2024

motion

Ponzi

James

<p>New York Attorney General Letitia James has moved to recover more than $1.3 billion connected to the NovaTech crypto and forex trading scheme, asking a court to require NovaTech’s founders, Cynthia and Eddy Petion, and related entities to pay $1.37 billion. The request includes the return of roughly $1.13 billion in alleged investor funds plus $232.5 million in interest, according to a court filing submitted Thursday.</p>
<p>The lawsuit’s procedural path has been swift. In August 2025, the court found the Petions and affiliated companies liable by default after they did not respond to the claims. The new motion focuses on the amount the court should order and expands the effort to recover additional funds tied to an earlier collapsed scheme.</p>
<h2 id="key-takeaways">Key takeaways</h2>
<ul>
 <li>The New York Attorney General is seeking $1.37 billion from NovaTech’s founders and related companies, including $1.13 billion in returned funds and $232.5 million in interest.</li>
 <li>The liability finding stems from an August 2025 default judgment after Cynthia and Eddy Petion failed to respond to the lawsuit.</li>
 <li>The filing alleges investors deposited about $1.16 billion into NovaTech between August 2019 and May 2023, but only about $26 million was deposited with trading provider B2Broker.</li>
 <li>The AG’s motion also seeks approximately $6.15 million, including interest, tied to AWS Mining, which collapsed in 2019.</li>
 <li>According to the AG, more than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and AWS Mining, with recruitment efforts aimed at immigrant communities.</li>
</ul>
<h2 id="what-the-ag-is-asking-the-court-to-order">What the AG is asking the court to order</h2>
<p>In the Thursday filing, New York’s top prosecutor argues for a large monetary judgment tied to the alleged Ponzi scheme. As outlined by the AG, the amount requested is $1.37 billion in total damages—comprised of approximately $1.13 billion in investor funds and $232.5 million in interest.</p>
<p>The filing also describes the mechanism of the alleged fraud: investors placed money into NovaTech accounts, and the AG claims that only a small fraction of those deposits was actually used for trading activity. Specifically, the court motion states that from August 2019 through May 2023, investors deposited about $1.16 billion into NovaTech’s crypto wallets, while only about $26 million was deposited with the platform’s trading provider, B2Broker, for execution.</p>
<h2 id="allegations-of-investor-losses-and-recruitment-tactics">Allegations of investor losses and recruitment tactics</h2>
<p>The AG’s broader complaint, filed in June 2024 (as earlier coverage by <a rel="noopener noreferrer nofollow" href="https://sovrn.co/1h8llaz">Cointelegraph</a> noted in relation to licensing and misrepresentation claims), described a strategy aimed at building trust and expanding recruitment through community-based channels. According to the AG’s account, promoters targeted Haitian and other immigrant communities using prayer groups, social media, and WhatsApp.</p>
<p>The complaint alleges that the scheme encouraged participation through promises of high returns and recruitment bonuses. As the AG’s office later stated, more than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and an earlier crypto mining scheme called AWS Mining.</p>
<p>NovaTech itself collapsed in 2023, leaving large numbers of investors unable to withdraw funds. AWS Mining had already collapsed years earlier, in 2019, before NovaTech’s 2019–2023 deposit window cited in the new filing.</p>
<h2 id="default-liability-and-the-parallel-case-over-aws-mining">Default liability and the parallel case over AWS Mining</h2>
<p>One of the most consequential developments in the NovaTech matter is the default ruling. In August 2025, the court held the Petions and related companies liable by default after they did not answer the lawsuit. With that liability already established, the focus shifts to how much money the court should require the defendants to pay.</p>
<p>The Thursday motion also extends beyond NovaTech. It seeks about $6.15 million, including interest, tied to AWS Mining. That scheme collapsed in 2019, and the AG’s filings describe it as part of a broader pattern of alleged crypto-related fraud affecting New Yorkers.</p>
<h2 id="settlements-from-recruiters-and-what-victims-may-receive">Settlements from recruiters and what victims may receive</h2>
<p>Alongside the effort to secure a large judgment against the founders and affiliated entities, the AG’s office reported separate settlements involving four individuals who recruited investors into NovaTech. Those agreements, according to the AG, require nearly $6 million in payments intended to benefit victims.</p>
<p><a rel="noopener noreferrer nofollow" href="https://sovrn.co/1h8llaz">Cointelegraph</a> previously sought comment from the New York Attorney General’s Office about how any recovered money would be distributed to victims and what enforcement steps might follow the judgment, but did not receive a response by the time of publication.</p>
<p>For investors and victims watching the case, the key question is not only whether a judgment is entered, but how collectible the amounts are in practice—particularly given that the defendants did not participate in the litigation and that the alleged scheme involved complex flows of funds through crypto wallets and exchanges.</p>
<blockquote>
 <p>In the Thursday filing, the AG cites investor deposits into NovaTech wallets and describes limited movement of funds into trading activity via B2Broker.</p>
</blockquote>
<h2 id="why-this-update-matters-for-crypto-enforcement">Why this update matters for crypto enforcement</h2>
<p>This latest motion underscores how state prosecutors are still working to convert fraud allegations into concrete recoveries, even when defendants fail to defend themselves in court. The detailed accounting—such as the comparison between total deposits into NovaTech wallets and the smaller amount said to have been routed to trading—helps anchor the AG’s request for damages and may strengthen the likelihood of an enforceable order.</p>
<p>At the same time, the case illustrates a familiar enforcement tension in crypto fraud: large nominal judgments can be difficult to realize if assets are dispersed, unavailable, or already depleted. The settlements reported by the AG, plus the default liability finding, indicate an ongoing push to compensate victims—while the next phase will likely center on whether and how courts and prosecutors can track, recover, and distribute funds at scale.</p>
<p>Going forward, readers should watch for the court’s response to the AG’s monetary request and any subsequent enforcement steps—especially how the state plans to handle victim distribution and asset recovery after the default judgment and parallel claims tied to AWS Mining.</p>
<p>This article was originally published as <a href="https://www.cryptobreaking.com/ny-ag-pursues-1-37b/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">NY AG Pursues $1.37B From NovaTech Founders Over Alleged Ponzi</a> on <a href="https://www.cryptobreaking.com/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">Crypto Breaking News</a> – your trusted source for crypto news, Bitcoin news, and blockchain updates.</p>

NY AG Pursues $1.37B From NovaTech Founders Over Alleged Ponzi

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