SEC Charges NovaTech With Crypto Fraud Exceeding $650m

Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano and Marsha Hadley were also charged for allegedly promoting NovaTech. According to the financial watchdog, these parties raised more than $650m in virtual assets from over 200,000 investors across the globe by operating a multi-level marketing (MLM) and crypto asset investment programme between 2019 and 2023.

The SEC claims that they duped people into investing in crypto and forex markets by promising security and “profits from day one”. Based on the regulator’s accusations, NovaTech and its owners used invested funds to pay existing investors and promoter commissions.

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In its press release, the SEC claims that the Petions also “siphoned millions of dollars of investor assets for themselves”. When NovaTech collapsed in May 2023, the majority of investors were unable to withdraw any of their investment funds and suffered significant losses.

The regulator said that Zizi, Dunbar, Corbett, Sampson, Garofano and Hadley received “substantial commissions” as NovaTech’s lead promoters. Eric Werner, the director of the SEC’s Fort Worth regional office, 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.

The SEC filed its complaint in the US District Court for the Southern District of Florida.