The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the cryptocurrency company NovaTech and its founders, Cynthia and Eddy Petion, accusing them of a massive fraud involving over $650 million from more than 200,000 investors globally. The Petions allegedly misled investors by promising their funds would be secure and generate profits immediately, but instead, they used new investments to pay off earlier ones and pocketed millions for themselves. The scheme, which lasted four years, collapsed in May 2023.
The SEC’s action follows a similar lawsuit filed by New York Attorney General Letitia James, who estimates the fraud’s total at over $1 billion. Both lawsuits claim that NovaTech operated as a pyramid scheme, leveraging religious appeals and social media to attract investors, particularly targeting Haitian-American communities. The SEC has also charged six NovaTech promoters with fraud for continuing to recruit investors despite evident warnings about the company’s legitimacy. Legal proceedings are ongoing, seeking restitution for victims and civil penalties for the involved parties. The case is SEC v Nova Tech Ltd, U.S. District Court, Southern District of Florida, No. 24-23058.
If you have any questions on cryptocurrency fraud litigation, please contact Michael Haeberle at mhaeberle@pattersonlawfirm.com