The SEC's lawsuit also targets six other promoters of the NovaTech scheme, all of whom the agency says used "religious overtones" when attracting new investors. Ultimately, the scheme was revealed to be a Ponzi scheme, with new investors' money being used to pay out previous investors, as the promoters also took money for themselves.
SEC charges promoters of NovaTech pyramid scheme
Following a lawsuit from the New York Attorney General in June, the SEC has filed a lawsuit against the promoters of the NovaTech crypto pyramid scheme and affinity fraud. Cynthia and Eddy Petion particularly targeted victims of Haitian descent, promoting their schemes in Creole, leveraging their victims' religion, and promising them "financial freedom" and "freedom from the plantation".
- "SEC Charges NovaTech and its Principals and Promoters with $650 Million Crypto Fraud", US Securities and Exchange Commission [archive]
New York Attorney General sues over $1 billion NovaTech and AWS Mining crypto pyramid schemes
The New York Attorney General’s office has sued Cynthia and Eddy Petion over two allegedly fraudulent cryptocurrency pyramid schemes called AWS Mining and NovaTech. They particularly targeted victims of Haitian descent, promoting their schemes in Creole, leveraging their victims’ religion, and promising them “financial freedom” and “freedom from the plantation”.
In reality, the schemes were pyramid schemes in which investors earned crypto for recruiting others to buy in. NovaTech also used the funds from newer investors to pay out the supposed “returns” from the investment scheme, in a classic Ponzi fashion. From August 2019 – April 2023, victims deposited more than $1 billion into NovaTech. Though it was described as a trading operation, only about $26 million ever went into crypto trading.
In June 2022, the couple secretly sold their Florida house and moved to Panama, while continuing to pretend they were in the state. Speaking to another operator of the scheme, Cynthia Petion advised: “leave the country…they can’t serve you if they can’t find you lol.”