A federal jury convicted Las Vegas business owner Brent C. Kovar on Monday for defrauding at least 400 investors of $24 million through a cryptocurrency Ponzi scheme, exposing him to a statutory maximum of 280 years in prison.
Kovar owned Profit Connect, a Las Vegas company that told investors it ran artificial intelligence software on a supercomputer to mine cryptocurrency and verify other cryptocurrency transactions. Jurors found that the operation earned no real profits and instead recycled investor money to sustain the appearance of a working business, capping a case that federal prosecutors built across a nine-day trial.
How Profit Connect Lured Its Investors
Kovar operated the business from late 2017 to July 2021 and marketed it as a profitable enterprise that paid a fixed return of 15% to 30% APR and carried a 100% money-back guarantee. He told investors the company held hundreds of millions of dollars in cryptocurrency reserves and assured some that their money was insured by the Federal Deposit Insurance Corporation. This AI-driven pitch echoes a $13 million fraud in which Vincent Anthony Mazzotta Jr. admitted his role in a scheme built around fake AI trading bots.
Prosecutors showed at trial that Kovar knew the company turned no profit, held no reserves, and had no legitimate way to pay the promised returns or honor the guarantee. He used incoming investor funds to operate the company, buy gifts for employees, purchase a house for himself, and repay earlier investors as though the payments came from mining and verifying cryptocurrency. Estonian nationals behind the HashFlare mining brand ran a comparable deception on a larger scale, pleading guilty to a $577 million scheme that showed customers falsified profit data on a web dashboard.
Investor Takeaway
The claim that funds were FDIC-insured was an outright fabrication, since FDIC insurance covers deposits at member banks and never cryptocurrency holdings or investment returns, making it a bright-line signal that any crypto product invoking it is misrepresenting the coverage.
The Verdict and What Comes Next
Jurors found Kovar guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. A federal district court judge will set any sentence after weighing the U.S. Sentencing Guidelines and other statutory factors, with sentencing scheduled for November 30, 2026.
First Assistant U.S. Attorney Sigal Chattah for the District of Nevada said the verdict reflected a commitment to pursuing bad actors who manipulate records to steal millions. David Lowe, Acting Special Agent in Charge of IRS Criminal Investigation’s San Francisco Field Office, said the fraud eroded trust in the financial system. Lowe added:
“Criminals who build operations on false guarantees, fabricated profits and nonexistent reserves … leave victims facing real financial harm. IRS-CI special agents and professional staff are well suited and will continue to follow the money and hold accountable those who exploit emerging technologies to commit fraud.”
The conviction adds to a wider enforcement push against crypto Ponzi operators, including a case in which U.S. authorities seized the domain of investment group BG Wealth Sharing and froze $41.5 million in digital assets tied to a suspected scheme with losses topping $150 million.
Investor Takeaway
The practical safeguard is verification over narrative, meaning confirm that returns come from disclosed, auditable activity rather than a proprietary black box, since every promise in this case that could not be independently checked turned out to be false.