The United States Securities and Exchange Commission (SEC) has taken legal action against Novatech and its founders, Cynthia and Eddy Petion, alongside several promoters, for allegedly orchestrating a large-scale fraud.
On August 12, 2024, the SEC formally accused the company of running a Ponzi scheme that swindled over 200,000 investors out of more than $650 million.
According to the SEC’s complaint, Novatech misled investors by claiming their funds were being invested in digital assets and foreign exchange markets with promises of immediate profits.
In reality, only a fraction of the money was used for trading.
The bulk of the funds were allegedly funnelled to pay off earlier investors and to compensate promoters, while some were reportedly diverted for the personal use of the founders.
The situation took a darker turn in May 2023 when Novatech claimed that a significant portion of the funds had been lost due to a cyberattack.
The company reassured investors that efforts were underway to recover the stolen assets, though these claims are now under scrutiny by regulators.
Notably, the SEC highlighted the impact of the alleged fraud on New York City’s Haitian community, where promises of financial returns drew in many residents.
The SEC’s charges extend beyond the company’s founders to include several promoters—Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley—who allegedly played key roles in luring investors into the scheme.
Eric Werner, the director of the SEC’s Fort Worth Regional Office, emphasized that the agency is committed to holding the architects and the promoters of such schemes accountable.
In response to these allegations, the SEC is seeking significant legal remedies, including permanent injunctive relief, civil penalties, and the return of misappropriated funds to investors.
This federal action follows a June 2024 lawsuit filed by New York Attorney General Letitia James against Novatech, its founders, and AWS Mining, a now-defunct entity associated with the company.
The lawsuit, representing over 11,000 New York City residents, accuses the defendants of exploiting religious sentiments and using influencers to sell their fraudulent investment opportunities.
