The U.S. Securities and Exchange Commission (SEC) has charged the founders of NovaTech Ltd., Cynthia and Eddy Petion, along with their company and several promoters, with operating a cryptocurrency pyramid scheme that raised more than $650 million.
The SEC’s complaint was filed in the U.S. District Court for the Southern District of Florida, and accuses the Petions and their co-defendants of defrauding over 200,000 investors worldwide, particularly targeting the Haitian-American community.
The complaint also names several Novatech promoters, including Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley. The SEC is seeking “permanent injunctive relief, civil penalties, disgorgement, and the return of funds misappropriated from investors.”
According to the SEC, NovaTech promised investors that their funds would be invested in cryptocurrency and FX markets. However, the company allegedly used the majority of the investors’ money to pay existing investors and commissions to promoters, while also spending millions on personal expenses. The scheme, which collapsed in May 2023, left most investors unable to withdraw their funds.
The SEC has charged NovaTech, the Petions, and others involved with violating antifraud provisions and registration requirements. One of the promoters, Martin Zizi, has agreed to a partial settlement without admitting or denying the allegations. This case follows a similar lawsuit filed by New York Attorney General Letitia James against the Petions in June.
– Advertisement –
The SEC said that the scale of this scheme was made possible by the actions of promoters and reiterated that it will hold all parties accountable for their roles in such fraudulent activities. The lawsuit also highlighted the use of religious overtones and influencers to attract investors to the alleged Ponzi scheme.
In June 2024, New York Attorney General Letitia James filed a lawsuit against Novatech, its founders, and AWS Mining, accusing them of defrauding more than 11,000 New York City residents.
