Las Vegas businessman Brent Kovar has been found guilty of running a crypto Ponzi scheme, defrauding at least 400 investors out of $24 million, the U.S. Attorney's Office for the District of Nevada announced Monday.
Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering following a nine-day trial. Sentencing is scheduled for Nov. 30, when Kovar faces a statutory maximum penalty of up to 280 years in prison.
Kovar’s case first made the headlines in July 2021, when the U.S. Securities and Exchange Commission (SEC) charged Kovar and his mother, Joy Kovar, with fraudulently raising $12 million from at least 277 investors.
The pair lured investors into their Ponzi scheme, saying their crypto business, Profit Connect, invested in forex, stocks and other assets "to diversify its income stream from the company's main income source of blockchain mining,” the SEC said.
The Kovars touted a supercomputer with artificial intelligence (AI) features capable of generating 20% to 30% fixed returns per year, compounded monthly. Instead, the SEC alleged, they transferred "millions of dollars to Joy Kovar's personal bank account" and made "Ponzi-like payments to other investors," according to the charges.
“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,” said Special Agent in Charge Christopher S. Delzotto for the Federal Bureau of Investigation (FBI) Las Vegas Field Office.
From late 2017 to July 2021, Kovar operated Profit Connect out of Las Vegas, representing the company as profitable with hundreds of millions of dollars in cryptocurrency reserves and a 100% money-back guarantee. He used investor money to buy gifts for employees and purchase a house for himself.