Profit Connect owner convicted over $24M AI crypto fraud scheme
A federal jury convicted Profit Connect owner Brent C. Kovar on 15 fraud and money-laundering counts after prosecutors stated he obtained $24 million from no less than 400 buyers by false claims about an AI-powered crypto enterprise.
The Justice Department said the decision adopted a nine-day trial, with jurors discovering Kovar responsible of 11 counts of wire fraud, two counts of mail fraud, and two counts of cash laundering.
The Justice Department positioned the conduct between late 2017 and July 2021, when Kovar marketed Profit Connect as a worthwhile know-how enterprise able to producing the promised returns.
Kovar advised buyers that Profit Connect used AI software on a supercomputer to mine crypto and confirm crypto transactions, based on the Justice Department. He represented the corporate as worthwhile, promised fastened returns of 15% to 30% APR and supplied a 100% money-back assure.
He additionally claimed Profit Connect held lots of of hundreds of thousands of {dollars} in crypto reserves. Prosecutors stated the corporate was unprofitable, held no reserves, and lacked a respectable supply for the promised returns or assure.
The Justice Department stated Kovar as an alternative used investor cash to function Profit Connect, purchase items for workers, buy a home for himself, and repay buyers, with these repayments introduced as proceeds from mining and transaction verification.
From civil allegations to a legal verdict
The SEC’s 2021 civil action alleged that Joy and Brent Kovar had raised greater than $12 million from no less than 277 retail buyers since no less than May 2018 by Profit Connect Wealth Services. The regulator stated they promoted 20% to 30% annual returns tied to a purported AI supercomputer.
CryptoSlate covered those allegations on the time. The numbers got here from the SEC’s civil case in opposition to Profit Connect and each Kovars, whereas the August 2026 jury verdict individually established Brent Kovar’s legal legal responsibility.
The Justice Department’s $24 million determine is about twice the SEC’s earlier determine of greater than $12 million. The minimal investor rely additionally elevated from no less than 277 within the SEC case to no less than 400 within the legal case, though each figures are lower-bound estimates.
The figures come from completely different instances and canopy completely different intervals, so they don’t seem to be immediately comparable. They present that the publicly reported scope of the scheme was bigger by the point of Kovar’s legal conviction, whereas separate court docket or receivership information could be wanted to find out investor losses and recoveries.
The verdict now strikes the case to sentencing on Nov. 30, with prosecutors saying the convictions carry an combination statutory most of 280 years in jail, representing the authorized ceiling throughout the counts. A federal choose will decide Kovar’s sentence after contemplating the US Sentencing Guidelines and different statutory elements.
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