New York Attorney General Sues Cryptocurrency Companies for Defrauding Investors
New York Attorney General Letitia James filed a lawsuit against two cryptocurrency companies and their promoters for defrauding investors out of more than $1 billion through a Ponzi scheme that targeted immigrant and religious communities.
Massive Fraud Targeting Immigrant and Religious Communities
New York Attorney General Letitia James filed a lawsuit against two cryptocurrency companies, NovaTech Ltd and AWS Mining Pty Ltd, and their promoters, alleging a massive fraud scheme that targeted immigrant and religious communities. The companies are accused of defrauding hundreds of thousands of victims out of more than $1 billion.
False Promises and Ponzi Schemes
According to the lawsuit, investors were lured with promises of weekly profits and tripling their investments within 15 months. However, the companies allegedly used only a small fraction of the invested funds for actual trading, while the rest was used to pay off earlier investors in a classic Ponzi scheme fashion.
Targeting Vulnerable Communities Through Social Media and Religious Groups
The defendants are accused of targeting vulnerable communities, including Haitian immigrants, through prayer groups, social media, and WhatsApp messages in Creole. NovaTech co-founder Cynthia Petion, who branded herself as "Reverend CEO," is accused of using religious language to gain investors' trust while privately belittling them.
Seeking Restitution, Damages, and Industry Ban
The lawsuit seeks restitution for the victims, civil damages, and a ban on the defendants from operating in the securities industry. Attorney General James emphasized the dangers of unregulated cryptocurrency platforms and the need to protect investors from such fraudulent schemes.
