NEW YORK – New York Attorney General Letitia James today sued cryptocurrency trading company NovaTechFx (NovaTech), its founders Cynthia and Eddy Petion, and cryptocurrency mining company AWS Mining Pty Ltd. (AWS Mining), for engaging in illegal pyramid schemes that defrauded hundreds of thousands of investors, including over 11,000 New Yorkers, of over a billion dollars’ worth of cryptocurrency. The lawsuit alleges that the companies targeted immigrant communities, particularly Haitian New Yorkers, in prayer groups and through social media and WhatsApp group chats with fraudulent promises of high returns on investments, but never actually made the promised profits. An investigation by the Office of the Attorney General (OAG) found that from 2019 to 2023, investors deposited over one billion dollars’ worth of cryptocurrency in NovaTech but only a fraction, less than $26 million, was actually traded on NovaTech’s cryptocurrency trading platform. Attorney General James seeks to ban AWS Mining, NovaTech, and its founders from doing business in New York and to secure disgorgement and damages.
“Thousands of New Yorkers werefalselypromised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie,” saidAttorney General James. “These cryptocurrency companiestargeted immigrant and religious communities with promises offinancial freedom but instead stole their money and drained their life savings. We are seeing the real dangers of unregulated cryptocurrency platformswith schemes like these, but New Yorkers can rest assured that we will use the tools at our disposal to crack down on crypto fraudsters."
More than 11,000 New Yorkers from New York City, Westchester, Long Island, and Rockland and Orange counties invested in NovaTech and AWS Mining and lost tens of millions of dollars. The lawsuit alleges that AWS Mining was a fraudulent scheme that claimed to generate high returns for investors by mining cryptocurrency, the process by which specialized computers verify transactions in cryptocurrency and generate new cryptocurrency. AWS Mining and its promoters, Cynthia and Eddy Petion, James Corbett, Martin Zizi, and Frantz Ciceron, promised investors 15 to 20 percent monthly returns, 200 percent returns on investments within 15 months, and bonuses for recruiting new investors. However, the company did not generate enough returns to pay the promised monthly profits and recruitment bonuses and eventually collapsed in 2019, causing millions of dollars in losses to investors.
After the collapse of AWS Mining, Cynthia and Eddy Petion started their own cryptocurrency company, NovaTech, and relied on recruiting new investors with promises of high returns and generous recruitment bonuses. They targeted minority communities, Haitians in particular, in prayer groups and WhatsApp group chats with advertisements in Creole, and religious messages that appealed to their faith. They falsely marketed NovaTech as a registered hedge fund broker, misrepresented that NovaTech was licensed to trade cryptocurrency in the U.S., advertised high profits from trading of approximately two to four percent per week, promoted recruitment bonuses, and promised that investors could withdraw their funds and profits at any time.
From August 2019 through April 2023, investors deposited over one billion dollars’ worth of cryptocurrency with NovaTech. However, only less than $26 million was ever traded on NovaTech’s trading platform. The lawsuit alleges that throughout the entirety of the scheme, regardless of market conditions, NovaTech announced that it paid investors weekly trading profits. However, the weekly profits were made up and the payments came from other investors’ money. NovaTech collapsed in May 2023, and tens of thousands of investors were unable to withdraw their cryptocurrency.
Through her action, Attorney General James seeks to stop AWS Mining, NovaTech, and its founders and promoters fromengaging in any business related to securities or commodities in New York. Attorney General James is also seeking disgorgement and damages.
“These unscrupulous companies preyed on vulnerable New Yorkers, exploiting their trust and dreams for financial security,” said Assemblymember Clyde Vanel. “While cryptocurrency and blockchain technology have the potential to improve financial inclusion and close the wealth gap, the tragic reality is that bad actors continue to misuse these systems for personal gain, at the expense of the public. I commend Attorney General James for her relentless pursuit of justice and her continued effort to ensure that New York is a place where the public can feel confident and secure when investing their hard-earned money.”
“Attorney General James's decisive action against NovaTechFx and AWS Mining is a significant step in protecting New Yorkers from fraudulent cryptocurrency schemes, which preyed on vulnerable individuals by specifically targeting Haitian and other minority communities,”said New York City Council Member Farah N. Louis.“These schemes abused the hopes and trust of our community members, promising high returns and exploiting their faith. By taking this stand, the Attorney General is ensuring that New York addresses the severe harms that such scams inflict on our families, and I applaud this crucial work to protect all New Yorkers from such financial abuse.”
"Most Haitians in the Hudson Valley have walked weeks, months through the jungles of Central American countries to come to America looking for a better future for themselves and their family members,” said Renold Julien, Executive Director, Konbit Neg Lakay, the Haitian/American Community Center of Rockland County; President, Rockland County Haiti Relief. “Some have even been forced out of Haiti due to violence, they didn't come to America to be taken advantage of. I thank Attorney General James for taking this action to protect all New Yorkers. Konbit Neg Lakay is looking for full restitution."
Attorney General James has been a nationwide leader in the effort to protect investors and rein in the cryptocurrency industry. Last month, Attorney General James secured$2 billion for defrauded victims from the cryptocurrency company Genesis Global Capital.In December 2023, Attorney General Jamessecured more than $22 million from KuCoin, one of the largest cryptocurrency trading platforms, for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange. In May 2023, Attorney General Jamessecured $4.3 million from Coin Cafefor failing to register as a commodity broker-dealer and defrauding investors. In January 2023, Attorney General James and a multistate coalitionrecovered $24 million from the cryptocurrency platform Nexofor operating illegally. Attorney General James alsosued the former CEO of Celsius for defrauding investorsand concealing the company’s dire financial condition.
This matter is being handled by Assistant Attorney General Lauren McDonough and Senior Enforcement Counsel Tanya Trakht, with assistance from Principal Accountant Shalendra Ramadhin, Legal Assistants Natalya Fadeyeva and Lital Rush, and Virtual Assets Analyst Nathan Frankovitz, all of the Investor Protection Bureau, and Detective Investigator Brian Metz of the Investigations Division and Office Assistant Carine Lepinasse of the Consumer Frauds Bureau. The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim and is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.
