Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at a recent filing by the SEC against NovaTech.
SEC Filing
The U.S. Securities and Exchange Commission (SEC) have filed charges against NovaTech and its principals in relation to a $650 million crypto fraud. The press release published by the SEC noted that the fraudulent scheme involved a multi-level marketing structure where NovaTech falsely promised safe investments in crypto and foreign exchange markets. Over 200,000 investors were impacted globally.
These funds were collected and then used to pay out existing investors and commissions, making the business a Ponzi scheme and leaving millions siphoned off by the company’s leaders, Cynthia and Eddy Petion. The SEC has also charged promoters Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley, accusing them of actively recruiting investors and downplaying red flags to advance NovaTech’s scheme.
As part of the filing the SEC have revealed that the founders ran NovaTech as a multi-level marketing (MLM) and crypto asset investment scheme from 2019 to 2023. Investors were attracted by promises of their funds being used in crypto and foreign exchange markets. Cynthia Petion assured investors their funds were secure, promising profits from day one with immediate access to capital.
NovaTech mainly used investor funds to pay off earlier investors and to provide commissions to promoters. A minor fraction of the funds was used for actual trading, and the complaint alleges that the Petions diverted millions of dollars for their personal use.
The collapse of NovaTech meant many investors, which included a large number of Haitian-Americans, were unable to withdraw their funds. They suffered significant financial losses. The complaint also underscores how the scheme caused severe economic damage on specific communities.
Director of the SEC’s Fort Worth Regional Office Eric Werner noted:
“NovaTech and the Petions caused untold losses to tens of thousands of victims around the world. 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.”
Have a great day.
Peace. CryptoGod-1.
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