NY AG Letitia James Sues NovaTech and AWS Mining for $1 Billion Fraud Scheme
The New York Attorney General, Letitia James, has taken legal action against crypto trading firm NovaTech and now-defunct digital asset company AWS Mining, along with key promoters, for allegedly defrauding investors of $1 billion, as per court documents from the lawsuit filed on June 6.
Fraudulent Scheme Unveiled
From 2017 to 2019, AWS Mining, Cynthia and Eddy Petion, and their associates promoted a fraudulent scheme promising a 200% return on investment, which eventually collapsed in April 2019, leaving most investors empty-handed. The Petions then launched NovaTech, where only a fraction of the deposited $1 billion was traded.
- The lawsuit highlights the unsustainable nature of AWS Mining’s promises and the high returns it distributed.
- Most investors suffered significant losses when the scheme crumbled.
Targeting Vulnerable Investors
According to the lawsuit, the Petions specifically targeted Haitian investors who were financially vulnerable, promising them financial freedom through their fraudulent schemes. They capitalized on the community’s exclusion from traditional markets, preying on their faith and language to lure them into investing.
- Cynthia Petion went as far as portraying herself as a religious figure to gain the trust of investors.
- The lawsuit reveals disturbing messages from Petion likening investors to cult followers.
Escape and Closure
By 2022, the Petions had fled to Panama, with reports suggesting they evaded U.S. officials. NovaTech shut down in May 2023, with the Petions absconding with millions in recruitment payments and profits, leaving thousands of investors with substantial losses.
- Despite facing a $2 billion class-action lawsuit earlier in the year, criminal charges have not been brought against the perpetrators.
- The Petions have yet to respond publicly to the allegations.
Hot Take: Legal Battle Ensues
The legal battle against NovaTech, AWS Mining, and their promoters showcases the importance of regulatory oversight in the crypto space. Investors must exercise caution and due diligence before engaging in any investment opportunities, especially those offering unrealistic returns or guaranteeing profits.
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