A Las Vegas businessman has been busted for running a Ponzi scheme using cryptocurrencies. According to authorities, the suspect took over $24 million from 400 investors, promising them a 30% fixed return.
Authorities also mentioned that he seduced investors using a 100% money-back guarantee. The suspect, Brent Kovar, was charged by a jury with wire fraud, money laundering, and mail fraud related to Profit Connect. According to authorities, he misrepresented his activities, renting an office space and telling them the computers were working and making a lot of money from 2017 to 2021.
Las Vegas businessman convicted in Ponzi scheme
According to court documents, Profit Connect did not carry out any of the listed services that it said it offered. “In reality, Kovar used investor money to operate Profit Connect, buy gifts for employees, buy a house for himself, and repay investors as if those repayments came from mining cryptocurrency and verifying cryptocurrency transactions,” the document said.
If Kovar is found guilty of the offenses, he may spend up to 330 years in prison, with a fine of $4.5 million. Kovar’s case started in 2021 after authorities filed a complaint against him and his mother, Joy Kovar. “Defendants promised investors that their money would be invested in securities, Bitcoin and other cryptocurrencies based on a recommendation made by an ‘artificial intelligence supercomputer’,” the complaint read.
“Profit Connect claims that its supercomputer consistently generates enormous returns, which in turn allows Profit Connect to guarantee investors returns of 20% to 30% per year with monthly compound interest […] However, Profit Connect is a fraud,” the complaint added.
Investigators mentioned that most of the funds were sent to Joy’s account, with 90% of the investors paid from money used to invest in the platform by other investors. The plan was conceived in 2018, with most investors encouraged to use their funds and recruit others to invest in the platform for bonuses. While Kovar is due to be sentenced, he pleaded not guilty in his first court appearance, with the judge moving the next court date to April.