TLDR
- The SEC filed fraud charges against NovaTech and its promoters for an alleged $650 million crypto pyramid scheme
- Over 200,000 investors worldwide were affected, many of them Haitian-Americans
- NovaTech’s founders, Cynthia and Eddy Petion, are believed to be living in Panama
- The scheme operated from June 2019 to May 2023 when it collapsed
- Promoters used religious themes to attract investors, promising 2-3% weekly returns
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against NovaTech and eight of its promoters. The SEC claims NovaTech ran a crypto pyramid scheme that took about $650 million from investors over four years.
NovaTech’s founders are Cynthia and Eddy Petion, a married couple from America. The SEC says they are now living in Panama. The scheme allegedly ran from June 2019 to May 2023, when it fell apart.
The SEC’s lawsuit states that NovaTech and its promoters targeted specific groups. They focused on Haitian Creole-speaking churchgoers in the U.S. and other countries. They used WhatsApp groups and events to reach over 200,000 investors worldwide.
Cynthia Petion called herself the “Reverend CEO” in NovaTech’s promotional materials. She claimed God gave her a “vision” to start the company while brushing her teeth. The company used religious themes to attract investors.
NovaTech promised investors their money would be used for crypto and foreign exchange trading. They said investors would get 2-3% returns each week. The company claimed it never had a weekly trading loss.
But the SEC says only a small part of the investors’ money was actually invested. The money that was invested lost a lot of value. Instead of investing, the Petions and their workers allegedly ran a Ponzi scheme. They used new investors’ money to pay earlier investors. They also reportedly took millions of dollars for themselves.
The scheme started to fail in October 2022. Investors began to have trouble taking their money out. After that, several U.S. and Canadian regulators told NovaTech to stop their operations. In May 2023, the Petions shut down NovaTech and took its website offline. This left investors unable to get their money back.
The SEC’s lawsuit says NovaTech and the Petions broke anti-fraud and securities registration laws. The promoters are accused of breaking these laws and broker registration laws.
The SEC wants the court to stop NovaTech and its promoters from breaking securities laws in the future. They also want NovaTech to give back the money they took, plus interest and fines.
One promoter, Martin Zizi, has agreed to pay a $100,000 fine. He also agreed to not break securities laws in the future. A judge still needs to approve this agreement.
This SEC lawsuit comes two months after New York Attorney General Letitia James sued NovaTech, its founders, and another alleged pyramid scheme linked to NovaTech. The New York lawsuit estimates the fraud at more than $1 billion.
The SEC filed its lawsuit in Miami federal court. The case number is SEC v Nova Tech Ltd, U.S. District Court, Southern District of Florida, No. 24-23058.
