- The New York Attorney General has taken legal action against companies accused of orchestrating a billion-dollar crypto scam.
- The lawsuit highlights the exploitation of over 11,000 investors, primarily targeting a vulnerable community.
- “This lawsuit reveals a flagrant breach of trust, where entire communities were deceived by promises of extraordinary returns,” said Letitia James, NY Attorney General.
New York Attorney General targets major crypto fraud, seeking justice for thousands of investors misled by fraudulent schemes.
Legal Measures Against Billion-Dollar Crypto Scheme
New York Attorney General Letitia James has initiated a lawsuit against AWS Mining and NovaTech, accusing them of a massive crypto scam. The firms, along with their promoters Cynthia and Eddy Petion, are accused of defrauding investors out of more than $1 billion, with the primary victims being of Haitian descent.
Exposing the Fraudulent Promises
The lawsuit states that AWS Mining enticed investors with guarantees of a 200% return via crypto mining, but the scheme collapsed in April 2019. Following this, NovaTech took over, posing as a crypto and forex trading platform, and collected over $1 billion in cryptocurrency investments from August 2019 to April 2023. However, only $26 million was actually traded, indicating clear fraudulent intentions.
Targeting Vulnerable Communities
The Attorney General’s filings detail how these schemes exploited community ties and trust, focusing primarily on Haitian investors through affinity fraud. Promoters used Creole language advertisements, coupling financial advice with cultural and religious appeals to gain trust and lure in victims.
The Structure of the Scam
Both AWS Mining and NovaTech operated as pyramid schemes, with NovaTech evolving into a Ponzi scheme. The promised trading profits were, in reality, funds from new investors being redistributed to pay earlier investors, a trademark of illegal financial scams.
Escape and Seizure
According to the lawsuit, in June 2022, Cynthia and Eddy Petion sold their Florida residence and transferred millions of dollars in cryptocurrency to Panama, indicating their awareness of the scheme’s impending exposure. The complaint highlights this move as a key instance of the fraudulent nature of their operations.
Commitment to Justice
Attorney General Letitia James has vowed to pursue legal actions to recoup the lost funds and seek justice for the defrauded investors. Her office aims to tackle fraudulent practices in the crypto sector head-on, ensuring that such exploitation does not go unchecked.
Community Support and Continual Investigation
The Attorney General’s office encourages all affected individuals to report their experiences to aid the ongoing investigation. The crackdown on AWS Mining and NovaTech sends a clear message against the impunity of fraudulent operators in the crypto market, reinforcing the commitment to investor protection.
Conclusion
The lawsuit filed by NY Attorney General Letitia James against AWS Mining and NovaTech highlights a significant effort to combat fraud in the cryptocurrency sector. As investigations continue, this legal action represents a critical step towards safeguarding investors and curbing deceptive practices in the rapidly evolving digital financial landscape.
