NY Attorney General Sues Firms for $1 Billion Crypto Fraud

New York Attorney General Letitia James has initiated a significant legal crackdown on two firms accused of running a billion-dollar pyramid scheme. The lawsuit targets AWS Mining and NovaTech, alleging they defrauded over 11,000 residents, mainly from the Haitian community.

Fraud Allegations: AWS Mining and NovaTech Under Scrutiny for Misleading Investment Promises

AWS Mining and NovaTech are accused of promising high returns through supposed crypto mining and trading activities. AWS Mining guaranteed a 200% return on investments but collapsed in April 2019. Following this, NovaTech claimed to be a crypto and foreign exchange trading platform, attracting over $1 billion in deposits from August 2019 to April 2023. However, only $26 million was actually traded.

Pyramid and Ponzi Schemes: AWS Mining and NovaTech Accused of Exploiting Cultural Ties and Faith for Fraudulent Gains

The complaint describes both firms as pyramid schemes that used new recruits’ money to pay earlier investors. NovaTech also operated as a Ponzi scheme, redistributing supposed trading profits from other investors' funds. The firms exploited cultural and linguistic ties, particularly targeting Haitian investors by marketing in Creole and presenting the schemes as opportunities for financial freedom.

The firms preyed on vulnerable communities, leveraging trust and religious faith to lure victims. Promoters, including Cynthia and Eddy Petion, marketed these schemes as pathways to financial independence. In June 2022, the Petions sold their Florida house and fled to Panama, allegedly transferring tens of millions in cryptocurrency from NovaTech.

Attorney General Cracks Down: Efforts to Combat Predatory Crypto Scams and Seek Justice for Victims

Attorney General James emphasizes the predatory nature of these scams, highlighting how they targeted individuals least able to afford the losses. Her office aims to recover the lost funds and hold the perpetrators accountable. The ongoing investigation represents a broader effort to clamp down on fraudulent practices in the crypto market.

The Attorney General's office encourages affected individuals to report their experiences. This crackdown aims to bring justice to the victims and deter fraudulent practices in the rapidly evolving crypto industry.

New York's Attorney General sues AWS Mining and NovaTech for defrauding over 11,000 residents in a $1 billion pyramid scheme, pledging to recover funds and hold perpetrators accountable.