from new investors was used to pay earlier investors. This created the false impression that the business was successful and profitable. This type of setup is commonly known as a Ponzi scheme, where payouts depend on new deposits rather than real earnings.
Over 90,000 Investors Affected
The Justice Department said more than 90,000 investors worldwide put money into PGI. In total, they invested over $201 million. This included about $30 million in regular currency and more than 8,000 Bitcoin, which at the time was worth over $170 million.
To keep investors confident, Palafox created an online dashboard that showed steady gains. The website displayed fake performance numbers and account growth. Victims were led to believe their investments were safe and growing every day. In reality, the numbers were not true. When the flow of new investor money slowed down, the scheme could no longer support payouts.
Investor Money Spent on Luxury Lifestyle
Prosecutors said Palafox used a large share of investor funds for personal spending instead of business activity. Court records show he spent around $3 million on 20 luxury cars. These included brands like Porsche, Lamborghini, Ferrari, Bentley, BMW, and McLaren. He also spent about $329,000 on penthouse suites at luxury hotels.
In addition, he bought four homes in Las Vegas and Los Angeles worth more than $6 million combined. Authorities said another $3 million went toward designer clothes, watches, jewelry, and home items from high-end stores and brands. He also transferred at least $800,000 in cash and 100 Bitcoin worth about $3.3 million at the time to a family member.
Charges and Investigation
Palafox pleaded guilty to wire fraud and money laundering charges. These charges relate to using communication systems and financial channels to carry out illegal money activities. The case was investigated by the FBI Washington Field Office and the IRS Criminal Investigation unit in Washington, D.C. Federal prosecutors said the evidence included financial records, website data, and fund transfer trails. Officials said the investigation showed clear signs that investor money was being misused and that business claims were knowingly false.
The court said victims may be eligible for restitution, which means partial repayment of their losses. Palafox has agreed to repay about $62.7 million, though officials have not said how much can realistically be recovered. Authorities are continuing efforts to trace and seize remaining assets connected to the case.
Final Thoughts
Officials said the case is a reminder that promises of guaranteed daily returns should be treated with caution. High and steady profit claims are often a red flag. Regulators and law enforcement agencies continue to warn investors to research companies carefully and avoid offers that sound too good to be true.
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