New York files lawsuit over $1 billion crypto scams targeting immigrants

New York Attorney General Letitia James has filed a lawsuit against NovaTech Ltd and AWS Mining Pty Ltd, accusing them of defrauding immigrant communities, particularly Haitians, out of over $1 billion. The suit alleges that these companies lured investors with promises of high returns, leveraging religious faith to gain trust. Instead of using the funds for legitimate trading, the majority was funneled into pyramid and Ponzi schemes by paying existing investors with funds collected from new ones. 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 failed to generate sufficient returns to pay these promised profits and bonuses, leading to its collapse in 2019 and causing millions of dollars in losses. Following AWS Mining’s collapse, Cynthia and Eddy Petion launched NovaTech, continuing to lure investors with promises of high returns and recruitment bonuses. They targeted minority communities, particularly Haitians, using prayer groups and WhatsApp chats, often advertising in Creole and using religious messages. James said Cynthia Petion branded herself ‘Reverend CEO’ and told investors that NovaTech was ‘God’s vision’, but privately called herself the ‘Zookeeper’ and belittled her investors as a ‘cult’ where ‘they just agree with everything you say.’

NovaTech falsely marketed itself as a registered hedge fund broker, misrepresented its licensing status in the US, and advertised high trading profits. Despite market conditions, NovaTech claimed to pay weekly trading profits, but these were fabricated, with payments coming from new investors’ funds. NovaTech collapsed in May 2023, leaving tens of thousands of investors unable to withdraw their cryptocurrency. Investigation by the Office of the Attorney General (OAG) found that from 2019 to 2023, investors deposited over a billion dollars, but less than $26 million was actually traded. The lawsuit seeks restitution, civil penalties, and a ban on their participation in the securities industry.

Why does it matter?

The following case sheds light on the susceptibility of immigrant communities to financial scams, particularly within the relatively unregulated cryptocurrency sector. James said in a statement that they’re ‘seeing the real dangers of unregulated cryptocurrency platforms with schemes like these.’  By exploiting religious faith and community trust, these fraudulent schemes inflict severe financial harm, often devastating victims’ life savings. The lawsuit seeks to recover the lost funds and hold fraudulent actors accountable, highlighting the need for robust consumer protections and the necessity of enforcing regulations to safeguard vulnerable populations.