The Securities and Exchange Commission has announced civil action against Cynthia and Eddy Petion, along with their company, NovaTech Ltd., for operating a fraudulent scheme that raised more than USD650 million in crypto assets from more than 200,000 people including many Haitian-American investors and others worldwide.

The Commission also issued proceedings against Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley for their roles in promoting NovaTech to investors.

According to the Commission’s complaint, the Petions operated NovaTech as a multi-level marketing (MLM) and crypto asset investment program from 2019 through 2023. They lured investors by claiming NovaTech would invest their funds on crypto asset and foreign exchange markets. Cynthia Petion assured investors that their investments would be safe and promised that “[i]n this program[sic], you are in profit from day one, because again you have access to that capital.” In reality, NovaTech used the majority of investors' funds to make payments to existing investors and to pay commissions to promoters, using only a fraction of investors' funds for trading.

The complaint further alleges that the Petions siphoned off millions of dollars of investor assets for themselves. When NovaTech ultimately collapsed, most investors were not able to withdraw their investments, resulting in substantial losses, according to the complaint.

“NovaTech and the Petions caused untold losses to tens of thousands of victims around the world,” said Eric Werner, Director of the Commission’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 Commission’s complaint alleges that NovaTech’s top promoters, Zizi, Dunbar, Corbett, Sampson, Garofano, and Hadley, each recruited a wide network of investors and promoters. NovaTech paid them substantial commissions for the investors they and their networks recruited. When Zizi, Dunbar, Corbett, and Sampson became aware of certain warning signs about NovaTech, including regulatory actions taken against it by U.S. and Canadian regulators, they continued recruiting investors and downplayed the warning signs.

The Commission's Plaint is here: https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-95.pdf