New York State Attorney General Letitia James is suing a pair of cryptocurrency trading companies, accusing them of running illegal pyramid schemes that defrauded hundreds of thousands of investors — including more than 3,500 from Long Island — out of more than $1 billion in cryptocurrency.
According to the lawsuit, filed Thursday with the Supreme Court of New York County, James wants to ban the companies, AWS Mining Pty Ltd. and NovaTechFx, and its founders from operating in the state. The attorney general also wants them to pay damages and return any assets obtained in connection with the scheme.
“These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings,” James said in a statement.
Neither company responded to requests for comment submitted through message portals on their websites.
WHAT TO KNOW
- The attorney general is suing a pair of cryptocurrency firms for allegedly operating a pyramid scheme.
- According to the lawsuit, more than 11,000 New Yorkers were defrauded out of tens of millions of dollars.
- The companies allegedly made religious appeals to victims, promising high returns that never materialized.
According to the attorney general’s complaint, AWS Mining was based in Australia and NovoTech was registered in St. Vincent and the Grenadines before they folded. Both were created by Cynthia and Eddy Petion, a married couple who entered the crypto space with an eclectic background.
Cynthia Petion described herself in an April interview with the website Enterpreneur as a professional mentor and evangelist pastor who holds weekly services in Florida. And according to a 2021 interview with wellness website Thrive Global, Eddy Petion is an Army veteran and a former mortgage loan officer.
James’ lawsuit alleges that the Petion’s companies defrauded about 11,000 people from Long Island, New York City and Westchester, Rockland and Orange counties, promising investors generous returns and recruitment bonuses that never materialized. They targeted minority communities, especially Haitian immigrants, seeking them out in prayer groups and WhatsApp group chats, appealing to them with religious messages and advertisements written in Creole.
According to the lawsuit, AWS Mining collapsed in 2019 after failing to make good on its promises to investors. The Petions started NovoTech afterward, again promising weekly investment returns that actually came from deposits from new investors. NovoTech collapsed last May, freezing the cryptocurrency accounts of tens of thousands of its clients.
Altogether, the lawsuit alleges, people who invested in the Petion’s trading services lost tens of millions of dollars.
A hearing date has not yet been set in the case.
The lawsuit is the latest in high-profile enforcement actions against cryptocurrency firms by James’s office. Last month, the attorney general won $2 billion for investors who were defrauded by Genesis Global Capital, and last year James secured more than $50 million in settlements, judgments and other enforcement actions against fraudulent cryptocurrency firms.