04-25-2025 
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There is no salvation this Easter period for global crypto scammers: a Brazilian judge handed down a record prison sentence to the man convicted of leading the money laundering operation for Braiscompany, while in the United States, the Securities and Exchanges Commission (SEC) and U.S. Attorney’s Office filed parallel charges against the man behind a fraudulent crypto scheme that raised $198 million from investors worldwide.
Record sentence in Brazil
In the first of these actions, Judge Vinícius Costa Vidor of the 4th Federal Court of Campina Grande, Brazil, handed money launderer Joel Ferreira de Souza 128 years behind bars in an April 15 ruling.
De Souza was the financial mastermind behind the digital asset Ponzi scheme Braiscompany, whose 20,000 investors were defrauded of an estimated 1.11 billion reais (around $190 million). De Souza was convicted of using shell companies and proxy accounts to launder the fraud proceeds and received 128 years behind bars, one of the longest sentences ever handed down for financial crimes in Brazil.
Two other executives were also sentenced: de Souza’s son, Victor Augusto Veronez de Souza, who received 15 years, and top broker Gesana Rayane Silva, who was handed 27 years and 10 months, along with earlier convictions that bring her total sentence to more than 40 years.
A joint amount of 36.5 million reais (around $6.3 million) was also set to compensate investors for damages caused, according to local media reports.
Fellow defendants Mizael Moreira Silva and Clélio Fernando Cabral do Ó were acquitted on money laundering charges due to insufficient evidence.
Braiscompany promised investors monthly returns of about 8% on digital assets they “locked up” with the company for one year. However, in December 2022, the company stopped paying customers, and a couple of months later, in February 2023, the pyramid scheme collapsed. The same month, Brazil’s federal police launched a nationwide crackdown, known as Operation Halving, and executed search warrants at the company’s offices.
The investigation prompted Braiscompany’s founders, couple Fabrícia Campos and Antônio Neto Ais, to flee to Argentina. They were apprehended after more than a year on the run and are currently under house arrest, awaiting extradition to Brazil.
Campos and Ais were sentenced in absentia in February of last year, with the former receiving 61 years and 11 months and the latter 88 years and seven months; eight others involved in the Ponzi were also sentenced at the time.
The recent sentence against de Souza stems from a separate case focused on Braiscompany’s money laundering operation.
SEC charges Palafox
Not to be outdone, on April 22, the U.S. SEC charged Ramil Palafox with orchestrating a fraudulent scheme that raised approximately $198 million from investors worldwide and misappropriating more than $57 million of investor funds.
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Virginia, charged Palafox with violating the anti-fraud and registration provisions of the federal securities laws.
According to the SEC, Palafox’s company, known as PGI Global, claimed to be a foreign and digital asset exchange trading company. Between January 2020 and October 2021, Palafox offered and sold PGI Global “membership” packages, which he claimed guaranteed investors high returns from PGI Global’s supposed digital asset and foreign exchange trading. He also offered members “multi-level-marketing-like” referral incentives to encourage them to recruit new investors.
However, the SEC alleges that Palafox misappropriated more than $57 million in investor funds to buy Lamborghinis, items from luxury retailers, and other personal expenses. He also used the majority of the remaining investor funds to pay other investors their purported returns and referral rewards in a “Ponzi-like scheme” until its collapse in late 2021.
“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,” said Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office. “We will continue to investigate and take action against bad actors who take advantage of investors with promises of guaranteed passive income and other lies and deceit.”The SEC complaint seeks permanent injunctive relief, conduct-based injunctions preventing Palafox from participating in multi-level marketing programs involving the offer or sale of securities and/or digital assets, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
The complaint also named BBMR Threshold LLC, Darvie Mendoza, Marissa Mendoza Palafox, and Linda Ventura as relief defendants, likewise seeking disgorgement of their ill-gotten gains and prejudgment interest.
Laura D’Allaird, Chief of the SEC’s new Cyber and Emerging Technologies Unit—set up in February to focus on cyber-related misconduct and protect retail investors from bad actors in the emerging technologies space—said of the charges:
“Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed. In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Virginia also charged Palafox with criminal offenses.
From Ponzi to pig butchering
Global law enforcement and regulators’ determined efforts to crack down on digital asset-related Ponzi schemes, like Braiscompany and PGI Global, are needed now more than ever as profits from investment scams continue to rise.
According to 2024 data from the U.S. Federal Trade Commission (FTC), U.S. consumers reported losing more than $12.5 billion to fraud in 2024, which represents a 25% increase over the prior year.
This is backed up by worldwide trends in the digital asset space. In 2024, blockchain analysis firm Chainalysis found that stolen funds in or via the digital asset sector had increased by approximately 21%, to $2.2 billion, between 2023 and 2024.
However, the firm’s research also noted that scammers were increasingly moving away from traditional, large-scale Ponzi schemes toward more targeted schemes. Specifically, “pig butchering” represented “the most successful fraud and scam types.”
So-called ‘pig butchering’ scams (also known as romance scams) involve the targeting of individuals—rather than groups of investors, as in most Ponzi schemes—whereby the scammer will build a relationship, often romantic, and gradually convince the victim to invest more and more money in fraudulent opportunities and investments.
This type of scam increased nearly 40% in 2024 from the previous year, and Chainalysis argued that the rise of artificial intelligence (AI) technology aided this.
“We have also observed the increasing use of artificial intelligence (AI) in the fraud and scams space, such as in highly personalized sextortion attacks,” said the firm. “This use of AI is consistent with a broader trend across a range of illicit cybercrimes, as services have emerged that leverage AI to bypass know-your-customer (KYC) requirements.”
Because loosely coordinated networks often run these increasingly popular pig butchering scams and rely on fleeting digital platforms and digital asset wallets, they can also be harder to track and prosecute than centralized frauds like Ponzi schemes. This means that law enforcement may need to up their arsenal in the ongoing fight against digital asset crime.
Watch: It’s time for regulation to enable blockchain growth
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