Coinspeaker New York Sues Crypto Firms for $1B Fraud Targeting Immigrant Communities
New York Attorney General Letitia James has taken legal action against two crypto companies and their promoters. She accuses them of running a $1 billion scam that targeted the religious faith of Haitian and other immigrant communities, according to Reuters.
The lawsuit, filed on June 6, 2024, in a Manhattan state court, claims years of deception. James states that investors, enticed by promises of guaranteed weekly returns, invested over $1 billion in NovaTech Ltd over almost four years before it collapsed in May 2023. Only $26 million of the funds were used for legitimate trading.
The lawsuit also describes AWS Mining Pty Ltd in a similar light. James alleges that this company falsely promised investors a threefold return on investment within 15 months through cryptocurrency mining. This scheme, which fell apart in 2019, depended on the complex process of verifying crypto transactions and generating new coins.
Alleged Cult Tactics Used by ‘Reverend CEO’
The lawsuit highlights the manipulative tactics the defendants allegedly used. Victims were targeted through prayer groups, social media platforms, and WhatsApp communication, sometimes with messages in Creole, a language widely spoken in Haitian communities.
A total of 12 individuals are named as defendants, including the husband-and-wife team of Cynthia and Eddy Petion, co-founders of NovaTech. According to the lawsuit, the Petions are currently believed to be residing in Panama.
James’ investigation revealed a disturbing duality in Cynthia Petion’s persona. Publicly, she presented herself as the “Reverend CEO”, portraying NovaTech as divinely inspired. Privately, she allegedly called herself the “Zookeeper” and cynically referred to her investors as a “cult” who blindly followed her every word.
Efforts to reach Petions, NovaTech, AWS Mining, and their legal representatives for comment were unsuccessful at the time of publication.
Pyramid Schemes and Broken Promises
The lawsuit claims that both operations were classic pyramid schemes, which depend on recruiting new investors to pay returns to earlier ones. James also claims that NovaTech was a Ponzi scheme, paying old investors with deposits from new ones.
“These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings. […] We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these,” said James.
The lawsuit aims to get back the stolen funds for the victims, impose heavy fines on the defendants, and ban them from the securities industry permanently. This legal action clearly shows that New York will not allow the exploitation of vulnerable communities through fraudulent crypto schemes.
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New York Sues Crypto Firms for $1B Fraud Targeting Immigrant Communities
