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Key Takeaways
- Kovar was convicted on 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering, facing a statutory maximum of 280 years at his Nov. 30 sentencing
- Prosecutors said Kovar’s company, Profit Connect, promised fixed 20% to 30% annual returns from an AI supercomputer that never delivered as claimed
- The case traces back to a 2021 SEC fraud complaint alleging Kovar and his mother raised $12 million from at least 277 investors before the scheme grew to $24 million
A federal jury convicted Las Vegas businessman Brent Kovar on 15 criminal counts for operating a cryptocurrency Ponzi scheme that defrauded more than 400 investors of $24 million, the U.S. Attorney’s Office for the District of Nevada said Monday. Kovar faces a statutory maximum sentence of up to 280 years in prison when he is sentenced Nov. 30.
Jury Returns Guilty Verdict After Nine-Day Trial
Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering following a nine-day trial. The 280-year figure represents the statutory maximum penalty across all counts combined, not a sentence prosecutors have requested or one a judge has indicated it will impose.
Sentencing is scheduled for Nov. 30. The scheduled date marks the next formal step in the case; no sentence has been determined.
Case Traces Back to a 2021 SEC Fraud Complaint
Kovar’s case first drew public attention in July 2021, when the U.S. Securities and Exchange Commission charged him and his mother, Joy Kovar, with fraudulently raising $12 million from at least 277 investors.
Monday’s announcement addresses the criminal conviction of Brent Kovar only; the U.S. Attorney’s Office statement did not address the outcome of any case involving Joy Kovar.
The SEC’s original complaint alleged the pair told investors their company, Profit Connect, invested in foreign exchange, stocks and other assets to diversify income beyond its stated core business of blockchain mining.
Prosecutors said Kovar operated Profit Connect out of Las Vegas from late 2017 to July 2021, representing the company as holding hundreds of millions of dollars in cryptocurrency reserves and offering a full money-back guarantee.
Prosecutors Say Company Promised Fixed Returns From an AI Supercomputer
According to the SEC’s allegations, Kovar and his mother marketed a supercomputer with artificial intelligence capabilities that they claimed could generate fixed annual returns of 20% to 30%, compounded monthly. Prosecutors said the promised technology did not deliver those returns as represented.
Instead, according to the allegations underlying the case, funds were transferred to Joy Kovar’s personal bank account and used to make Ponzi-style payments to earlier investors, a structure in which new investor funds are used to pay obligations owed to earlier investors rather than being deployed into the investments the company claimed.
Prosecutors said Kovar also used investor money to buy gifts for employees and to purchase a house for himself.
FBI Says Investors Believed They Were Funding Genuine Technology
Christopher S. Delzotto, special agent in charge of the FBI’s Las Vegas Field Office, said investors believed they were part of a legitimate technological breakthrough.
“It was merely a deception crafted by the falsehoods and trickery of Mr. Kovar.”
Delzotto’s comment was part of a broader statement in which he said victims in the case believed they were participating in a genuine advancement in computing technology, only to have those beliefs exploited.
What Comes Next in the Case
Kovar’s sentencing on Nov. 30 will determine what portion of the 280-year statutory maximum a judge actually imposes. Federal sentencing guidelines typically result in penalties well below statutory maximums, particularly for white-collar fraud cases, though the final sentence will depend on factors a court has not yet addressed publicly.
The case adds to a series of federal prosecutions targeting cryptocurrency-linked fraud schemes that combine claims of proprietary technology with promises of fixed, above-market investment returns.
