Lawsuit Filed Against NovaTechFx and AWS Mining
New York Attorney General (NYAG) Letitia James has filed a lawsuit against crypto trading firms NovaTechFx and AWS Mining Pty Ltd., along with their founders Cynthia and Eddy Petion, for allegedly running illegal pyramid schemes. The schemes reportedly defrauded over 11,000 individuals, leading to losses exceeding $1 billion.
Allegations of Targeting Immigrant Communities
The press release from the NYAG’s office claims that NovaTech and AWS Mining targeted immigrant communities, especially Haitian New Yorkers, using prayer groups, social media, and WhatsApp to make fraudulent promises of high investment returns. The firms allegedly exploited these communities by promising financial freedom and high returns on investments, which never materialized.
Investigation Findings
An investigation by the Office of the Attorney General uncovered that from 2019 to 2023, investors deposited over $1 billion in crypto with NovaTech. However, less than $26 million was actually traded. The lawsuit alleges that the vast majority of the funds were never invested as promised.
“Thousands of New Yorkers were falsely promised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie. These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings.” – Letitia James
AWS Mining’s Collapse and NovaTech’s Deception
The complaint details that AWS Mining claimed to generate high returns through crypto mining but failed to deliver the promised profits, collapsing in 2019. Following this, the Petions founded NovaTech, which also allegedly recruited new investors with similar promises of high returns.
NovaTech marketed itself as a registered hedge fund broker licensed to trade crypto in the U.S. However, the lawsuit alleges that the company misrepresented its operations and that weekly profits were fabricated, with payments to investors coming from other investors’ money. NovaTech eventually collapsed in May 2023, leaving tens of thousands of investors unable to withdraw their crypto funds.
Legal Actions Sought
Accusing the Petions of violating the Martin Act, Attorney General James seeks to ban AWS Mining, NovaTech, and their founders from conducting business in New York. The lawsuit also aims to secure disgorgement and damages for the affected investors, seeking justice for those who lost their life savings in the alleged schemes.
