● Covered by 1 source · 1 reportLow impact1 negative
Businessman convicted of $24 million crypto mining Ponzi scheme involving 'AI supercomputer'
Key points
- Businessman Brent Kovar convicted on 15 counts of fraud and money laundering.
- Defrauded over 400 investors of $24 million through Profit Connect.
- Scheme falsely claimed to use an AI supercomputer for crypto mining.
- Promised 15-30% APR and a 100% money-back guarantee.
Conviction for Multi-Million Dollar Fraud
A Nevada court has convicted Las Vegas businessman Brent Kovar on 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. Kovar defrauded over 400 investors, totaling more than $24 million, through his company Profit Connect.
The Profit Connect Scheme
Kovar presented Profit Connect as a cryptocurrency mining operation utilizing an "artificial intelligence supercomputer." Investors were promised fixed annual returns of 15% to 30% and a 100% money-back guarantee. However, investigations revealed that the company had no cryptocurrency holdings and was not generating profits from mining. Instead, returns to earlier investors were paid using money from new investors, characteristic of a Ponzi scheme.
Misuse of Investor Funds
The Department of Justice stated that Kovar used investor funds to operate Profit Connect, purchase gifts for employees, acquire a house for himself, and make repayments to investors, falsely representing these repayments as earnings from cryptocurrency mining. The scheme operated from 2017 to 2021, coinciding with a period of significant interest in Bitcoin and cryptocurrency investments.
Broader Context of Crypto Scams
This case is part of a larger trend of fraudulent schemes in the cryptocurrency sector. Previous incidents include the BitConnect Ponzi scheme, which cost retail investors $2 billion, and another scheme in China that defrauded victims of $6 billion. Such cases underscore the risks associated with unregulated investment platforms, especially those making unrealistic promises of high returns and leveraging emerging technology buzzwords like "AI."
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
A Las Vegas businessman was found guilty of wire fraud, mail fraud, and money laundering for operating a $24 million cryptocurrency mining Ponzi scheme. The scheme, named Profit Connect, falsely promised high returns and a money-back guarantee using an "AI supercomputer" for mining, but paid early investors with funds from new investors. This conviction highlights ongoing risks in unregulated crypto investment schemes, particularly those leveraging buzzwords like AI.