- Trending
- Comments
- Latest
A US federal judge has sentenced Ramil Ventura Palafox, founder of Praetorian Group International, to 20 years in prison for orchestrating a $200 million Bitcoin Ponzi scheme that defrauded more than 90,000 investors worldwide — one of the largest crypto fraud sentences handed down in recent years.
Ramil Ventura Palafox, 61, the former CEO and chairman of Praetorian Group International (PGI), was sentenced Thursday after pleading guilty in September 2025 to wire fraud and money laundering charges tied to the Bitcoin Ponzi scheme that operated between December 2019 and October 2021.
According to court filings and statements from the U.S. Department of Justice, Palafox used PGI’s crypto trading and multi-level marketing structure to attract more than 90,000 investors worldwide. Participants were promised daily returns ranging from 0.5% to 3% through what Palafox described as sophisticated Bitcoin trading strategies.
Prosecutors said no legitimate trading activity supported those claims. Instead, the operation functioned as a classic Bitcoin Ponzi scheme, using funds from new investors to pay earlier participants while diverting substantial sums for personal enrichment.
Federal investigators detailed how proceeds from the Bitcoin Ponzi scheme were funneled into luxury purchases. In a statement outlining the case, the Justice Department said Palafox spent approximately $3 million on 20 high-end vehicles, including models from Porsche, Lamborghini, McLaren, Ferrari, BMW, and Bentley.
He also spent roughly $329,000 on penthouse suites at a luxury hotel chain and purchased four residential properties in Las Vegas and Los Angeles valued at more than $6 million combined.
Court records further show that an additional $3 million was used for designer clothing, watches, jewelry, and furnishings from retailers such as Christian Louboutin, Neiman Marcus, Gucci, Versace, Ferragamo, Valentino, Cartier, Rolex, and Hermès.
Prosecutors argued that these expenditures were funded directly by victims of the Bitcoin Ponzi scheme, many of whom believed their savings were being deployed in legitimate crypto markets.
The case underscores the global reach of digital asset fraud. More than 90,000 individuals invested in PGI’s program, with total deposits exceeding $200 million. While not every investor suffered a total loss, government filings indicate tens of millions of dollars in collective damages.
The Bitcoin Ponzi scheme relied heavily on social media marketing, referral incentives, and multi-level recruitment tactics to expand its footprint internationally. Investigators said this structure accelerated growth while masking the absence of genuine trading profits.
“Fraud schemes that exploit emerging technologies can cause devastating financial harm,” said a Justice Department official in announcing the sentencing. “This sentence reflects the seriousness of orchestrating a large-scale Bitcoin Ponzi scheme that targeted thousands of victims.”
Palafox initially contested the allegations but ultimately pleaded guilty in 2025, admitting his role in operating the Bitcoin Ponzi scheme and laundering investor funds. The plea agreement acknowledged that investor money was routinely diverted away from any purported trading activity.
At sentencing, the court emphasized both the scale of the losses and the deliberate deception involved. A 20-year term places the case among the more severe prison sentences imposed in crypto-related fraud prosecutions.
Legal analysts note that the punishment sends a clear deterrent message as digital asset enforcement actions continue to rise.
The investigation into the Bitcoin Ponzi scheme was led by the FBI’s Washington Field Office in coordination with the Internal Revenue Service Criminal Investigation Division. Authorities traced fund flows through crypto wallets and traditional bank accounts to reconstruct how investor deposits were spent.
IRS Criminal Investigation officials have repeatedly warned that crypto’s pseudonymous features do not shield criminals from detection. Blockchain analytics, combined with conventional forensic accounting, played a central role in dismantling the Bitcoin Ponzi scheme.
“Following the money remains our most powerful tool,” an IRS-CI spokesperson said in a prior statement related to the case. “Digital assets leave trails.”
Some victims of the Bitcoin Ponzi scheme have already received court-approved restitution orders, though full recovery remains uncertain. Authorities continue efforts to identify and liquidate remaining assets linked to Palafox in order to compensate defrauded investors.
Victim impact statements submitted to the court described lost retirement savings, drained college funds, and significant emotional distress stemming from the collapse of the Bitcoin Ponzi scheme.
While enforcement actions against fraudulent operators have increased, regulators continue to stress that the existence of a Bitcoin Ponzi scheme does not invalidate legitimate blockchain innovation. Instead, officials argue that transparency and compliance are essential to building sustainable digital asset markets.
Industry observers say the PGI case illustrates how high-yield promises remain a red flag. Guaranteed daily returns — especially in volatile crypto markets — often signal structural fraud rather than investment expertise.
As the dust settles, the sentencing of Palafox closes a chapter on one of the more extensive Bitcoin Ponzi scheme prosecutions in recent years. For regulators, it reinforces their crackdown. For investors, it serves as a stark reminder: if returns sound too consistent to be true, they often are.
With enforcement agencies sharpening their focus, future operators of any Bitcoin Ponzi scheme will likely face similarly aggressive prosecution — and potentially decades behind bars.
