Brent Kovar, a 58-year-old Las Vegas resident, has been indicted on multiple federal charges for allegedly running a $24 million cryptocurrency-related Ponzi scheme through his company, Profit Connect. A grand jury issued the indictment, which includes charges of wire fraud, mail fraud, and money laundering.
False Promises and Misleading Claims
Between late 2017 and July 2021, Kovar allegedly defrauded over 400 investors by promising fixed annual returns of 15% to 30%, along with a “100% money-back guarantee.” He reportedly claimed that Profit Connect utilized artificial intelligence-powered supercomputers for cryptocurrency mining and transaction verification.
To make his scheme appear legitimate, Kovar used various promotional tactics, including a website, YouTube videos, and PowerPoint presentations. These materials aimed to convince investors that their money was being used for advanced trading strategies when, in reality, it was not.
Funds Misused for Personal Gain
Instead of investing the funds as promised, Kovar allegedly redirected investor money for personal expenses. According to the indictment, he used the funds to buy gifts for employees, purchase a house for himself, and repay earlier investors to maintain the illusion of a profitable operation.
If convicted on all charges, Kovar faces a maximum prison sentence of 330 years and fines of up to $4.5 million.
This case highlights the ongoing risks in the cryptocurrency space, particularly investment schemes that promise unrealistically high returns. Investors should remain cautious, conduct thorough research, and be wary of opportunities that sound too good to be true. Regulatory authorities continue to warn against Ponzi schemes that leverage buzzwords like artificial intelligence and blockchain to lure unsuspecting victims.
