A US federal court has handed down a 20 year prison sentence to the founder of Praetorian Group International after concluding that the company operated a large scale cryptocurrency Ponzi scheme that drew in more than $200 million from investors worldwide.
Ramil Ventura Palafox, the chief executive behind the venture, was convicted of wire fraud and money laundering for orchestrating what prosecutors described as a long running deception that promised high daily returns from Bitcoin trading but relied largely on new investor funds to pay earlier participants.
Rise and fall of Praetorian Group International
Praetorian Group International, commonly known as PGI, marketed itself as a sophisticated crypto investment firm capable of generating daily profits of up to 3 percent through Bitcoin trading strategies. From late 2019 through 2021, the company attracted tens of thousands of customers who believed their money was being actively traded in global crypto markets.
According to court findings, investors ultimately poured more than $201 million into PGI during this period. This included thousands of Bitcoin deposits valued at over $170 million at the time. Authorities later determined that the trading activity promoted by the company did not exist at a scale that could justify the promised returns.
Instead, prosecutors said the operation followed a classic Ponzi structure, using funds from new participants to make payouts to earlier ones while presenting an illusion of steady growth.
False profits and a digital facade
Investigators revealed that Palafox maintained an online dashboard that showed investors their accounts growing consistently. These figures, however, were not tied to real trading performance. The platform was designed to reassure customers that their investments were safe and profitable, even as the underlying business failed to generate meaningful revenue.
The scheme also leaned heavily on a multilevel marketing model. Participants were encouraged to recruit friends and family in exchange for referral bonuses, widening the pool of incoming funds and accelerating the flow of money into the system.
Federal authorities said this structure helped PGI expand rapidly across borders, drawing scrutiny from regulators in several countries before US criminal charges were brought.
Luxury spending with investor funds
While investors were led to believe their money was being carefully managed, prosecutors said Palafox was using millions of dollars for personal enrichment. Court filings detailed lavish spending that included roughly $3 million on luxury vehicles and more than $6 million on high end real estate in Las Vegas and Los Angeles.
Authorities also cited large sums spent on penthouse accommodations, designer retail purchases, and other lifestyle expenses. In addition, Palafox was accused of transferring significant cash and cryptocurrency holdings to a family member, further reducing the funds available to repay victims.
Prosecutors estimated that investor losses reached at least $62.7 million by the time the scheme collapsed.
Criminal sentencing and civil action
The sentencing was delivered by a federal judge in Virginia, concluding the criminal case brought by the Department of Justice. The case was prosecuted by the US Attorney’s Office for the Eastern District of Virginia, which described the fraud as one of the larger crypto related cases in recent years based on the number of victims involved.
The criminal proceedings followed a parallel civil lawsuit filed by the Securities and Exchange Commission. In that action, regulators alleged that Palafox misrepresented PGI’s trading operations and falsely promoted an AI powered platform that could not deliver the guaranteed returns advertised to investors.
Authorities had previously seized PGI’s website in 2021, and related operations were shut down in the United Kingdom, signaling international cooperation before the US case moved forward.
What comes next for victims
With the criminal case now concluded, federal officials said affected investors may be eligible to seek restitution. Victims have been directed to official government channels for information on filing claims and participating in any recovery process tied to seized assets.
The outcome adds to a growing list of high profile crypto fraud prosecutions, underscoring the risks associated with unverified investment platforms and the increasing willingness of regulators to pursue complex digital asset schemes across borders.
