NovaTech Founders Accused of Defrauding Investors of $650 Million in Crypto

• SEC charges NovaTech founders for alleged $650M crypto Ponzi scheme targeting investors.
• NovaTech’s scheme led to significant financial losses for thousands of global investors.  
• Promoters continued recruiting despite regulatory warnings, earning substantial commissions.

The U.S. Securities and Exchange Commission (SEC) has charged the founders of NovaTech, Cynthia and Eddy Petion, for allegedly running a Ponzi scheme that defrauded investors of $650 million in cryptocurrency. 

The SEC’s complaint details how the Petions orchestrated what they promoted as a “crypto asset investment program” and multi-level marketing (MLM) company, which primarily targeted the Haitian-American community from 2019 to 2023.

According to the SEC, NovaTech promised its investors substantial profits and the safety of their funds, claiming these would be invested in cryptocurrency and foreign exchange markets. However, the SEC alleges that most of the funds were used to pay off existing investors and promoters, while millions were siphoned for the personal benefit of the Petions. 

The scheme reportedly led to financial losses for thousands of victims worldwide when the company ultimately collapsed, leaving most investors unable to withdraw their investments.

In addition to the SEC’s charges, New York Attorney General Letitia James filed a lawsuit against NovaTech and AWS Mining in June, accusing them of operating an illegal pyramid scheme. 

The lawsuit highlighted that the scheme drew in $1 billion from investors, including 11,000 individuals from New York. James emphasized that these cryptocurrency companies specifically targeted immigrant and religious communities, promising financial freedom but instead leaving them financially devastated.

The SEC’s complaint also names several NovaTech promoters, including Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley. These individuals are accused of unlawfully recruiting investors and promoters for the scheme, earning substantial commissions. 

Despite regulatory actions taken against NovaTech by U.S. and Canadian authorities, the SEC alleges that these promoters continued to recruit investors and downplayed the warnings.
Martin Zizi has agreed to partially settle the charges by consenting to a $100,000 civil penalty, though he did not admit or deny the SEC’s allegations. The settlement, pending court approval, prohibits Zizi from participating in similar activities in the future. The SEC has indicated that additional penalties for Zizi and other promoters will be determined later.