New York AG Sues Crypto Firms, Alleging $1 Billion Ponzi Scheme Targeting Haitian Community

New York AG Sues Crypto Firms, Alleging $1 Billion Ponzi Scheme Targeting Haitian Community

New York Attorney General Letitia James has filed a lawsuit claiming that hundreds of thousands of people lost over $1 billion due to two intertwined crypto firms. The lawsuit names NovaTech, a cryptocurrency trading company, its founders Cynthia and Eddy Petion, the now-defunct cryptocurrency mining company AWS Mining, and associated individuals and companies as defendants.

The lawsuit asserts that over 11,000 New York state residents, particularly from the New York Haitian community, were defrauded out of tens of millions of dollars by investing in NovaTech. It alleges that NovaTech operated as a Ponzi scheme, exploiting religious appeals to attract customers.

NovaTech is also accused of misrepresenting its licensing and registration status. The company was registered in St. Vincent and the Grenadines until the Financial Services Authority of that country revoked its registration in January 2023. The company subsequently collapsed in May 2023.

Previous Allegations of Fraudulent Activity

Before founding NovaTech, the Petions were among the founders of AWS Mining, which ceased operations in 2019. Allegedly, AWS Mining was also a Ponzi scheme that failed to generate the promised returns.

The lawsuit claims that over $1 billion in cryptocurrency was deposited into the company between its founding in 2019 and 2023, but only $26 million was traded. Attorney General James is seeking disgorgement, damages, and a ban on AWS Mining, NovaTech, and the Petions from doing business in New York. In a statement, James said:

“We are witnessing the real dangers of unregulated cryptocurrency platforms with schemes like these, but New Yorkers can rest assured that we will utilize every tool at our disposal to crack down on crypto fraudsters.”

Additional Potential Fraudulent Connections

At the time of writing, the NovaTech website remains active. On the site, Cynthia Petion claims that the company’s funds were lost due to a data breach and that efforts are underway to recover them. According to materials available on X, the company began claiming it was hacked in May 2023.

A company in South Africa called NovaTech, which used the same logo as the Petions’ company and displayed Cynthia Petion’s picture on its Facebook page, was active in 2022 and 2023.

In 2018, the Texas State Securities Board issued a cease-and-desist order against AWS Mining, accusing it of operating similarly to the Petions’ company, although the Petions were not mentioned in that action.