The U.S. Securities and Trade Fee (SEC) has filed a lawsuit in opposition to cryptocurrency firm NovaTech and its co-founders, Cynthia and Eddy Petion, alleging that they orchestrated a fraudulent scheme that amassed over $650 million from greater than 200,000 buyers globally, together with a major variety of Haitian-Individuals. The SEC alleges that NovaTech and the Petions falsely assured buyers of the security of their funds, with Cynthia Petion promising income “from day one.”
Particulars of the Alleged Scheme
Based on the SEC, the Petions used new investor funds primarily to repay earlier buyers and pay commissions to promoters, whereas diverting tens of millions of {dollars} for his or her profit. The fraudulent scheme reportedly lasted 4 years, ending with NovaTech’s collapse in Could 2023. The lawsuit, filed in Miami federal court docket, follows an identical lawsuit from New York Lawyer Common Letitia James, who had beforehand estimated the fraud at over $1 billion.
The regulators accuse NovaTech of exploiting victims’ non secular beliefs via social media, Telegram, WhatsApp, and even in Haitian Creole, with Cynthia Petion portraying herself as “Reverend CEO” and claiming NovaTech was “God’s imaginative and prescient.” Each the SEC and state regulators have labeled the scheme as a pyramid scheme, the place new investments are used to pay returns to earlier buyers and recruit extra members.
The SEC has additionally charged six NovaTech promoters with fraud, accusing them of constant to recruit buyers regardless of apparent warning indicators, similar to delayed withdrawals and regulatory scrutiny within the U.S. and Canada. One promoter, Martin Zizi, has agreed to a $100,000 civil high quality.
Each the SEC and state lawsuits search restitution for victims and civil penalties. The case is filed as SEC v. Nova Tech Ltd., U.S. District Courtroom, Southern District of Florida, No. 24-23058.
Featured Picture: Freepik
