LAS VEGAS (KLAS) — A man faces federal charges for allegedly running a cryptocurrency Ponzi scheme where he made about $24 million, prosecutors said Friday.
A grand jury indicted Brent Kovar, 58, on charges including wire fraud, mail fraud and money laundering connected to Profit Connect, a company prosecutors said “used artificial intelligence software on a supercomputer to mine cryptocurrency and verify cryptocurrency transactions.”
Kovar promised hundreds of investors that they would receive up to 30% growth and a “100% money-back guarantee,” documents said. “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.”
Prosecutors allege Kovar obtained the money from about 400 investigators from 2017 to 2021. They also said he leased office space and a warehouse, “[misrepresenting] that the computers were functioning and making substantial profits from mining cryptocurrency and verifying cryptocurrency transactions,” documents said.
In 2021, the Securities and Exchange Commission filed a complaint in federal court against Kovar and his mother, the 8 News Now Investigators previously reported. In that complaint, lawyers for the SEC said the company, identified at that time as Profit Connect Wealth Services, raised more than $12 million from nearly 300 investors.
In that case, prosecutors said the Kovars allegedly spent $440,000 on a home purchased in January 2021 and $1.6 million on several credit cards, including one $23,500 charge during one trip to Costco, documents said.
Federal court records show a judge has ordered several settlement agreements. There was no hearing scheduled in that case as of Friday.
Kovar pleaded not guilty Thursday in the criminal case, documents said. A judge released him on bond with conditions, records said. A trial was scheduled for April.
Should Kovar go to trial in the criminal case and a jury finds him guilty, he could face the rest of his life in prison and a fine of not more than $4.5 million, prosecutors said.
