- The U.S. Securities and Exchange Commission (SEC) has targeted more than 200,000 investors defrauded by the crypto Ponzi scheme NovaTech.
- NovaTech and eight of its promoters were charged with fraud and multiple violations of federal securities laws by the SEC.
- According to the SEC, NovaTech defrauded over 200,000 investors worldwide of approximately $650 million between June 2019 and May 2023.
This comprehensive breakdown reveals the intricate details of how NovaTech, a crypto Ponzi scheme, defrauded investors of hundreds of millions of dollars.
SEC Sues NovaTech over Massive Crypto Fraud
The SEC has launched a lawsuit against NovaTech and its promoters, accusing them of a large-scale Ponzi scheme that victimized over 200,000 investors globally. The fraudulent activities spanned four years, from June 2019 to May 2023, deceiving investors out of an estimated $650 million.
Targeting Vulnerable Communities
NovaTech strategically targeted specific groups, such as Haitian-American church congregations, to execute its fraudulent scheme. The company utilized WhatsApp groups and promotional events to attract investors, falsely promising that their funds would be invested in cryptocurrency and foreign exchange markets.
Promises of High Returns Unfulfilled
Investors were lured with promises of weekly returns ranging from 2% to 3%. However, the SEC alleges that NovaTech misappropriated the invested funds for fraudulent purposes, with only a small portion genuinely invested, which resulted in substantial losses.
The Role of NovaTech’s Founders
NovaTech was founded by Cynthia and Eddy Petion, U.S. citizens believed to be residing in Panama. The couple is accused of deceiving investors using religious rhetoric, with Cynthia Petion branding herself as the “Pastor CEO” and claiming divine inspiration for the company’s creation.
Legal Repercussions for Promoters
Promoters associated with NovaTech, including Martin Zizi, James Corbett, Corrie Sampson, Dapilinu Dunbar, John Garofano, and Marsha Hadley, are also defendants in the SEC’s lawsuit. Notably, Martin Zizi has agreed to pay a $100,000 penalty and vowed to refrain from future securities law violations, pending court approval.
Conclusion
The SEC’s lawsuit against NovaTech highlights the pervasive nature of financial fraud in the cryptocurrency sector. Investors are urged to exercise caution and seek credible advice before committing funds to similar schemes. This case underscores the importance of regulatory oversight and due diligence in protecting investors from predatory financial practices.
