EP 34: Behind the Scams: Crypto Ponzi Exposed — The PGI Ponzi Scheme

Introduction

In this episode of Behind the Scams, Nick and Sue uncover one of the most elaborate cryptocurrency frauds in recent memory: Praetorian Group International (PGI), led by Ramil Ventura Palafox.

At its height, PGI boasted more than 90,000 investors worldwide and promised daily returns of 0.5% to 3%. In reality, it was a sophisticated Ponzi scheme that siphoned off over $200 million. Investors were lured in by flashy events, luxury cars, and fake licensing claims.

This blog-style recap dives into the details, the psychology of the scam, and the lessons you can take away to protect yourself.

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A Global Ponzi Scheme Dressed as Crypto

Between 2019 and 2021, PGI pitched itself as a cutting-edge bitcoin investment platform. In reality, it was a multilevel marketing pyramid disguised as crypto trading.

The scope was staggering. Investors came not only from the United States but also from the Philippines, Canada, Australia, and Europe. Wire transfers crisscrossed between Las Vegas, the Philippines, and other international accounts.

PGI’s marketing strategy leaned on social pressure. Master distributors recruited new investors, who in turn recruited others, feeding the cycle.

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The False Promise of Daily Returns

PGI guaranteed investors daily returns between 0.5% and 3%. Even at the low end, this added up to 180% annually—more than ten times the average long-term return of the S&P 500.

No legitimate investment can sustain such figures. Yet thousands believed it, reassured by PGI’s elaborate explanations about trading algorithms and pooled investor funds.

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Luxury and Theatrics as a Selling Point

One of the defining features of PGI was the spectacle. Investor events in Dubai penthouses, Las Vegas suites, and yachts were designed to overwhelm skepticism. Palafox even used a cash cannon to spray money into crowds.

The forfeiture list reveals just how investor money was spent:

• Over 20 high-end cars, including Ferraris, Lamborghinis, Rolls-Royces, and McLarens.

• Hundreds of Hermès, Chanel, and Louis Vuitton handbags.

• Jewelry and watches, including Rolexes, Cartier, and Hublot.

Every purchase was made with investor money, while victims believed their accounts were compounding daily.

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Technology as a Tool of Deception

To reinforce the illusion, PGI built an online investor portal. Investors could log in and see their balances steadily increasing. The portal displayed fabricated charts and transaction histories that appeared professional and convincing.

For many, this daily reinforcement was enough to silence doubt and encourage further investment.

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How It Fell Apart

By early 2021, withdrawal problems emerged. Investors were told PGI was experiencing technical difficulties with its payment processors. When delays stretched into months, Palafox reassured them with promises of new payment partners—classic “lulling statements” designed to buy time.

The reality was that PGI no longer had sufficient funds. New investor money was used to pay earlier investors while millions were siphoned into Palafox’s personal accounts.

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Chapters

• (00:00:01) - Behind the Scams: The Crypto Ponzi Scheme
• (00:01:11) - The Crypto Ponzi Scam
• (00:03:35) - Bitcoin Scammer Arrested in Las Vegas
• (00:06:58) - PGI Scam: How They Got Investors to Invest
• (00:08:42) - Floyd Palafox Was Living Like A Rap Star
• (00:14:57) - Palafox Faces 8 Counts in Fraud Case
• (00:20:24) - FlipCoin Scam: What Investors Need to Know
• (00:25:51) - Ponzi Scam: How To Catch a Scammer
• (00:33:47) - How to Get Your Money Back in Fraud Cases
• (00:35:13) - Asset Forfeiture
• (00:35:48) - What to Do If Scammer Is Trying to Get You to
• (00:40:26) - What Kind of Prison Time Might Palafox Get for His Fraud
• (00:42:49) - Scammering Investors: What You Need to Know
• (00:43:51) - Fraud 2.0: The PGI Case
• (00:45:12) - Fraud Checklist
• (00:46:27) - Red Flags of Inves