The U.S. Securities and Exchange Commission （SEC） has charged Cynthia and Eddy Petion, the founders of NovaTech, with orchestrating a massive cryptocurrency fraud that swindled over $650 million from more than 200,000 investors worldwide. The scheme primarily targeted vulnerable communities, including the Haitian-American community, under the guise of a lucrative crypto and forex investment opportunity.
Points
- Massive Crypto Fraud: NovaTech’s founders are accused of running a $650 million Ponzi scheme, affecting over 200,000 investors globally.
- Targeted Communities: The fraudulent scheme preyed on vulnerable communities, particularly within the Haitian-American community.
- Regulatory Crackdown: The SEC’s charges are part of a broader effort to crack down on fraudulent practices within the crypto industry.
The U.S. Securities and Exchange Commission （SEC） has filed charges against Cynthia and Eddy Petion, the masterminds behind NovaTech, a crypto investment platform accused of defrauding over 200,000 investors worldwide. The scheme, which allegedly siphoned off more than $650 million, was particularly devastating to the Haitian-American community, many of whom were lured in by promises of high returns on their investments in cryptocurrency and foreign exchange （forex） markets.
NovaTech operated from 2019 to 2023 as a multi-level marketing （MLM） and investment program, enticing investors with the promise of “profit from day one.” However, according to the SEC, these claims were nothing more than a smokescreen. The vast majority of the funds were not invested in crypto or forex markets as advertised. Instead, they were used to pay off earlier investors in classic Ponzi scheme fashion, while the Petions and their associates pocketed substantial sums for themselves.
The SEC’s complaint also names six other individuals—Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley—who are accused of promoting NovaTech and helping to perpetuate the fraud. Despite seeing red flags, including increasing scrutiny from U.S. and Canadian regulators, these promoters continued to recruit new investors, often downplaying the risks involved.
As NovaTech’s operation began to crumble, many investors found themselves unable to withdraw their funds, leading to widespread financial devastation. The Petions allegedly funneled a significant portion of the investors’ money into personal accounts and luxury purchases, further compounding the losses.
“The Petions and their fraudulent setup caused untold losses to tens of thousands of victims around the world,” said Eric Werner, Director of the SEC’s Fort Worth Regional Office. He emphasized that the SEC is committed to holding not only the leaders but also the promoters of such schemes accountable.
The SEC’s charges against NovaTech are part of a broader crackdown on fraudulent schemes within the crypto industry. The agency has been increasingly vigilant in monitoring and taking action against companies that exploit the growing interest in digital assets to deceive investors.
解説
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Ponzi Scheme Mechanics: NovaTech’s operation followed the classic Ponzi scheme model, where returns to earlier investors were paid from the funds of newer investors, rather than from profit earned by the company. Such schemes are unsustainable and often collapse when new investments dry up or when too many investors try to withdraw their money at once.
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Targeted Exploitation: The case highlights how fraudulent schemes often target specific communities, exploiting cultural and linguistic ties to build trust and lure in victims. The focus on the Haitian-American community underscores the vulnerability of minority groups to such predatory practices, particularly when promises of financial empowerment and community advancement are involved.
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Regulatory Response: The SEC’s aggressive pursuit of NovaTech and its promoters demonstrates the agency’s commitment to protecting investors and maintaining integrity in the financial markets. As the cryptocurrency market continues to grow, regulatory bodies are likely to increase their scrutiny of similar schemes to prevent further exploitation of unsuspecting investors.