A federal jury in Las Vegas has convicted Brent Kovar, a local business owner, of orchestrating a large-scale crypto Ponzi scheme that defrauded over 400 investors of $24 million.
Conviction and charges
The US Justice Department announced Monday that Kovar was found guilty on multiple charges, including 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. The verdict followed a nine-day trial in federal court.
According to the Justice Department, Kovar faces a statutory maximum sentence of 280 years in prison. The sentence reflects the combined maximum penalties for all convictions. A federal judge will determine his actual sentence at a hearing scheduled for November 30.
Details of the scheme
Kovar operated a company called Profit Connect from late 2017 through July 2021. Profit Connect promoted itself as a high-tech investment firm using artificial intelligence software and supercomputers to mine cryptocurrencies and verify blockchain transactions.
ETH
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AAPLHe assured investors that the company could generate fixed annual returns between 15% and 30%, and guaranteed that clients would receive 100% of their money back. Additionally, Kovar claimed the company held hundreds of millions of dollars in cryptocurrency reserves to support these promises.
Prosecutors stated that these claims were false. Profit Connect had no actual profits, possessed no such crypto reserves, and did not possess any legitimate business operations that could have generated the advertised returns or fulfilled its guarantees.
Kovar used funds from new investors to keep Profit Connect operating, purchase personal items—including a house—and reward employees with gifts, while making payments to earlier investors and depicting them as legitimate company earnings.
Court records show that the fraudulent activity took place over several years, with Kovar relying on convincing promotional materials and personal assurances to perpetuate the scam.
Profit Connect ceased operations after the scheme was uncovered by authorities. Law enforcement intervened following multiple complaints from defrauded investors and subsequent investigation.
Mini dictionary: Ponzi scheme — A type of financial fraud where returns to early investors are paid using funds from new investors, rather than from legitimate profits, eventually collapsing when new funds run out.
Sentencing and the path forward
Brent Kovar is set to return to court for sentencing on November 30, after which a federal judge will decide the duration of his prison term.
Legal experts note that while the statutory maximum sentence is 280 years, federal sentencing guidelines and the judge’s ruling will determine the actual prison time Kovar receives.
The Justice Department continues to pursue similar crypto fraud cases as authorities work to protect investors and maintain market integrity.
