The Securities and Exchange Commission (SEC) on Monday charged Cynthia and Eddy Petion, along with their company, NovaTech Ltd., for operating a fraudulent scheme that raised more than $650 million in crypto assets from more than 200,000 investors worldwide.

The SEC also charged Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley for their roles in promoting NovaTech to investors.

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. They lured investors by claiming NovaTech would invest their funds on crypto asset and foreign exchange markets.

Cynthia Petion assured investors that their investments would be safe and promised that “[i]n this program, you are in profit from day one, because again you have access to that capital.” In reality, NovaTech used the majority of investor funds to make payments to existing investors and to pay commissions to promoters, using only a fraction of investor funds for trading.

The complaint further alleges that the Petions siphoned millions of dollars of investor assets for themselves. When NovaTech ultimately collapsed, most investors were not able to withdraw their investments, resulting in substantial losses, according to the complaint.

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 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 Section 17(a) of the Securities Act of 1933 (“Securities Act”), and charges NovaTech, the Petions, Dunbar, Corbett, and Sampson with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder.

The complaint also charges all defendants with violating the securities-registration provisions of Sections 5(a) and 5(c) of the Securities Act, and charges Zizi, Dunbar, Corbett, Sampson, Garofano, and Hadley with violating the broker-registration provisions of Section 15(a) of the Exchange Act. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties.

Without admitting or denying the allegations, Zizi agreed to partially settle the SEC’s charges by consenting to a $100,000 civil penalty and to be permanently enjoined from future violations of the charged provisions, with the amount of other monetary remedies to be determined at a later date.

The partial settlement is subject to court approval.