New York AG Sues Two Crypto Companies Over Alleged $1B Fraud

New York Attorney General Letitia James has filed a lawsuit against NovaTech Ltd. and AWS Mining Pty Ltd, alleging that the founders and promoters of the cryptocurrency companies defrauded investors of over $1 billion.

According to the filing, the defendants Cynthia Petion and her husband, Eddy Petion, with their associates allegedly defrauded thousands of investors globally, including more than 11,000 New York state residents who lost tens of millions of dollars by investing in NovaTech.

NovaTech Labeled a Ponzi Scheme 

NovaTech, a firm which claimed to be a crypto and foreign exchange trading platform is accused of being a Ponzi scheme. Per the filing, the company attracted members of the New York Haitian community and other immigrant communities using their religious beliefs and promising a weekly return on investment. The couple marketed the scheme to those who could least afford it by advertising the scheme as a means of “financial freedom.”

Despite investors depositing over $1 billion worth of cryptocurrency with NovaTech from August 2019 through April 2023, only 26 million of the funds were reportedly used for trading, with the rest unaccounted for. Cynthia Petion, who branded herself as the Reverend CEO, allegedly called investors a cult and belittled them privately.

In June 2022, the defendants secretly sold their house in Florida and fled to Panama, according to the complaint, allegedly transferring tens of millions of dollars worth of cryptocurrency out of NovaTech. The scheme began to unravel shortly after.

Earlier Fraudulent Scheme

Before founding NovaTech, the couple were among the founders of AWS Mining, which collapsed in 2019. The defendants allegedly promised that investors would reap 15-20% monthly returns and 200% returns on investment in 13-15 months. As a reward to participants, the company awarded 10% of the amounts invested by their downlines, additional bonuses and ceremonies titles thereby encouraging more recruitment. 

The Attorney General addressed specific issues in the lawsuit such as the high risks of fraud associated with the use of unregulated cryptocurrency platforms. She said that these cryptocurrency companies learned that immigrant and religious communities sell everything for their dreams and drain their savings. 

“We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these, but New Yorkers can rest assured that we will use the tools at our disposal to crack down on crypto fraudsters,” she added.