Praetorian Group CEO Sentenced to 20 Years for $200M Bitcoin Ponzi Scheme

TLDR:

• Praetorian Group CEO Ramil Palafox received 20-year sentence for operating $200M Bitcoin Ponzi scheme from 2019 to 2021. 
• Over 90,000 investors worldwide lost at least $62.7M in the fraudulent cryptocurrency operation. 
• Palafox promised daily returns of 0.5% to 3% but paid investors with their own or others’ money. 
• CEO spent millions on 20 luxury cars, four homes, and designer goods from Rolex, Gucci, Ferrari.
  

Ramil Ventura Palafox, CEO of Praetorian Group International, received a 20-year prison sentence for orchestrating a Bitcoin Ponzi scheme that defrauded over 90,000 investors worldwide.

The U.S. Department of Justice announced the sentencing following Palafox’s conviction on wire fraud and money laundering charges.

The scheme collected more than $201 million between December 2019 and October 2021. Investors lost at least $62.7 million through the fraudulent operation.

Fraudulent Bitcoin Trading Operation

Palafox operated Praetorian Group International as a multi-level marketing and Bitcoin trading firm. The 61-year-old dual citizen of the United States and Philippines made false claims about the company’s trading activities.

He promised investors daily returns ranging from 0.5 to 3 percent on their Bitcoin investments. However, the company was not trading Bitcoin at a scale capable of generating such returns.

The scheme followed a classic Ponzi structure where early investors received payments from new investor funds. Palafox used incoming investments to pay returns to existing participants rather than generating profits through legitimate trading.

This model created an illusion of profitability while the operation remained fundamentally unsustainable. The company attracted global participation through aggressive marketing and promises of consistent returns.

During the operation’s peak, investors deposited more than $30 million in fiat currency into the scheme. Additionally, participants transferred at least 8,198 Bitcoin worth approximately $171.5 million at the time.

The company maintained a website portal where investors could monitor their supposed investment performance. This online platform consistently displayed fraudulent data showing account growth and positive returns.

Between 2020 and 2021, Palafox deliberately misrepresented investment performance through the portal. The fake data convinced victims their investments remained secure and profitable.

This deception prevented early detection and allowed the scheme to continue expanding. Many investors reinvested their purported gains based on the false information displayed on the platform.

Lavish Spending and Asset Seizures

Palafox diverted investor funds for personal luxury purchases and promotional expenses. He spent approximately $3 million acquiring 20 high-end vehicles from manufacturers including Porsche, Lamborghini, McLaren, and Ferrari.

The collection also featured automobiles from BMW, Bentley, and other premium brands. These purchases served both personal enjoyment and created an image of success to attract new investors.

Real estate acquisitions formed another major category of expenditure. Palafox purchased four homes across Las Vegas and Los Angeles with a combined value exceeding $6 million.

He also spent around $329,000 on penthouse suites at luxury hotel chains. These properties provided venues for meetings and demonstrations of wealth to potential investors.

Luxury goods purchases totaled an additional $3 million from high-end retailers. Palafox bought clothing, watches, jewelry, and home furnishings from brands like Louboutin, Gucci, Versace, and Cartier.

His shopping list included items from Ferragamo, Valentino, Rolex, and Hermes stores. He transferred at least $800,000 in cash to a family member along with 100 Bitcoin valued at approximately $3.3 million.

The FBI Washington Field Office and IRS Criminal Investigation collaborated on the investigation. Assistant U.S. Attorneys Jack Morgan and Annie Zanobini prosecuted the case alongside former Assistant U.S. Attorney Zoe Bedell.

The U.S. Attorney’s Office for the Eastern District of Virginia confirmed that victims may qualify for restitution payments. Affected investors can submit claims through the official channels established by the court.

The post Praetorian Group CEO Sentenced to 20 Years for $200M Bitcoin Ponzi Scheme appeared first on Blockonomi.