A US regulator has charged a Las Vegas man with allegedly defrauding over 400 investors out of $24 million through a misleading AI-driven crypto mining scheme, falsely promising lucrative fixed returns and a 100% money-back guarantee.
“Mr. Kovar allegedly stole victims’ hard-earned money by making false representations regarding his investment company, including misleading some victims to believe their investments were backed by the FDIC,” a statement published by the US Attorney’s Office for the District of Nevada.
Kovar promised a high rate of return and security to investors
Brent Kovar allegedly deceived investors from late 2017 to July 2021, claiming that his company, Profit Connect — which claims to be an AI company that mines crypto and verifies crypto transactions — offered a fixed annual return of 15% to 30% and a 100% money-back guarantee. However, he was reportedly using the funds to fund his lavish lifestyle.
“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.”
Kovar used a website, a YouTube video, and PowerPoint presentations to persuade customers to invest in his firm. He is facing 12 counts of wire fraud, three counts of mail fraud, and three counts of money laundering. He faces a maximum statutory penalty of 330 years in prison and a fine of up to $4.5 million if convicted.
FBI crackdown on crypto scams saved victims around $285M
It comes amid a growing number of crypto-linked Ponzi schemes.
On Jan. 27, Antonia Perez Hernandez, a promoter of the crypto Ponzi scheme Forcount who pleaded guilty to conspiracy to commit wire fraud, was sentenced to more than two years in prison.
Related: Crypto scams set for biggest year ever due to AI: Chainalysis
Just a few months earlier, in October 2024, an 86-year-old former California attorney was sentenced to five years probation and ordered to pay almost $14 million after admitting to carrying out a multimillion-dollar crypto Ponzi scheme.
Meanwhile, the FBI’s “Operation Level Up” said it saved potential crypto fraud victims roughly $285 million between January 2024 and January 2025.
Magazine: Korea to lift corporate crypto ban, beware crypto mining HDs: Asia Express
