The cryptocurrency startup NovaTech and its married co-founders were sued by the U.S. Securities and Exchange Commission on Monday. According to the commission, the pair deceitfully raised over $650 million from over 200,000 investors worldwide, many of whom were Haitian-Americans.
Investors were purportedly promised a safe haven by NovaTech and its co-founders, Cynthia and Eddy Petion, with Cynthia Petion even guaranteeing that they would be “in profit from day one.”
The Petions, according to the SEC, took millions of dollars for themselves and used the additional money mostly to pay commissions to promoters and repay previous investors. Prior to NovaTech’s demise in May 2023, the scheme was stated to have run for four years.
The case filed on Monday in a federal court in Miami comes two months after New York Attorney General Letitia James filed a lawsuit against NovaTech and the Petions in a Manhattan state court, claiming that the fraud involved was worth over $1 billion.
Regulators claimed that Cynthia Petion, who called herself “Reverend CEO” and claimed that NovaTech was “God’s vision,” attempted to use social media, WhatsApp, and Telegram to appeal to the victims’ religious beliefs. At times, Petion used the Haitian Creole language.
It was not possible to immediately identify the attorneys for NovaTech and the Petions, who are thought to reside in Panama.
The scam was referred to by both regulators as a pyramid scheme, in which businesses provide incentives or commissions for bringing in new clients.
In addition, six NovaTech promoters were accused of fraud by the SEC, claiming that despite “red flags,” like delayed withdrawals and regulatory measures by the US and Canada that cast doubt on the company’s legitimacy, they continued to seek out investors.
Martin Zizi, one promoter, consented to pay a civil penalty of $100,000. An inquiry for comment from his attorney was not immediately answered. Restitution for the victims and civil penalties are sought in both lawsuits.
UNDC No. 24-23058 is the case number for the Southern District of Florida U.S. District Court case SEC v. Nova Tech Ltd.
