Washington, Tuesday, August 13, 2024- The Securities and Exchange Commission (SEC) on Monday charged a multi-level marketing company, NovaTech, and its principals with defrauding more than 200,000 investors worldwide of over $650 million in cryptocurrency.
The full text of the SEC Press Release can bee seen here.
Cynthia and Eddy Petion, the company’s founders, are accused of operating NovaTech as a pyramid scheme, luring investors with promises of high returns on crypto and foreign exchange investments.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges NovaTech, the Petions, Zizi, Dunbar, Corbett, and Sampson with violating the antifraud provisions of the federal securities laws and all of the defendants with registration violations.
The SEC alleges the couple used most of the funds to pay existing investors and promoters, rather than for trading as promised.
Six other individuals were also charged for their roles in promoting NovaTech. The SEC alleges they continued to recruit investors even after becoming aware of regulatory actions against the company.
The agency is seeking financial penalties and to bar the defendants from future securities violations. One defendant, Martin Zizi, agreed to a $100,000 penalty and a permanent injunction.
The text of the Press Release of the SEC is given below
According to the SEC’s complaint, the Petions operated NovaTech as a multi-level marketing (MLM) and crypto asset investment program from 2019 through 2023.
“As we allege, MLM schemes of this size require promoters to fuel them, and today’s action demonstrates that we will hold accountable not just the principal architects of these massive schemes, but also promoters who spread their fraud by unlawfully soliciting victims,” the SEC said in the press release.
The SEC’s complaint alleges that NovaTech’s top promoters, Zizi, Dunbar, Corbett, Sampson, Garofano, and Hadley, each recruited a wide network of investors and promoters. NovaTech paid them substantial commissions for the investors they and their networks recruited. When Zizi, Dunbar, Corbett, and Sampson became aware of certain red flags about NovaTech, including regulatory actions taken against it by U.S. and Canadian regulators, they continued recruiting investors and downplayed the red flags.
The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties.
