The U.S. Securities and Exchange Commission (SEC) accused the founders and promoters of NovaTech of orchestrating a Ponzi scheme that amassed over $650 million in crypto assets.
According to the statement, NovaTech Ltd., led by the couple Cynthia and Eddy Petion, raised funds from more than 200,000 investors worldwide. Charges were also brought against Martin Zizi, Dapilin Dunbar, James Corbett, Corry Sampson, John Garofano, and Marsha Hadley for their roles in promoting the scheme.
The Petions operated NovaTech as a MLM project for cryptocurrency investment from 2019 to 2023, the regulator noted. They solicited funds from investors, promising to invest them in digital assets and currency markets.
Participants were assured of “investment safety, profit from day one, and access to capital.” However, in reality, a significant portion of the funds was used to pay existing investors, promoters, and for the Petions’ personal use.
“MLM schemes of this magnitude require promoter activity to sustain them. Our actions demonstrate that we will hold accountable not only the organizers but also the promoters who spread scams, unlawfully attracting victims,” said Eric Werner, director of the SEC’s Fort Worth Regional Office.
The Commission charged the defendants with violating anti-fraud provisions and registration requirements. The regulator seeks a permanent injunction, civil penalties, and the return of funds.
Zizi agreed to a partial settlement without admitting or denying the charges.
In June, New York Attorney General Letitia James filed a lawsuit against NovaTech and related individuals and companies, claiming that hundreds of thousands of investors lost over $1 billion due to the scheme’s activities.
Back in late July, the SEC accused BitClout founder Nader Al-Naji of fraud.