The US Securities and Exchange Commission (SEC) has charged Ramil Palafox, a dual US-Philippine national, with orchestrating a $198 million crypto scam.
From January 2020 to October 2021, Palafox ran a Ponzi-style scheme through his company, PGI Global, defrauding many investors.
SEC Cracks Down on Massive Crypto Scam
According to the press release, the regulator claims that Palafox raised about $198 million from investors globally. He promised them substantial returns from crypto and foreign exchange trading.
Nonetheless, the SEC alleges that Palafox misused over $57 million of the funds for personal purchases.
“As alleged in our complaint, Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading, but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds,” Associate Director of the SEC’s Philadelphia Regional Office Scott Thompson stated.
Furthermore, the company operated with a multi-level marketing (MLM) structure. Palafox attracted investors by claiming expertise in the crypto sector and offering an artificial intelligence (AI)-driven trading platform. Yet, both of these claims proved to be fraudulent.
The scheme eventually collapsed in 2021, resulting in significant financial losses for investors.
“The SEC’s complaint, filed in the US District Court for the Eastern District of Virginia, charges Palafox with violating the anti-fraud and registration provisions of the federal securities laws,” the press release detailed.
The SEC demands that Palafox return ill-gotten gains and pay civil penalties. The regulator has also asked for a permanent injunction to prevent Palafox from engaging in similar activities in the future. Additionally, the US Attorney’s Office has filed criminal charges.
Iranian National Charged for Running Dark Web Marketplace
Meanwhile, in a separate case, a federal jury indicted Iranian national Behrouz Parsarad for founding and operating a dark web marketplace. According to the US Office of Public Affairs, the Nemesis market facilitated the illegal sale of drugs, including fentanyl and other controlled substances. The marketplace was also involved in criminal activities like stealing financial data and distributing malware.
Between 2021 and 2024, Nemesis processed over 400,000 orders. In addition to drug trafficking, Parsarad is also charged with money laundering for using crypto to conceal the proceeds of illegal activities.
“Nemesis users were not allowed to conduct transactions in official, government-backed currencies,” the press release read.
The accused now faces a mandatory minimum sentence of 10 years in federal prison, with a maximum penalty of life if convicted.
Previously, BeInCrypto highlighted that the FBI arrested Anurag Pramod Murarka for laundering over $24 million using the dark web. The cases highlight the US government’s intensified focus on regulating the cryptocurrency sector and combating cybercrime.
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