The US Securities and Exchange Commission (SEC) has filed a lawsuit against NovaTech for operating a fraudulent enterprise, resulting in 0 million in losses for unsuspecting investors. Its founders and promoters are also defendants in the suit, looking at the possibility of facing jail time along with fines and disgorgements. NovaTech, started by Cynthia and Eddy Petion, targeted religious groups, mainly Haitian churchgoers in the US and elsewhere. It amassed 0 million from over 200,000 investors worldwide between June 2019 and May 2023. The pyramid scheme’s promoters used WhatsApp as a medium to lure investors. The SEC court filing read, ”From June 2019 to approximately May 2023, Cynthia Petion and Eddy Petion (together, the “Petions”) operated a fraudulent crypto trading
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The US Securities and Exchange Commission (SEC) has filed a lawsuit against NovaTech for operating a fraudulent enterprise, resulting in $650 million in losses for unsuspecting investors. Its founders and promoters are also defendants in the suit, looking at the possibility of facing jail time along with fines and disgorgements.
NovaTech, started by Cynthia and Eddy Petion, targeted religious groups, mainly Haitian churchgoers in the US and elsewhere. It amassed $650 million from over 200,000 investors worldwide between June 2019 and May 2023. The pyramid scheme’s promoters used WhatsApp as a medium to lure investors.
The SEC court filing read, ”From June 2019 to approximately May 2023, Cynthia Petion and Eddy Petion (together, the “Petions”) operated a fraudulent crypto trading investment and pyramid scheme primarily through NovaTech, a company registered in St. Vincent and the Grenadines. The Petions used a multi-level marketing (“MLM”) structure to raise crypto assets worth more than $650 million from over 200,000 investors in the United States and abroad, including many in the Haitian-American community.”
The filing also noted that the scheme’s founders and employees integrated religious feelings into their pitches and marketing to attract churchgoers to invest. Cynthia Petion referred to herself as the “Reverend CEO” in promotional content and on social media. She relayed to investors that she received the vision to start NovaTech from God when brushing her teeth.
Divine or not, Cynthia and Eddy—the Petions—alongside promoters, Martin Zizi, James Corbett, Corrie Sampson, Dapilinu Dunbar, John Garofano, and Marsha Hadley, caused tremendous financial distress to their victims. Their plan involved promising investors 2-3% weekly returns, generated through the crypto and foreign exchange markets. They even told investors their investments in these markets would not result in losses.
However, only a fraction of what NovaTech received from victims was invested and suffered massive trading losses. The returns offered to investors came from the investments received from newer ones, making NovaTech’s operations the textbook definition of a Ponzi scheme. Pyramid and Ponzi schemes often go hand-in-hand.
When the funds began drying up in October 2022, as they usually do with such scams, the authorities were notified. Numerous state securities regulators sent cease and desist orders to the disgraced operation. NovaTech’s website shut down a few months later, preventing the ability of investors from withdrawing their funds.
The Petions are assumed to be living in Panama. One promoter, Zizi, has agreed to pay $100,000 in civil penalty alongside other sanctions.
New York Attorney General, Letitia James, also filed a case against NovaTech two months before the SEC stepped in, estimating their crimes led to damages of over $1 billion.