Jury convicts Las Vegas man of operating $24M AI crypto mining Ponzi scheme that defrauded 400+ investors.
AI & Agents ·
A federal jury in Las Vegas has convicted Brent Kovar of operating a $24 million cryptocurrency scheme that affected at least 400 investors. Through his company Profit Connect, which operated from late 2017 to mid-2021, Kovar advertised yearly returns between 15% and 30%, claimed to back investments with hundreds of millions in crypto reserves, and assured participants their funds carried FDIC insurance. The jury found him guilty on 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering; sentencing is scheduled for November 30, with a statutory maximum penalty of 280 years.
Prosecutors established that Profit Connect was never genuinely profitable and held no reserves. Investor capital instead funded operational costs, employee gifts, a house purchased for Kovar, and payments to earlier investors disguised as mining proceeds. The scheme's scale emerged only in the criminal case: the SEC had halted the operation in 2021 and initially calculated losses at roughly half the convicted amount—approximately $12 million affecting at least 277 investors—and determined more than 90% of company income derived from new investor money rather than cryptocurrency activity.
Kovar's track record includes a 2009 civil injunction filed by the SEC against him and his father over a separate $12 million pump-and-dump scheme. Investment fraud remains the largest category of cryptocurrency crime reported to federal authorities, though the full scale of losses remains unclear due to underreporting.