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.”
Instead, the SEC said the Petions siphoned millions of dollars for themselves and utilized the fresh funds primarily to reimburse previous investors and promoter commissions.
Laptops 1000According to the statement, the plan ran for four years until NovaTech’s demise in May 2023.
Two months prior, on Monday, New York Attorney General Letitia James filed a lawsuit in a Manhattan state court against NovaTech and the Petions, claiming that their deception was worth over $1 billion. The action was filed in a federal court in Miami.
Regulators claim that, with Cynthia Petion calling herself a “Reverend CEO” and claiming that NovaTech was “God’s vision,” the company attempted to appeal to the victims’ religious beliefs via social media, WhatsApp, and Telegram, at times even using the Haitian Creole language.
It was not immediately possible to identify the attorneys representing NovaTech and the Petions, who are thought to reside in Panama.
Both regulators referred to the fraud as a pyramid scheme, in which businesses compensate new investors with commissions or incentives.
In addition, the SEC filed fraud charges against six NovaTech promoters, claiming they continued to court investors despite “red flags,” or delayed withdrawals and regulatory measures by the US and Canada that cast doubt on the company’s integrity.
Martin Zizi, one promoter, consented to pay a civil fine of $100,000. When contacted for comment, his attorney did not get back to me right away.
Both cases ask for civil penalties and compensation for the victims.
