← back to the index
YL-009 Crypto yield scheme · United States / Haiti 2024

NovaTech — A $650 Million MLM Pyramid That Wore the Clothes of a Forex Firm

yield-savingsconvictedcollapse-era
Program
NovaTech
Total Losses
$650 million+
Investors
200,000+
Status
Convicted

Summary

NovaTech Ltd., a Miami-based multi-level marketing and crypto-asset investment program operated by Eddy Petion and Cynthia Petion, raised more than $650 million from at least 200,000 investors worldwide between 2019 and 2023 by claiming to trade investor funds on cryptocurrency and foreign exchange markets. No evidence of genuine trading on behalf of investors was produced. Withdrawals collapsed in or around May 2023 amid regulatory actions across multiple U.S. states and Canadian provinces. The scheme's pyramid mechanics — where earlier investors were paid from the deposits of new recruits, and where promoter networks earned commission income across multiple tiers — match the operational pattern of a Ponzi combined with an MLM recruitment incentive structure.

The scheme drew heavily from Haitian-American and broader Caribbean-diaspora communities in Florida, New York, and the Caribbean, exploiting shared language, church networks, and community trust to move capital from individuals who in many cases invested retirement savings or family remittances. Regulators in Washington State, Maryland, and several Canadian provinces had issued fraud warnings and cease-and-desist orders years before the U.S. Securities and Exchange Commission filed a civil enforcement action in August 2024. The SEC complaint named Eddy and Cynthia Petion and six major promoters — Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley — and alleged the entire structure to be an unregistered securities offering that operated as a fraud.

The Petions did not cooperate with the civil proceeding. By late 2024 the SEC reported it believed the couple may be residing outside the United States, with Dubai identified as a possible location, though that claim was later revised. As of mid-2026 the SEC's civil litigation against the Petions remains active, no criminal indictment has been publicly filed in the United States against the founders, and no investor restitution has been distributed. The promoters charged alongside the founders face civil disgorgement and penalty proceedings.

Timeline

2019
NovaTech launches
Eddy and Cynthia Petion establish NovaTech Ltd. in Miami, Florida, marketing a managed forex and cryptocurrency trading account program through a multi-level recruitment structure that pays tiered commissions to participants who recruit additional investors.
2019–2022
Rapid expansion via diaspora networks
NovaTech grows predominantly through Haitian-American and Caribbean-diaspora community channels — church groups, social media, and trust-network introductions. The platform claims to generate consistent trading returns, presenting monthly account statements to investors.
2021–2022
State-level regulators issue warnings
Washington State and other U.S. regulators issue cease-and-desist orders and fraud warnings against NovaTech. Canadian provincial securities regulators take parallel action. NovaTech's promoters continue recruiting and publicly downplay the regulatory red flags.
May 2023
Withdrawals freeze; platform collapses
Investors across the network report sustained inability to withdraw funds. NovaTech's operations effectively cease. Estimated total investor losses exceed $650 million.
June 2024
New York Attorney General files civil suit
New York AG Letitia James files a civil action naming NovaTech and its promoters, alleging participation in what is characterised as a crypto pyramid scheme primarily targeting Haitian-American investors in New York.
August 12, 2024
SEC files federal civil enforcement complaint
The Securities and Exchange Commission files suit in the Southern District of Florida naming NovaTech Ltd., Eddy Petion, Cynthia Petion, and six major promoters, alleging a $650 million fraudulent unregistered securities offering.
Late 2024
Service difficulties; Petions suspected abroad
The SEC reports difficulty serving the Petions with the complaint and states it believes the couple may be residing in Dubai, UAE. A subsequent SEC filing revises this location assessment. The civil case continues through alternate service procedures.
December 2024
Ontario Capital Markets Tribunal sanctions NovaTech
Ontario's regulator orders NovaTech and Cynthia Petion to pay a $2.5 million fine, one of multiple provincial Canadian enforcement outcomes.
Early 2025
Maryland enforcement settlement
The Maryland Securities Division finalises regulatory enforcement action, with NovaTech and the Petions subject to a $110 million fine in that jurisdiction.
Mid-2026
Civil litigation ongoing; Petions location unconfirmed
The SEC's Southern District of Florida case continues. No criminal indictment has been publicly unsealed against the Petions. Investor recovery proceedings have not resulted in any distribution to defrauded participants.

The Platform: Trading Claims and MLM Architecture

NovaTech presented itself as a professional managed-account trading service. Investors transferred cryptocurrency or fiat to the platform and were shown account dashboards reflecting purported trading gains on forex and crypto markets. The returns were framed as the output of algorithmic trading activity conducted by the platform's professional desk — consistent enough to motivate continued investment but variable enough to appear plausibly market-driven rather than mechanically fixed.

The MLM structure operated in parallel. Participants who recruited additional investors earned commissions across multiple tiers of their downline network. This created an incentive architecture in which the most financially active participants had strong personal reasons to promote the platform, discount warning signs, and recruit further. When Washington State issued a fraud order in 2021, several prominent promoters — identified by name in the SEC complaint — acknowledged awareness of the regulatory action and continued recruiting. The commission income at stake, and the social commitment already made to networks of friends, family, and congregation members who had invested on their recommendation, made active suppression of red flags individually rational even as it compounded harm for the broader investor pool.

The communities targeted were not selected arbitrarily. Haitian-Americans and Caribbean diaspora in Florida and New York were approached through the social architecture of their own communities — pastors, church networks, community leaders, and personal relationships. Trust was the primary mechanism of acquisition. This also meant that when the scheme collapsed, the financial harm was concentrated in communities that had limited access to alternative capital and in many cases had committed funds they could not afford to lose.

The Exit: Withdrawal Freeze and Regulatory Cascade

NovaTech did not execute a single dramatic exit. The collapse was gradual, traceable through a cascade of regulatory enforcement actions that the platform weathered for years before the investor withdrawal infrastructure finally failed. Between 2021 and 2023, at least seven U.S. state securities regulators and multiple Canadian provincial bodies took action against NovaTech. Each action documented the same core finding: no evidence that NovaTech was conducting the trading it claimed, and clear evidence of the MLM pyramid structure paying returns from new deposits.

The platform continued to operate despite these orders, partly because NovaTech was incorporated in jurisdictions beyond any single regulator's immediate enforcement reach, and partly because the promoter network actively countered regulatory findings with alternative narratives — describing enforcement actions as persecution of a legitimate Black-owned financial enterprise, a framing that added social-identity dimensions to investor resistance to warnings. By May 2023, however, the deposit base was insufficient to sustain withdrawal obligations. Investors received no formal notice; withdrawals simply stopped processing.

The SEC's August 2024 federal complaint, bringing civil fraud charges against the Petions and six lead promoters, was the first federal enforcement action. By that point the scheme had been dormant for over a year. The Petions' apparent departure from the United States prior to or following the SEC complaint filing meant the civil enforcement case proceeded against founders who were not present, significantly delaying the court process and making disgorgement orders difficult to execute.

The Five Factors

01
Community trust as custody mechanism
NovaTech did not need sophisticated financial infrastructure to establish custody of investor funds because it had something more powerful: the endorsement of trusted community figures in closely networked diaspora communities. Once pastors, family members, and respected community leaders became investors and promoters, the social cost of skepticism became prohibitively high for individuals embedded in those networks. Trust substituted for due diligence, and the scheme scaled by replicating that substitution across community after community.
02
MLM commission structures as fraud amplifiers
The tiered promoter commission architecture created thousands of individuals who had both financial and social incentives to sustain investor belief in the platform. When regulators issued warnings, the promoter network's response was not to investigate but to protect commissions. The SEC complaint documents promoters acknowledging fraud warnings and continuing to recruit. This is not a failure of character in isolation; it is a predictable output of an incentive architecture that makes active fraud participation individually rational.
03
Regulatory fragmentation as operational cover
NovaTech operated across multiple U.S. states and Canadian provinces while incorporating in offshore jurisdictions. State-level regulators could issue orders but had limited ability to coordinate enforcement or to compel offshore entities. The resulting patchwork of warnings — each individually credible but collectively diffuse — was manageable for a platform that had learned to publicly dismiss enforcement as bias. Multi-jurisdictional coordination, when it came, arrived through the federal SEC complaint in August 2024, fourteen months after the scheme had already collapsed.
04
Yield-claim opacity behind managed-account framing
Unlike simpler Ponzi schemes that promise fixed daily or weekly returns, NovaTech's managed-account framing gave it plausible deniability on yield claims. Returns were variable and attributed to market trading — a framing that is harder to falsify than a stated fixed percentage, and that makes investor skepticism seem unreasonable. Dashboard displays showing account balances and purported trade histories served as the primary evidence of legitimacy, and there was no independent mechanism for investors to verify that those numbers corresponded to actual positions.
05
Post-collapse jurisdictional refuge
The Petions' apparent exit from the United States following or preceding the SEC complaint is the final phase of the jurisdictional arbitrage that had protected NovaTech throughout its operation. Civil enforcement proceedings can proceed without the defendants' presence, but disgorgement and monetary penalties against defendants who are abroad and uncooperative are, as a practical matter, largely uncollectable. The $650 million extracted from investors has not been recovered, and the gap between the SEC's ability to prosecute and its ability to actually return funds to victims reflects an enforcement architecture that has not kept pace with operators' mobility.

Aftermath

As of mid-2026, Eddy and Cynthia Petion have not been criminally charged in the United States and their location has not been publicly confirmed by any enforcement authority. The SEC's civil case in the Southern District of Florida is ongoing. The six promoters named in the SEC complaint — Zizi, Dunbar, Corbett, Sampson, Garofano, and Hadley — face civil disgorgement proceedings; no criminal charges against them have been publicly filed at the federal level.

State-level civil penalties totalling over $112 million have been assessed across Maryland and Ontario, Canada, but enforcement of these penalties against parties who may be abroad remains limited in practice. The 200,000 investors who lost funds to NovaTech — a population concentrated in Haitian-American and Caribbean-diaspora communities — have received no restitution. Victim advocacy groups filed petitions and civil class actions in multiple jurisdictions, but the absence of recoverable assets under any enforcement authority's control means that recovery, if any, remains years away.

The NovaTech case is notable in the U.S. enforcement record as one of the largest MLM-adjacent crypto fraud actions against a scheme that successfully insulated itself from regulatory intervention for multiple years through community capture, identity-based marketing, and offshore corporate structure. It adds to a pattern of diaspora-targeting schemes — alongside EminiFX and IcomTech — in which ethnic and immigrant communities in the United States sustained disproportionate losses because social trust architecture was deliberately weaponised as the scheme's primary distribution mechanism.

Lessons

  1. Multi-level marketing structures applied to investment programs — where recruiters earn commissions for bringing in new investors — are a structural fraud marker regardless of whether the underlying trading claims are credible; the commission structure itself misaligns promoter incentives with investor protection.
  2. State-level cease-and-desist orders and provincial fraud warnings against an investment platform, even if not individually decisive, represent corroborated evidence of fraud that investors and community leaders should treat as disqualifying, not as disputes to be weighed against platform marketing.
  3. Managed-account programs that cannot provide independently audited trade records showing actual positions, counterparties, and executed prices — rather than platform-generated dashboard displays — should be treated as presenting no verifiable evidence of the trading they claim.
  4. Community trust, however well-founded in other contexts, cannot substitute for financial due diligence; the fact that a trusted pastor, family member, or community leader has invested in a platform is evidence of that person's trust, not of the platform's legitimacy.
  5. Offshore incorporation paired with operators who are willing to exit the jurisdiction where victims are concentrated is a structural precondition for the worst-case outcome: enforcement can proceed, but recovery cannot; investors who lose money to such schemes should treat those funds as irrecoverable from the day withdrawals stop.

References