Las Vegas business owner convicted in $24 million crypto Ponzi scheme

Federal jury convicts Brent Kovar of fraud and money laundering

A Las Vegas business owner, Brent Kovar, has been convicted by a federal jury for running a $24 million Ponzi scheme involving cryptocurrency. Kovar faces a possible maximum sentence of 280 years in prison after being found guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering.

The scheme operated through Kovar’s company, Profit Connect, from late 2017 to July 2021. The company claimed to use artificial intelligence (AI) software on a supercomputer to mine cryptocurrency—a process where computers solve complex problems to earn digital coins—and verify other crypto transactions.

Kovar promised investors fixed annual returns between 15% and 30%, along with a 100% money-back guarantee. He also falsely claimed that Profit Connect held hundreds of millions of dollars in crypto reserves.

How the scheme worked and what prosecutors found

• Profit Connect was not profitable and had no real crypto reserves.
• Kovar used investor funds to pay for personal expenses, including a house for himself and gifts for employees.
• Earlier investors were repaid with money from new investors, a classic Ponzi scheme tactic.
• The scheme defrauded at least 400 investors out of $24 million.
• Kovar’s sentencing is scheduled for November 30, though the 280-year maximum is a statutory figure and unlikely to be fully imposed.

What the U.S. Justice Department confirmed

The U.S. Justice Department stated that Kovar’s company had no legitimate way to deliver the promised returns or the money-back guarantee. Instead, investor funds were used to sustain the scheme and cover personal expenses.

What happens next for Kovar

Kovar’s sentencing is set for November 30. While the combined maximum sentence for his convictions is 280 years, the actual sentence will be determined by a federal judge.

Why this case matters for crypto investors

This case highlights the risks of investment schemes that promise high returns with little risk. Ponzi schemes, where returns are paid to earlier investors using funds from new investors rather than legitimate profits, are illegal and often collapse when new money stops flowing in. Investors should be cautious of companies that guarantee returns or claim to use advanced technology like AI without verifiable proof.

Sources

• Cointelegraph
• U.S. Justice Department