The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the cryptocurrency company NovaTech and its co-founders, Cynthia and Eddy Petion, accusing them of defrauding over 200,000 investors worldwide, including a significant number of Haitian-Americans. The SEC alleges that NovaTech raised more than $650 million through deceptive practices, promising investors safety and guaranteed profits.
According to the SEC, Cynthia Petion claimed investors would start seeing profits "from day one," but instead, the company allegedly used incoming funds primarily to pay earlier investors and promoters, while diverting millions for personal gain. The fraudulent scheme reportedly continued for four years, culminating in NovaTech’s collapse in May 2023.
The SEC’s action in Miami federal court follows a similar lawsuit filed two months prior by New York Attorney General Letitia James in Manhattan, which estimated the total fraud at over $1 billion. Both legal actions describe NovaTech as operating a pyramid scheme, where new investments were used to pay returns to earlier investors, while the company and its promoters enriched themselves.
The case highlights NovaTech’s use of religious and faith-based appeals to attract investors, with outreach conducted through social media, Telegram, WhatsApp, and sometimes in Haitian Creole. Cynthia Petion, who referred to herself as the "Reverend CEO," promoted NovaTech as a venture inspired by "God's vision."
In addition to the Petions, the SEC has charged six NovaTech promoters with fraud. These promoters continued recruiting new investors despite numerous warning signs, including delayed withdrawals and regulatory scrutiny from U.S. and Canadian authorities. One promoter, Martin Zizi, has agreed to a $100,000 civil fine.
The lawsuits from both the SEC and the New York Attorney General’s office seek restitution for victims and civil penalties. Legal representatives for NovaTech and the Petions, who are believed to be residing in Panama, have not yet been publicly identified.
(Source:www.businesstimes.com.sg)
According to the SEC, Cynthia Petion claimed investors would start seeing profits "from day one," but instead, the company allegedly used incoming funds primarily to pay earlier investors and promoters, while diverting millions for personal gain. The fraudulent scheme reportedly continued for four years, culminating in NovaTech’s collapse in May 2023.
The SEC’s action in Miami federal court follows a similar lawsuit filed two months prior by New York Attorney General Letitia James in Manhattan, which estimated the total fraud at over $1 billion. Both legal actions describe NovaTech as operating a pyramid scheme, where new investments were used to pay returns to earlier investors, while the company and its promoters enriched themselves.
The case highlights NovaTech’s use of religious and faith-based appeals to attract investors, with outreach conducted through social media, Telegram, WhatsApp, and sometimes in Haitian Creole. Cynthia Petion, who referred to herself as the "Reverend CEO," promoted NovaTech as a venture inspired by "God's vision."
In addition to the Petions, the SEC has charged six NovaTech promoters with fraud. These promoters continued recruiting new investors despite numerous warning signs, including delayed withdrawals and regulatory scrutiny from U.S. and Canadian authorities. One promoter, Martin Zizi, has agreed to a $100,000 civil fine.
The lawsuits from both the SEC and the New York Attorney General’s office seek restitution for victims and civil penalties. Legal representatives for NovaTech and the Petions, who are believed to be residing in Panama, have not yet been publicly identified.
(Source:www.businesstimes.com.sg)