NY Attorney General Sues 2 Firms For $1B Fraud

In a significant crackdown on crypto scams, New York Attorney General Letitia James has filed a lawsuit against two firms for orchestrating a billion-dollar pyramid scheme. According to the latest filing, the alleged firms and their promoters have leveraged the scheme defrauding more than 11,000 New York residents, primarily targeting the Haitian community.

NY Attorney General Takes Legal Action Against Massive Crypto Scam

New York’s Attorney General Letitia James has launched a lawsuit against two firms, AWS Mining and NovaTech, accusing them of running a large-scale crypto scam. According to the lawsuit, the firms and their promoters, including Cynthia and Eddy Petion, swindled over $1 billion from the market participants, primarily of Haitian descent.

Notably, one of the fraudulent operations promised high returns through supposed crypto mining and trading activities. AWS Mining, the first scheme, guaranteed a 200% return on investments but collapsed in April 2019.

Following this, NovaTech emerged, another firm sued in a crypto scam, claiming to be a crypto and foreign exchange trading platform. Investors deposited more than $1 billion in cryptocurrency into NovaTech from August 2019 to April 2023. However, a mere $26 million was actually traded on the platform, according to the filing.

Meanwhile, the Attorney General’s complaint describes both firms as pyramid schemes. They recruited investors with promises of guaranteed returns, and new recruits’ money was used to pay earlier investors. NovaTech also operated as a Ponzi scheme, where supposed trading profits were merely redistributed from other investors’ funds.

In these crypto scam developments, the firms have preyed on vulnerable communities, using affinity fraud to exploit cultural and linguistic ties. Promoters targeted Haitian investors by marketing in Creole and presenting the schemes as opportunities for financial freedom. Notably, this strategy involved leveraging the community’s trust and religious faith to lure in more victims.

Also Read: Crypto Mailing Vendors List Hacked, Tether CEO Lauds Caution

A Closer Look Into The Details

According to the crypto scam lawsuit, the Petions sold their Florida house and fled to Panama in June 2022. During their escape, they allegedly transferred tens of millions of dollars in cryptocurrency from NovaTech. Notably, the complaint states that the fraudulent nature of NovaTech’s operations became apparent shortly thereafter.

Meanwhile, the NYAG’s complaint underscores the predatory nature of the crypto scams, emphasizing how they were marketed to individuals who could least afford the losses. By advertising guaranteed returns and leveraging community ties, they managed to amass significant funds before the scheme unraveled.

However, Attorney General Letitia James has pledged to continue pursuing justice for the defrauded investors in the crypto scam. Her office’s investigation into the fraudulent activities aims to recover the lost funds and hold the perpetrators accountable. Besides, the legal action also represents a broader effort to clamp down on fraudulent practices in the rapidly evolving crypto market.

As the investigation progresses, the Attorney General’s office continues to encourage any affected individuals to come forward and report their experiences. The crackdown on AWS Mining and NovaTech aims to bring justice to the victims and send a clear message against fraudulent practices in the crypto industry.

Also Read:

Wormhole (W) Price Jumps 12% Soon After It Launches Governance Staking, What’s Ahead?

Where’s The Popular Solana Meme Coins Standing Today? Hike Or Drop

Bitcoin’s L2 Merlin Chain Unveil Merlin Phantom For Bitmap, There’s A Catch

Rupam, a seasoned professional with 3 years in the financial market, has honed his skills as a meticulous research analyst and insightful journalist. He finds joy in exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond conventional boundaries. His contributions encompass breaking stories, delving into AI-related developments, providing real-time crypto market updates, and presenting insightful economic news. Rupam’s journey is marked by a passion for unraveling the intricacies of finance and delivering impactful stories that resonate with a diverse audience.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.