NovaTech Ltd., the multi-level marketing company has been charged for its part in a $650 million crypto fraud scheme.
The company owners and staff have also been charged. Cynthia and Eddy Petion, face the fury of the Securities and Exchange Commission (SEC) alongside Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley.
SEC charges Nova Tech
The government watchdog has been stirred due to a lattice of fraud that targeted individuals from the Haitian-American community. The corrupt money-generating plan also drummed up $650 million in crypto assets from more than 200,000 investors worldwide.
The SEC alleges that between 2019 and 2023, the company owners (Cynthia and Eddy Petion) ran Nova Tech as a crypto asset investment program. They made assurances that investors would have their monetary stakes placed in the global crypto market.
In reality, this was a fraudulent claim, says the SEC. “NovaTech used the majority of investor funds to make payments to existing investors and to pay commissions to promoters, using only a fraction of investor funds for trading.,” said today’s statement.
Cynthia Petion, according to the complaint, assured investors that their investments would be safe and guaranteed that “[i]n this program, you are in profit from day one, because again you have access to that capital.”
This would also not be the case according to the SEC investigation. The Peitons allegedly siphoned millions of dollars of investments for their gains and locked investors out of the money they supposedly could access.
The money was also used to galvanize Zizi, Dunbar, Corbett, Sampson, Garofano, and Hadley via lucrative commissions. The commissions were allegedly used to motivate the group to promote and drive investor relations, despite government regulators showing that their process raised several red flags.
“NovaTech and the Petions caused untold losses to tens of thousands of victims around the world,” said Eric Werner, Director of the SEC’s Fort Worth Regional Office. “As we allege, MLM schemes of this size require promoters to fuel them, and today’s action demonstrates that we will hold accountable not just the principal architects of these massive schemes, but also promoters who spread their fraud by unlawfully soliciting victims.”
The U.S. District Court for the Southern District of Florida would be the backdrop for the SEC charges against NovaTech, the Petions, Zizi, Dunbar, Corbett, and Sampson for “violating the antifraud provisions of the federal securities laws, and all of the defendants with registration violations. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties.”
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