New York Attorney General Letitia James is suing the two companies and their promoters over an alleged cryptocurrency pyramid scheme that defrauded Haitian investors out of more than $1 billion.
In a complaint filed Thursday, NYAG alleged that defendants Cynthia Petion and her husband Eddy Petion promoted the scheme to defraud thousands of investors worldwide, including at least 11,000 New Yorkers.
AWS Mining, the first cryptocurrency mining investment scheme that promised 200% guaranteed returns, collapsed in April 2019. This was followed by a second large-scale fraud, NovaTech, claiming to be a cryptocurrency and forex trading platform. According to the filing, investors deposited more than $1 billion in cryptocurrency with NovaTech between August 2019 and April 2023, but only $26 million was traded on the platform.
James described each as a pyramid scheme in which promoters who invested in the platform would recruit others to do the same, earning cryptocurrency in return. NovaTech has also been described as a Ponzi scheme in which investors were promised profits through cryptocurrency trading but were paid out of other investors’ cryptocurrency assets.
The complaint alleges that the defendants engaged in affinity fraud targeting Haitian investors, promoting the scheme to investors in Creole, exploiting the victims’ religious beliefs, and promoting the scheme to those who could least afford it. claimed. By advertising the plan as a means to “financial freedom.”
According to the complaint, the defendants secretly sold their Florida home in June 2022, fled to Panama, and reportedly transferred tens of millions of dollars worth of cryptocurrency from Novatech. This plan soon began to unravel.
Three Britons indicted over $2 million Evolved Apes NFT rug pull
Also Thursday, the U.S. Department of Justice said three Britons had been indicted on charges of wire fraud and conspiracy to commit money laundering.
Damian Williams, United States Attorney for the Southern District of New York, and Federal Bureau of Investigation New York Field Assistant Director James Smith announced the unsealing of the indictment against Mohamed-Amin Atcha. Rilaz Waleedh and Daood Hassan.
The charges relate to allegations designed to scam victims into purchasing NFTs from Evolved Apes, a 2021 Ethereum-based collection worth more than $2 million at the time. Developers advertise their digital projects, raise funds from buyers, and then abandon them. Keep projects moving and funded.
“Defendants engaged in fraud to drive up prices for digital works of art through false promises about video game development,” U.S. Attorney Williams said in a statement. “They say they took investor money, didn’t develop the game, and kept the profits. Digital art may be new, but old rules still apply. It is illegal to make false promises for money. NFT fraud is not a game and those responsible will be held accountable.”
FBI Assistant Director Smith added, “Treating customers without delivering on promises not only reflects low business integrity, but also violates the buyer’s implicit trust in the seller when purchasing a product.” . “The FBI remains committed to pursuing those who commit fraud out of a selfish desire for quick profits.”
The charge carries a maximum sentence of 20 years in prison.
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.