A federal jury in Las Vegas convicted businessman Brent Kovar on August 24 of orchestrating a $24 million cryptocurrency Ponzi scheme that defrauded at least 400 investors, a verdict that caps a five-year investigation into a company that promised outsized returns from artificial intelligence-powered mining operations that never existed.
The nine-day trial ended with guilty verdicts on 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering. Kovar, who operated the company Profit Connect from late 2017 through July 2021, now faces a statutory maximum of 280 years in prison. Sentencing is scheduled for November 30 before U.S. District Judge Jennifer A. Dorsey.
Prosecutors said Kovar marketed Profit Connect as a sophisticated operation using AI software running on a supercomputer to mine cryptocurrency and verify blockchain transactions. Investors were promised fixed annual returns of 15% to 30%, a full money-back guarantee, and were told the company held hundreds of millions of dollars in cryptocurrency reserves.
None of it was true. The company had no profits, no reserves, and no legitimate revenue source capable of supporting the advertised returns. Instead, Kovar used money from new investors to pay earlier ones, creating the illusion of mining proceeds while the underlying operation generated nothing. Funds also went toward running the business, buying gifts for employees, and purchasing a house for Kovar himself.
The FDIC claim
Kovar told investors their money was protected by the Federal Deposit Insurance Corporation, a claim the agency’s Office of Inspector General said was false. FDIC insurance covers deposits at insured banks, not investments in cryptocurrency ventures.
“Mr. Kovar defrauded investors to enrich himself, luring victims with false claims that his investment was insured by the FDIC,” said Ryan Korner, special agent in charge of the FDIC OIG’s San Francisco field office.
FBI Las Vegas Special Agent in Charge Christopher Delzotto said victims “thought they were engaged in revolutionary technological advancement” when the operation was “merely a deception crafted by the falsehoods and trickery of Mr. Kovar.” First Assistant U.S. Attorney Sigal Chattah added that “financial fraud undermines the foundational trust of our economic system.”
The investigation was conducted jointly by the FBI, IRS Criminal Investigation, and the FDIC OIG. Assistant U.S. Attorneys Joshua Brister and James Gaeta prosecuted the case.
A second act
Profit Connect was not Kovar’s first encounter with securities regulators. In 2009, the SEC charged him in a pump-and-dump scheme involving Sky Way Global, a company that claimed to possess broadcasting and anti-terrorism monitoring technology capable of tracking hijacked aircraft. That technology also did not exist.
The earlier case ended with a federal court permanently barring Kovar in 2010 from serving as an officer or director of any SEC-registered company, and from penny stock offerings for life. The bar had a critical gap: it applied only to SEC-registered issuers, and Profit Connect was privately held.
The SEC moved against Profit Connect in July 2021, securing an emergency asset freeze against the company, Kovar, and his mother, Joy Kovar, who was described as a control person. At that time, regulators said the operation had raised more than $12 million from at least 277 investors, with over 90% of incoming funds coming from individual contributions rather than business activities.
Court records showed that $1.2 million went into Joy Kovar’s personal bank account in ten equal transfers over less than two months, with an additional $1.7 million withdrawn through cash transactions, credit card payments and the purchase of a car. The February 2025 federal indictment named only Brent Kovar.
Regulators also said the company encouraged investors to withdraw funds from retirement accounts and home equity, and specifically targeted families saving for their children’s education.
The broader fraud landscape
The conviction lands amid a broader reckoning over crypto-adjacent fraud. TRM Labs estimated that the illegal crypto market attracted $158 billion in 2025, up nearly 145% from the previous year. Chainalysis calculated that crypto scams received at least $14 billion on-chain in 2025, a figure that could exceed $17 billion as more illicit addresses are identified.
Investment fraud remains the largest single category of crypto crime reported to the FBI, which logged $11.37 billion in losses for 2025, up 22% from the year before.
The use of artificial intelligence as a marketing veneer for fraudulent schemes has drawn increasing attention from international law enforcement. In March 2026, INTERPOL reported that AI-facilitated fraud schemes generated 4.5 times more revenue per case than those without such technology. The Financial Action Task Force separately warned that organized crime groups are exploiting regulatory gaps to move illegal profits through virtual assets.
These concerns are shaping institutional attitudes toward digital assets. A January 2026 survey of 351 institutional investors by Coinbase and EY-Parthenon found that 66% identified unclear regulations as their chief concern when considering crypto investments.
Kovar’s conviction follows several other high-profile prosecutions with mixed outcomes. Federal prosecutors have continued pursuing cases involving alleged conventional financial crimes tied to digital assets, including the Goliath Ventures case, where founder Christopher Alexander Delgado was arrested in February over an alleged $328 million Ponzi scheme.
Others have stalled. The Justice Department reportedly moved to dismiss charges against BitClub Network founder Matthew Goettsche despite allegations that the crypto mining operation defrauded investors of $722 million, a decision that followed a 2025 departmental policy directing prosecutors not to use criminal enforcement as a substitute for digital-asset regulation.
For the victims of Profit Connect, the conviction marks a step toward accountability, though restitution will be determined separately at sentencing. The scheme’s collapse five years ago left at least 400 investors holding claims against a company that never had the assets it promised.
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