Crypto Firm NovaTech and Founders Sued by SEC Over Alleged $650M Fraud Scheme Targeting 200,000 Investors
The US Securities and Exchange Commission (SEC) filed a lawsuit on Monday against the cryptocurrency company NovaTech and its co-founders, Cynthia and Eddy Petion, accusing them of orchestrating a fraudulent scheme that raised over $650 million from more than 200,000 investors worldwide, including a significant number of Haitian-Americans.
According to the SEC, NovaTech and the Petions misled investors with assurances that their investments were secure, with Cynthia Petion even claiming that investors would “be in profit from day one.” However, the SEC alleges that instead of safeguarding investor funds, the Petions primarily used new investments to pay off earlier investors and to reward promoters, while diverting millions for their own personal use. The scheme, which allegedly persisted for four years, ultimately collapsed in May 2023.
This lawsuit, filed in a federal court in Miami, comes just two months after New York Attorney General Letitia James initiated a separate legal action against NovaTech and the Petions in a Manhattan state court, where the alleged fraud was estimated to exceed $1 billion.
Regulators accuse NovaTech of exploiting victims’ religious beliefs, using platforms like social media, Telegram, and WhatsApp—often communicating in Haitian Creole—to gain trust. Cynthia Petion, who branded herself as “Reverend CEO,” portrayed NovaTech as part of “God’s vision.”
The Petions, who are reportedly residing in Panama, have yet to respond to the allegations, and legal representation for them could not be immediately identified.
Both regulatory bodies have labeled the operation as a pyramid scheme, in which new investor money is used to pay bonuses or commissions to existing participants. The SEC also charged six NovaTech promoters with fraud, alleging they continued to recruit investors despite clear warning signs, such as delays in withdrawals and regulatory actions in the US and Canada that cast doubt on NovaTech’s legitimacy.
One promoter, Martin Zizi, has agreed to pay a $100,000 civil penalty. His attorney has not commented on the matter.
Both lawsuits aim to secure restitution for victims and impose civil penalties on the perpetrators.
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