In a landmark legal move, New York Attorney General Letitia James has filed a lawsuit against two cryptocurrency companies, accusing them and their promoters of defrauding hundreds of thousands of investors out of more than $1 billion. The lawsuit, filed on Thursday in a Manhattan state court, alleges that the companies preyed on the religious faith of people from Haitian and other immigrant communities.
The lawsuit targets NovaTech Ltd and AWS Mining Pty Ltd, which the Attorney General claims engaged in elaborate schemes to mislead investors. According to the lawsuit, NovaTech Ltd received over $1 billion from investors over nearly four years until its collapse in May 2023. Despite promises of weekly profits, only $26 million was reportedly used for trading.
AWS Mining Pty Ltd, which collapsed in 2019, is accused of falsely promising investors that it could triple their money within 15 months through cryptocurrency mining. The process involves using computers to verify transactions and generate new cryptocurrency.
The alleged fraudsters, including NovaTech co-founders Cynthia and Eddy Petion, are said to have exploited their victims through prayer groups, social media, and WhatsApp, often using the Creole language to gain trust. Cynthia Petion, who styled herself as “Reverend CEO,” claimed NovaTech was inspired by divine vision but privately referred to herself as the “Zookeeper” and dismissed her investors as a “cult” that blindly followed her directives.
Attorney General James described both companies as pyramid schemes, with NovaTech additionally operating as a Ponzi scheme. In such schemes, companies pay bonuses to recruit new investors, and in the case of Ponzi schemes, older investors are paid with the deposits from newer investors rather than from legitimate profits.
“These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings,” James said in a statement. “We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these.”
The lawsuit seeks restitution for the victims, civil damages, and a ban on the defendants from working in the securities industry. This case underscores the growing concerns over the risks posed by unregulated cryptocurrency platforms and highlights the need for vigilant oversight to protect vulnerable communities from financial exploitation.
The defendants, including the Petions who are allegedly now residing in Panama, could not be immediately reached for comment. The lawsuit represents a significant effort by the New York Attorney General’s office to crack down on fraudulent activities in the burgeoning cryptocurrency market, particularly those that exploit trust and community ties to deceive investors.