Crypto25 August, 20262 min read
Las Vegas Businessman Brent Kovar Convicted in $24 Million Crypto Ponzi Scheme
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Brent Kovar convicted of wire fraud, mail fraud and money laundering in $24M Ponzi. The scheme defrauded at least 400 investors claiming high fixed returns from AI crypto mining.
Kovar convicted in Nevada
A federal jury convicted Las Vegas businessman Brent Kovar of fraud and money laundering tied to a $24 million crypto Ponzi scheme, according to the U.S. Attorney’s Office for the District of Nevada.
Prosecutors said Kovar’s Profit Connect operation collected $24 million from at least 400 investors through false claims about cryptocurrency mining, investment returns and company reserves.
The scheme ran from late 2017 through July 2021, and prosecutors said Kovar presented Profit Connect as profitable while promising fixed annual returns of between 15% and 30% and a 100% money-back guarantee.
Prosecutors also said Kovar used investor money to operate the business, purchase gifts for employees and buy a house for himself, while repayments were presented as proceeds from cryptocurrency mining and transaction verification.
Kovar was found guilty after a nine-day trial on 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering, and he is scheduled to be sentenced on Nov. 30 with a statutory maximum of 280 years in prison.
Claims about AI mining
Prosecutors said Kovar owned Profit Connect from late 2017 through July 2021 and told investors the company used artificial intelligence software on a supercomputer to mine cryptocurrency and verify crypto transactions.
The U.S. Attorney’s Office for the District of Nevada said Profit Connect was not profitable and had no legitimate source of income capable of supporting the promised returns or the 100% money-back guarantee.
In a statement carried by KLAS 8, First Assistant U.S. Attorney Sigal Chattah said, "This verdict demonstrates our absolute commitment to aggressively pursuing bad actors who manipulate records to steal millions and ensuring they face full accountability in a court of law."
FBI Las Vegas Special Agent in Charge Christopher S. Delzotto said, "The victims in this case thought they were engaged in revolutionary technological advancement, but it was merely a deception crafted by the falsehoods and trickery of Mr. Kovar."
Broader enforcement and debate
The case drew on multiple agencies, with the U.S. Attorney’s Office for the District of Nevada saying IRS Criminal Investigation, FBI and the Federal Deposit Insurance Corporation’s Office of the Inspector General investigated the matter.
FDIC OIG Special Agent in Charge Ryan Korner said Kovar defrauded investors to enrich himself, adding that investigators would continue working with other agencies to pursue financial fraud cases.
In a separate discussion of crypto’s reputation, ABC News & Headlines quoted Ben McKenzie telling the US Senate, "In my opinion, the cryptocurrency industry represents the largest Ponzi scheme in history."
McKenzie also described his documentary as a 90-minute comedy about what he called "stupid" crypto, and he said he secured an interview with FTX founder Sam Bankman-Fried before the exchange’s collapse exposed an $11 billion hole in its accounts.