Nevada jury convicts man of $24M Ponzi scheme tied to fake AI crypto mining operation
Brent Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering for defrauding 400 investors of over $24 million through his company Profit Connect. He promised returns of 15% to 30% APR with a 100% money-back guarantee, but the operation had no actual cryptocurrency holdings and paid early investors with new funds. Kovar faces up to 280 years in prison, with sentencing scheduled for November 30.
The scheme ran from 2017 through 2021, overlapping with Bitcoin's first major rally, when the cryptocurrency peaked above $19,000 in December 2017. Kovar capitalized on the buzz around AI and digital assets to make Profit Connect appear innovative, though the company held no cryptocurrency reserves and simply recycled new investor deposits to pay earlier backers.
The case mirrors other crypto frauds, including BitConnect's collapse, which cost retail investors $2 billion, and a Chinese scheme that converted $6 billion into 61,000 Bitcoin. Kovar's sentencing is scheduled for November 30, with prosecutors seeking up to 280 years, though whether victims recover their funds remains uncertain.
This conviction could heighten public wariness toward cryptocurrency investment pitches, especially those promising guaranteed high returns or leveraging AI buzzwords. Retail investors, often less equipped to vet complex technical claims, may face lasting financial harm from such schemes. The verdict may also encourage regulators to scrutinize AI-adjacent investment products more closely, though it could inadvertently cast suspicion on legitimate crypto ventures, potentially slowing adoption and innovation in