A Las Vegas business owner has been convicted of running a $24 million cryptocurrency Ponzi scheme that defrauded at least 400 investors, according to the U.S. Department of Justice.
A federal jury found Brent C. Kovar guilty of 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering following a nine-day trial.
Kovar is scheduled to be sentenced on November 30, 2026, and faces a statutory maximum of 280 years in prison. The actual sentence will be determined by a federal judge after considering the applicable sentencing guidelines and other statutory factors.
U.S. Department of Justice case announcement
Profit Connect Promised High Crypto Returns
Kovar owned Profit Connect, a Las Vegas-based company that operated from late 2017 through July 2021.
The company purportedly used artificial intelligence software running on a supercomputer to mine cryptocurrency and verify other cryptocurrency transactions. Kovar allegedly presented Profit Connect as a profitable operation capable of generating fixed annual returns of 15% to 30%.
Investors were also promised a 100% money-back guarantee. Kovar further claimed that Profit Connect was backed by hundreds of millions of dollars in cryptocurrency reserves.
Federal prosecutors said those representations were false. According to the DOJ, Kovar knew Profit Connect was not profitable, did not have the claimed cryptocurrency reserves and had no legitimate way to generate the promised returns or honor the money-back guarantee.
The case had already attracted regulatory attention several years earlier. In July 2021, the U.S. Securities and Exchange Commission (SEC) announced an emergency action against Profit Connect, Kovar and his mother, Joy Kovar, seeking to halt what the regulator described as an ongoing investment fraud.
SEC enforcement action against Profit Connect
SEC Previously Alleged Investor Funds Were Misused
The SEC's 2021 complaint alleged that Profit Connect had raised more than $12 million from at least 277 investors by claiming that an artificial-intelligence supercomputer generated large investment returns.
The regulator alleged that more than 90% of Profit Connect's funds came from investors, rather than from legitimate investment profits. It also alleged that the company did not use investor funds for the cryptocurrency and securities activities it had promised.
Instead, the SEC alleged that investor money was transferred for personal and promotional expenses and used to make Ponzi-like payments to other investors.
The SEC obtained a temporary restraining order and an asset freeze in 2021 as part of its civil enforcement action.
SEC's original Profit Connect enforcement release
Investor Money Was Used to Support the Scheme
The Justice Department's criminal case alleges that Kovar used investor funds to operate Profit Connect, purchase gifts for employees and buy a house for himself.
Money was also used to repay earlier investors while those payments were presented as if they had been generated through cryptocurrency mining and transaction verification.
That structure is characteristic of a Ponzi scheme, where money from newer investors is used to pay earlier participants instead of generating returns through a legitimate underlying business.
According to the DOJ, Kovar ultimately obtained approximately $24 million from at least 400 investors.
The earlier SEC complaint provides additional background on how the investment operation was marketed. The regulator said Profit Connect promoted so-called "supercomputer" investments and targeted people seeking returns for purposes including retirement and education expenses.
Profit Connect Was Put Under a Receiver
The legal case surrounding Profit Connect continued beyond the SEC's initial 2021 enforcement action.
A federal court appointed Geoff Winkler as permanent receiver for Profit Connect in August 2021, giving him authority to investigate claims and pursue legal proceedings involving the company and its assets.
The receiver's work has continued through subsequent litigation involving individuals and entities that allegedly received funds connected to Profit Connect.
For example, a 2026 federal court proceeding involving the receiver describes efforts to recover money that was allegedly transferred to Profit Connect promoters and other parties.
Federal court records on the Profit Connect case
Federal Jury Convicts Kovar
Following a nine-day federal trial, jurors convicted Kovar on 15 criminal counts:
The investigation involved the FBI, IRS Criminal Investigation and the FDIC Office of Inspector General. The criminal case was prosecuted by the U.S. Attorney's Office for the District of Nevada.
The conviction is separate from the SEC's earlier civil enforcement action, although both cases involved the same Profit Connect operation and allegations surrounding investor funds.
Kovar Faces Sentencing in November
Kovar is scheduled to be sentenced on November 30, 2026.
The frequently cited 280-year figure represents the combined statutory maximum penalties associated with the criminal counts. It does not mean Kovar will necessarily receive a 280-year sentence.
The federal district court judge will determine the actual sentence after considering the U.S. Sentencing Guidelines and other applicable statutory factors.
The case demonstrates why unusually high or supposedly guaranteed returns can be an important warning sign for crypto investors. Promises of fixed annual returns combined with claims of sophisticated technology or enormous reserves should be independently verified before investors commit funds.
Why the Case Matters for Crypto Investors
The Profit Connect case is notable because the alleged scheme used cryptocurrency mining, artificial intelligence and a supposed supercomputer to create the appearance of a sophisticated investment operation.
The underlying technology narrative did not, according to prosecutors and regulators, correspond to a profitable business capable of generating the returns promised to investors.
The case therefore highlights an important distinction in the crypto industry: using cryptocurrency terminology or blockchain-related technology does not make an investment legitimate.
Investors should examine how returns are actually generated, whether claimed reserves can be independently verified and whether a company provides transparent financial information.
Final Thoughts
The conviction of Brent Kovar brings the criminal case against the former Profit Connect owner to another major stage after years of regulatory and court proceedings.
According to the DOJ, Kovar fraudulently obtained $24 million from at least 400 investors by making false claims about cryptocurrency mining, guaranteed returns and the company's reserves. The SEC had previously taken civil enforcement action against Profit Connect in 2021 and secured an asset freeze and the appointment of a receiver.
Kovar's sentencing is scheduled for November 30. The case also serves as a reminder that investors should be particularly cautious when a crypto investment promises guaranteed returns, unusually high yields or supposedly risk-free profits.
