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Cryptocurrency Firms Sued Over Pyramid Scheme; More than 3,500 Long Islanders were affected
New York State Attorney General Letitia James has sued a pair of cryptocurrency trading firms, accusing them of running illegal pyramid schemes that have defrauded hundreds of thousands of investors, including more than 3,500 on Long Island, for over $1 billion in cryptocurrency.
According to the lawsuit, filed Thursday in New York County Supreme Court, 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 sent through messaging portals on their websites.
WHAT TO KNOW
- The attorney general sues a pair of cryptocurrency companies accused of running a pyramid scheme.
- According to the lawsuit, more more than 11,000 New Yorkers were defrauded of tens of millions of dollars.
- The companies would have realized religious appeals to victims, promising high profits 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 it closed. Both were created by Cynthia and Eddy Petion, a married couple who entered the world of cryptocurrencies 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 former mortgage loan officer.
James’ lawsuit alleges that Petion’s companies defrauded approximately 11,000 people on Long Island, New York City and Westchester, Rockland and Orange counties by promising investors generous returns and recruiting bonuses that never materialized. They targeted minority communities, particularly 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 deliver on promises made to investors. Pezioni later founded NovoTech, again promising weekly returns on investments that actually came from new investors’ deposits. NovoTech collapsed last May, freezing the cryptocurrency accounts of tens of thousands of its customers.
Overall, the lawsuit claims, people who invested in 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’ office. Last month, the attorney general won $2 billion for investors who had been defrauded by Genesis Global Capital, and last year James secured more than $50 million in settlements, judgments and other enforcement actions against companies cryptocurrency fraudsters.