SEC Charges NovaTech and Founders in Alleged $650 Million Crypto Fraud Scheme
The U.S. Securities and Exchange Commission (SEC) has filed charges against NovaTech Ltd., its founders Cynthia and Eddy Petion, and several promoters for allegedly operating a fraudulent cryptocurrency scheme that raised over $650 million from more than 200,000 investors worldwide.
According to the SEC’s complaint filed in the U.S. District Court for the Southern District of Florida, NovaTech operated as a multi-level marketing (MLM) and crypto asset investment program from 2019 to 2023. The company allegedly lured investors, particularly targeting the Haitian-American community, by promising to invest their funds in cryptocurrency and foreign exchange markets.
Cynthia Petion, who branded herself as the “Reverend CEO,” reportedly assured investors that their investments would be safe and profitable “from day one.” However, the SEC alleges that only a small fraction of the pooled funds were actually used for trading, with the majority being used to pay existing investors and promoters in a Ponzi-like structure.
The complaint further states that the Petions siphoned millions of dollars of investor assets for personal use. When NovaTech collapsed in May 2023, most investors were unable to withdraw their funds, resulting in substantial losses.
Eric Werner, Director of the SEC’s Fort Worth Regional Office, stated, “NovaTech and the Petions caused untold losses to tens of thousands of victims around the world. As we allege, MLM schemes of this size require promoters to fuel them, and today’s action demonstrates that we will hold accountable not just the principal architects of these massive schemes, but also promoters who spread their fraud by unlawfully soliciting victims.”
The SEC has also charged six NovaTech promoters – Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley – for their roles in recruiting investors and downplaying red flags about the company’s operations.
This action follows a similar lawsuit filed in June by New York Attorney General Letitia James, which estimated the fraud at more than $1 billion and accused NovaTech of targeting immigrant and religious communities.
The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties against all defendants. One promoter, Martin Zizi, has already agreed to partially settle the charges by consenting to a $100,000 civil penalty, subject to court approval.
