NY AG Seeks $1.37B From NovaTech Founders Over Alleged Crypto Pyramid Scheme

New York Attorney General Letitia James asked a state court on Oct. 22 to order the founders of collapsed crypto platform NovaTech to pay $1.37 billion — $1.13 billion in disgorgement plus $232.5 million in prejudgment interest — following an August 2025 default judgment that found Cynthia and Eddy Petion liable for a pyramid scheme that collected $1.16 billion in investor cryptocurrency. The couple has since fled the country.

New York's attorney general is putting a dollar figure on one of the largest crypto fraud cases in state history. On Oct. 22, Letitia James's office filed papers asking a court to order NovaTech founders Cynthia and Eddy Petion to pay nearly $1.37 billion in damages, disgorgement and interest, according to the attorney general's office. The request follows a default judgment entered in August 2025, after the Petions failed to respond to the lawsuit James filed against them in June 2024. Her office says the couple has since fled the country.

The filing breaks the request into two parts: about $1.13 billion in disgorgement of alleged illicit gains, and $232.5 million in prejudgment interest — a figure that puts the total ask at approximately $1.367 billion. The state also filed a separate request for about $6.15 million, including interest, tied to the Petions' earlier venture, the crypto mining scheme AWS Mining. The inquest process lets the court assign a dollar figure now that liability is settled; the defendants' absence doesn't stop the state from pursuing the award, but it sharply limits what the state can actually collect.

That is the central tension in this case, and the filing's own numbers make it plain. The state's investigators reconstructed NovaTech's money flows from CoinPayments transaction records, and the picture they paint is of a business where trading was a rounding error.

Where the $1.16 billion went

Investors deposited roughly $1.16 billion worth of cryptocurrency into NovaTech's wallets between August 2019 and May 2023, the filing says. Of that, NovaTech deposited just $25.99 million with B2Broker, the trading platform provider it used — 2.2% of total deposits, or about two cents of every dollar investors sent. Traders then lost about $18.19 million of that amount, roughly 70% of the only money that ever reached a trading account.

Compare that with what went to the founders: the filing alleges at least $134.5 million in withdrawals went to wallets belonging to Cynthia and Eddy Petion, with Cynthia authorizing the transfers. That is more than five times the $25.99 million that ever touched B2Broker. The state alleges NovaTech paid purported trading profits and recruitment bonuses with money from new investors rather than legitimate trading gains — the textbook definition of a Ponzi structure layered on top of a pyramid recruitment scheme.

The numbers also undercut the marketing. NovaTech falsely presented itself as a registered hedge fund broker licensed to trade cryptocurrency in the U.S., the attorney general's office says, and advertised weekly returns of 2% to 4% — a pace that compounds to roughly 180% to 670% a year. Investors were told they could withdraw funds and profits at any time. When NovaTech collapsed in May 2023, tens of thousands of investors were unable to withdraw their cryptocurrency.

A scheme built on trust networks

The case's other distinctive feature is how the money was gathered. Before NovaTech, the Petions were top U.S. promoters of AWS Mining, which promised monthly returns of 15% to 20% from crypto mining before collapsing in 2019. After that collapse, they launched NovaTech and recruited through the same trust networks: prayer groups, WhatsApp group chats and social media, with advertisements in Haitian Creole and religious messages that appealed to investors' faith, according to the attorney general's office.

"NovaTech and AWS Mining scammed thousands of vulnerable New Yorkers by telling them they were making a safe investment when in reality, they were victims of a pyramid scheme," James said in a statement. "These scammers targeted immigrant and religious communities with the promise of a better life but instead robbed them of their life savings."

More than 11,000 New Yorkers from New York City, Westchester, Long Island and Rockland and Orange counties invested across the two schemes and lost tens of millions of dollars, the office says. The victims were a subset of hundreds of thousands of investors worldwide who put money into NovaTech.

What the four promoters did — and paid

For crypto markets more broadly, the case is a reminder that enforcement risk now operates at institutional scale: the state's theory reaches back through CoinPayments records and on-chain tracing to reconstruct every dollar, and the inquest process lets it set awards without the defendants in the room. TECHi's crypto policy coverage has tracked how index providers and regulators are tightening the perimeter around crypto-adjacent assets, from record ETF outflows testing bitcoin's $80,000 support to new bank-issued tokens drawing regulatory scrutiny. NovaTech shows the other end of the spectrum: not market structure, but outright fraud — and the state's willingness to chase it across borders.

A five-year arc, from mining promises to a default judgment

The Oct. 22 filing is the latest turn in a case that stretches back seven years. The attorney general's account runs like this: AWS Mining and its promoters — including the Petions, who were among the scheme's top U.S. recruiters — promised investors 15% to 20% monthly returns and 200% back within 15 months, paid bonuses for recruiting new investors, and collapsed in 2019 after generating little or no real returns. Out of that wreckage, the Petions built NovaTech, which ran from August 2019 to April 2023 collecting crypto deposits before freezing withdrawals and collapsing in May 2023.

James sued in June 2024, alleging both operations were illegal pyramid schemes that defrauded hundreds of thousands of investors of more than $1 billion in crypto. Two months later, the SEC filed its own case, charging the Petions and others over what it called a $650 million fraud. The state case then went quiet in the way cases do when defendants vanish: the Petions never answered the lawsuit, and in August 2025 the court entered a default judgment against them — establishing liability and permanently barring them from the securities, commodities and cryptocurrency industries — while leaving the dollar amount for a later inquest. That inquest is what landed on Oct. 22.

What the four promoters did — and paid

The four settlements announced the same day show the enforcement strategy in miniature: pursue the people who can be reached. Martin Zizi, Frantz Ciceron, James Corbett and Ricardo Roy Sr. were among NovaTech's top promoters — the recruiters who brought new investors into the scheme through the same prayer-group and WhatsApp networks the founders used. They settled claims that they made false and misleading statements in the offer and sale of securities, acted as unregistered brokers and participated in an illegal pyramid scheme. Their payments — $2.9 million from Zizi, $2.05 million from Ciceron, $750,000 from Corbett and $275,861 from Roy — total $5,975,861, described by the office as nearly $6 million in disgorgement for the benefit of victims. Each also accepted a permanent ban from the securities, commodities and cryptocurrency industries.

Disgorgement is not distribution

It is worth being precise about what the $1.37 billion figure is and isn't. Disgorgement is designed to strip alleged illicit gains; prejudgment interest accounts for the time value of money between the conduct and the award. Neither is a payment already made, cash already held, or a final entered judgment. The inquest asks the court to fix the amount the Petions owe. Distribution — getting money to the more than 11,000 New Yorkers who lost tens of millions of dollars — is a separate, later question, and it depends on finding assets. With the founders outside U.S. jurisdiction and no records produced, the realistic near-term recovery for victims is the $5.98 million from the promoter settlements.

The per-victim math is sobering either way. If New Yorkers' losses were, say, $40 million across 11,000 investors — "tens of millions," as the office puts it — the average loss is roughly $3,600 per person, and the promoter money covers about 15 cents on that dollar. The $1.37 billion, by contrast, is a statewide disgorgement figure built on worldwide deposits, not a per-victim restitution schedule.

Why this case matters beyond NovaTech

The filing is the largest monetary ask the New York attorney general's office has attached to a crypto fraud case, and it arrives as part of a deliberate enforcement arc. In March 2025, Galaxy Digital agreed to a $200 million settlement over claims it fraudulently pumped Luna tokens. In April 2026, the office secured more than $5 million from the Uphold platform over a fraudulent investment scheme run through Cred LLC. The NovaTech inquest extends the same playbook — reconstruct the money on-chain, establish liability even in the defendants' absence, and set the number — to a case where the defendants are gone and the money mostly is too.

It also shows how far blockchain forensics has come as an enforcement tool. The state's figures don't come from NovaTech's books; they come from CoinPayments transaction records and wallet tracing — $1.16 billion in, $25.99 million to the trading desk, $134.5 million to founder-linked wallets. When a platform's own records are unavailable, the chain itself becomes the ledger. That is a precedent other defendants will notice.

What to watch

Three things decide whether this $1.37 billion becomes anything more than a headline. First, the court's inquest ruling: the judge must approve the disgorgement and interest figures, and could adjust them. Second, asset location: with the Petions outside the country, any recovery depends on tracing wallets and accounts the state can actually reach — the $134.5 million in founder-linked withdrawals is a starting map, not a seizure. Third, the parallel federal track: the SEC's August 2024 case against the Petions over the alleged $650 million fraud proceeds on its own timeline, and any federal recovery could interact with the state's claims. For the more than 11,000 New York victims, the near-term money is the $5.98 million in promoter settlements — real, earmarked, and a fraction of what they lost.