New York AG seeks $1.37B from NovaTech founders over Ponzi scheme
New York Attorney General Letitia James is seeking $1.37 billion from NovaTech founders Cynthia and Eddy Petion for allegedly operating a crypto and forex Ponzi scheme that defrauded over 11,000 New Yorkers.
Intelligence analysis by Gemini 2.5 Flash
The New York AG has requested a court order for NovaTech's founders to pay $1.37 billion after a default judgment found them liable for a crypto and forex Ponzi scheme. The scheme, which also involved an earlier operation called AWS Mining, targeted immigrant communities and promised high returns, ultimately leaving tens of thousands of investors unable to withdraw funds.
Imagine a couple promised people they could make their money grow super fast by trading digital coins, like magic internet money. But instead of really trading, they mostly just used new people's money to pay off older people, like a trick. Now, the grown-up police in New York want them to pay back over a billion dollars to all the people they tricked.
Analysis
NovaTech Founders
Cynthia and Eddy Petion, the founders of NovaTech, have been found liable by default in a lawsuit brought by New York Attorney General Letitia James. They failed to respond to the legal action, leading to the court's decision in August 2025. This liability stems from their alleged operation of a crypto and forex trading platform that functioned as a Ponzi scheme.
The lawsuit claims that the Petions' companies defrauded over 11,000 New Yorkers, causing tens of millions of dollars in losses. The scheme reportedly targeted vulnerable immigrant communities, using prayer groups, social media, and WhatsApp to lure investors with promises of high returns and recruitment bonuses. This predatory approach underscores the deceptive tactics often employed in such fraudulent operations.
Between August 2019 and May 2023, investors allegedly deposited approximately $1.16 billion into NovaTech’s crypto wallets. However, only a small fraction, about $26 million, was reportedly deposited with the platform’s trading provider, B2Broker, for actual trading activities. This significant disparity between deposits and trading capital is a hallmark of a Ponzi scheme, where new investor funds are used to pay off earlier investors rather than generating legitimate profits.
$1.37 Billion
New York Attorney General Letitia James is seeking a court order for the NovaTech founders and their associated companies to pay a total of $1.37 billion. This substantial sum includes approximately $1.13 billion in restitution for investor funds that were lost. The AG's office is also requesting an additional $232.5 million in interest, reflecting the financial damages incurred by the victims over time.
In addition to the main judgment against the Petions, four individuals who actively promoted and recruited investors into NovaTech have agreed to separate settlements. These settlements amount to nearly $6 million and are intended to directly benefit the victims of the scheme. This dual approach aims to recover funds from both the scheme's architects and its key facilitators.
The pursuit of such a large sum underscores the scale of the alleged fraud and the AG's commitment to recovering assets for the defrauded investors. While the enforcement and distribution of these recovered funds remain to be seen, as Cointelegraph sought comment on this aspect, the legal action itself sends a strong message about accountability in the crypto space.
AWS Mining
Before the collapse of NovaTech in 2023, the founders were also allegedly involved in an earlier crypto mining scheme known as AWS Mining. This prior operation collapsed in 2019, indicating a pattern of fraudulent activity preceding the NovaTech scheme. The New York AG's complaint specifically includes AWS Mining in its legal action, seeking an additional $6.15 million, including interest, related to this earlier fraud.
The inclusion of AWS Mining in the lawsuit suggests a broader history of alleged financial misconduct by Cynthia and Eddy Petion. This continuity across different schemes reinforces the narrative of a deliberate and sustained effort to defraud investors through various crypto-related ventures. The collapse of both platforms left tens of thousands of investors unable to access their funds, highlighting the devastating impact on individuals.
The AG's comprehensive lawsuit, filed in June 2024, targets NovaTech, AWS Mining, and other associated companies, aiming to dismantle the entire network of alleged fraudulent operations. This multi-faceted legal approach is crucial for addressing complex financial crimes that often involve multiple entities and evolve over time, ensuring that all aspects of the alleged misconduct are brought to justice.
Key points
- New York AG Letitia James is seeking $1.37 billion from NovaTech founders Cynthia and Eddy Petion.
- The founders were found liable by default for operating a crypto and forex Ponzi scheme.
- Over 11,000 New Yorkers lost tens of millions of dollars through NovaTech and an earlier scheme, AWS Mining.
- Promoters allegedly targeted Haitian and other immigrant communities with promises of high returns.
- Only $26 million of $1.16 billion deposited was reportedly used for actual trading.
The successful legal action by the New York AG could lead to significant restitution for the thousands of victims, potentially recovering a substantial portion of their lost investments. This outcome would also reinforce regulatory efforts to protect consumers from fraudulent crypto schemes, deterring future bad actors.
Despite the default judgment, enforcing the $1.37 billion order and distributing recovered funds to victims could be a lengthy and complex process, with no guarantee that all or even most of the lost money will be returned. The founders might have already moved assets, making full recovery challenging.
