The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against cryptocurrency company NovaTech and its co-founders, Cynthia and Eddy Petion, alleging that they orchestrated a fraudulent scheme that amassed over $650 million from more than 200,000 investors globally, including a significant number of Haitian-Americans. The SEC alleges that NovaTech and the Petions falsely assured investors of the safety of their funds, with Cynthia Petion promising profits “from day one.”
Details of the Alleged Scheme
According to the SEC, the Petions used new investor funds primarily to repay earlier investors and pay commissions to promoters, while diverting millions of dollars for their benefit. The fraudulent scheme reportedly lasted four years, ending with NovaTech’s collapse in May 2023. The lawsuit, filed in Miami federal court, follows a similar lawsuit from New York Attorney General Letitia James, who had previously estimated the fraud at over $1 billion.
The regulators accuse NovaTech of exploiting victims’ religious beliefs through social media, Telegram, WhatsApp, and even in Haitian Creole, with Cynthia Petion portraying herself as “Reverend CEO” and claiming NovaTech was “God’s vision.” Both the SEC and state regulators have labeled the scheme as a pyramid scheme, where new investments are used to pay returns to earlier investors and recruit more participants.
The SEC has also charged six NovaTech promoters with fraud, accusing them of continuing to recruit investors despite obvious warning signs, such as delayed withdrawals and regulatory scrutiny in the U.S. and Canada. One promoter, Martin Zizi, has agreed to a $100,000 civil fine.
Both the SEC and state lawsuits seek restitution for victims and civil penalties. The case is filed as SEC v. Nova Tech Ltd., U.S. District Court, Southern District of Florida, No. 24-23058.
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