Las Vegas business owner found guilty of $24 million crypto ponzi scheme

The owner of a Las Vegas-based company was convicted for fraudulently obtaining $24 million from investors, federal officials said.

Brent C. Kovar, owner of Profit Connect, was found guilty by a federal jury for wire fraud, mail fraud and money laundering after he “falsely represented” that his company was profitable and used investor money to pay off other investors while buying gifts for employees and a house for himself, the U.S. Attorney’s Office for the District of Nevada said in a release Monday.

From late 2017 to July 2021, Kovar purported that Profit Connect used “artificial intelligence software on a super computer to mine cryptocurrency,” according to the release.

The release said Kovar told investors the company was profitable, returning a fixed rate of 15 to 30 percent to investors, along with offering a 100 percent money-back guarantee and was backed by hundreds of millions of dollars in cryptocurrency reserves.

“Kovar knew his company was not profitable, had no reserves, did not and could not pay the fixed rates of return to investors, and had no legitimate means for the money-back guarantee,” according to the release.

It said he used investor money to operate the business, buy gifts for employees, a house for himself, and to repay investors as if those repayments came from mining cryptocurrency and verifying cryptocurrency transactions.

In total, Kovar fraudulently obtained $24 million from at least 400 investors, prosecutors said.

Following a nine-day trial, Kovar was convicted on 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering. He faces a statutory maximum penalty of 280 years in prison, according to the release.

Kovar is scheduled to be sentenced Nov. 30.

“Today’s verdict reflects the seriousness of Brent Kovar’s scheme and the impact it had on hundreds of investors,” IRS Criminal Investigation’s San Francisco Field Office Acting Special Agent in Charge David Lowe said. “Criminals who build operations on false guarantees, fabricated profits and nonexistent reserves, erode trust in our financial system, and leave victims facing real financial harm.”